Strategy

ADDED VALUE TRADING AND RISK CONTROL

Red Oak trades financial, currency, and physical commodity futures on global commodity exchanges. We may also trade forward contracts through banks.

Red Oak is biased toward taking positions in futures contracts with imputed positive returns, assuming there are no changes in the cash markets. Thus we prefer to be long contracts in backwardation (back months are priced lower than front months) and to be short contracts in contango (back months are priced higher than front months). This disciplined approach to cost of carry can play a significant role in performance.

Red Oak's longer-term approach yields lower position turnover, and this discipline reduces transaction costs. Trading costs in managed futures accounts can be significant. Higher turnover CTAs face trading costs that we estimate average 3 -4% yearly. That’s a 3 -4% hurdle just to break even. Our yearly commissions have averaged only 0.3% over the last five-year period. Red Oak’s disciplined longer-term low turnover approach reduces our transaction costs and benefits our clients.

Red Oak employs proprietary risk control procedures in an effort to preserve capital and protect against material forecasting errors. We calculate a predetermined level of acceptable loss per position based on volatility and risk-reward dynamics. If this predetermined acceptable loss is exceeded, the position is closed.


600 Sylvan Avenue, Suite #307
Englewood Cliffs, NJ 07632
(201) 227-1100
Inquiries@RedOakCommodityAdvisors.com

Copyright © year Red Oak Commodity Advisors, Inc.

Past performance is not necessarily indicative of future results. The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.

 

Risk Disclosure Statement

Qualified Eligible Person Status. Futures trading involves a high degree of risk. Clients should only use risk capital to invest. Clients are only accepted if they satisfy the requirements in order to be deemed a “Qualified Eligible Person” as defined in Commodity Futures Trading Commission (“CFTC”) Regulation 4.7. By checking the box below, I certify that I am indeed a “Qualified Eligible Person” as defined in CFTC Regulation 4.7.