To compete in the financial markets, our group of skillful quant traders focus on building, testing, and automating strategies using machine learning and other proprietary technologies. This is accomplished by leveraging quantitative research and unbiased data analysis to take calculated risks with our investor’s capital.
To deliver our investment and trading capability, we bring together exceptional talent, a meticulous scientific approach, vast inventories of data, robust automated systems, and committed intellectual and financial capital. As markets become more efficient and expand while uncertainties inflate, we challenge ourselves to innovate our valuation and investment strategies.
The Sub-Four Futures & Commodities program primarily trades futures and options thereon in equities, precious metals, and energies using an active automated approach.
Discretionary old-school trading tactics and techniques have been written into algorithms that run autonomously looking for opportunities to exploit trading edges whenever markets are open day or night. Risk of loss on each trade is pre-calculated and profit objectives are dynamic.
These systems follow macro trends and swing trade the market anywhere from a few hours to a few days in total duration. The market may go up or down, so the program follows the intermediary term price cycles. Sub-Four does not speculate in the long term at this time due to the great uncertainty of the financial system.
Proprietary indicators that are purely technical drive the strategies. News and fundamentals are respected, but are not the basis for entering positions. Generally speaking when the market is quiet leverage is slightly increased with tighter parameters. When the market is volatile size is reduced and the playing field is widened to allow for more movement in either direction.
Block orders are executed to allow fairness in price fills for each account that Sub-Four manages. Each entry has several units initiated to allow for the use of scaling exits as a profitable trade is found. This multiple unit strategy allows for the rounding and smoothing out of drawdowns in overall performance by always taking profits on portions of positions when the opportunity is available.
The Sub-Four Futures & Commodities Trading Program primarily trades in three sectors.
Sector #1 – Energies. The energy complex consists of three futures contracts. Crude Oil is a world commodity and has two derivatives. The first is RBOB gasoline and is used in engines worldwide. The second is heating oil and is used for heavier shipping and freight purposes, as well as to provide warmth for people during the cold season.
These futures are traded standalone with an outright method in one approach, and are also traded as a spread where opportunities exist. The program’s energy spread calculator will determine if potential skews exist in the prices of the different instruments relative to each other. This type of trade is commonly referred to as a “crack” spread.
Sector #2 – Equities. The equity index sector uses a technical system designed to make a few trades a day and capture the momentum in-between the high and low. This trend following system allows the market to decide where to place its moves in the Nasdaq and E-mini S&P 500 futures markets. Most trades are closed at the end of each day to allow the systems to reset themselves for the next session.
Sector #3 – Metals. The metals sector is focused on trading the long side of the gold and silver market. The same techniques that are used in the equity index approach are applied with slightly different methods to generate a short term trading strategy within the context of the current environment. The current economic crisis has resulted in Central Banks around the world engaging in a massive stimulus effort to stabilize the situation, and this is causing inflation across the board. In our opinion, this is having a direct effect on the pricing of precious metals higher.
Although Sub-Four’s primary focus may be on such sectors, Sub-Four may trade in other futures contracts listed on exchanges all over the world, including, but not limited to, grains, meats, bonds and lumber.