Clarity Capital Management clarity.altavra.com

Clarity Capital Management’s trading program is designed for sophisticated investors. An investment in an account to be traded by Clarity Capital Management should only be considered by investors that can assume the significant risk of commodity futures trading, including losses in excess of their initial investment. In managing the accounts of its clients, Clarity Capital Management employs the trading concepts and strategies developed by its Manager and Member. Since the trading methods to be utilized by Clarity Capital Management are proprietary and confidential, the discussion that follows is of a general nature and not intended to be exhaustive. No attempt has been or could be made to provide a precise description of the trading strategy or strategies to be used by Clarity Capital Management. While Clarity Capital Management believes that the description of the trading methods and strategies included in the Disclosure Document may be of interest to investors, investors must ultimately be aware of the inherent limitations of any such description.

Investment Objectives
The objective of Clarity Capital Management’s asset management services is to achieve capital growth of assets within defined risk limitations. To meet these objectives, Clarity Capital Management will employ trading strategies that seek to capture option premium while being diversified as to time frame and price level. There is no representation being made that the Clarity Capital Management’s trading program will be successful in achieving their objectives.

Types of Transactions
Clarity Capital Management’s objective is to achieve appreciation of assets through speculative trading in commodity futures & options contracts. Clarity Capital Management anticipates trading in a variety of futures and options markets including but not limited to equity indices, crude oil, and other commodities.

Most positions initiated by Clarity Capital Management consist of selling Iron Condors or some variation thereon. An Iron Condor consists of a put and a call (sold if selling the position) which are complemented by another put and call placed further from the underlying price (bought if selling the overall position). Additional strategies may be used from time to time consisting of such option strategies as vertical or calendar spreads, but always keeping with a policy of establishing positions with pre-defined risk. The exact selection of positions will be made using a proprietary algorithm.

Clarity Capital Management estimates that up to 100% of funds in the client’s accounts will be used to margin positions. For purposes of defining margin requirements, Clarity Capital Management will consider margin to be the maximum combined exposure of all puts in the customer's account as defined by difference between the bought and sold strikes. However, these percentages may vary at the discretion of Clarity Capital Management.

Clarity Capital Management may enter short or long positions of any Investment, depending on its assessment of the strength or weakness of the underlying market and on the objective of the trade (e.g., outright long/short trade, hedging strategy). Due to the diversity of markets, trading strategies, time frame, and long/short entry, it is believed that client accounts will be equally well-positioned to generate trading profits (or to incur losses) irrespective of macroeconomic conditions and regardless of whether conventional long-only investment vehicles are performing well or poorly.

Technical and Fundamental Analysis
Commodity Trading Advisors generally rely on either fundamental or technical analysis, or a combination thereof, in making trading decisions and attempting to identify price trends in a commodity interest. "Fundamental analysis" is the consideration of factors external to the market of a particular instrument. For example, weather and political events which affect the supply and demand of that particular instrument, in order to predict future prices of that instrument. As an example, some of the fundamental factors that affect the supply of commodities (e.g., agricultural products such as corn and soybeans) include the acreage planted, weather during the growing season, harvesting and distribution of the commodity and the previous year's crop carryover. The demand for such commodities is determined in part by domestic consumption and exports and is a product of many factors, including general world economic conditions, exports and the cost of competing products which might be substituted as alternate sources of food or fiber.

Technical analysis is not based on the anticipated supply and demand of the "cash" or "physical" (i.e., actual) commodity; instead, technical analysis is based on the theory that a study of the markets themselves (in particular, of trends of prices established by the markets for various instruments during selected historical periods) provides a means of anticipating prices. Technical analysis of the markets often includes a study of the actual daily, weekly and monthly price fluctuations, as well as volume variations and changes in open interest, utilizing charts and/or computers for analysis of these items and other technical market data.

Both general methodologies have been employed with success by traders and investors in the past; however, neither trading method can be assured of success in a particular interval of time. Clarity Capital Management’s methodology is centered around technical analysis.

Trading Methodology
Clarity Capital Management will base its trading decisions on model trades calculated each day through its methodology. The trading strategy consists of selling “covered” options. A “covered” option is an option with a predefined maximum risk. The principal strategy consists of Iron Condors and derivations thereon. Specifically, the strategy consists of selling one option position while simultaneously buying another option position with a net credit inflow of premium. The strategy is executed both on the call side of the market through the sale of call credit spreads and on the put side of the market through the sale of put credit spreads. The investor profits when the market price of underlying futures contracts stays below sold call strike prices and above sold put strike prices. The investor incurs a loss when unexpected price movements breach or approach the strike prices of sold options. The minimum capital investment in the Trading Program is $20,000. Clarity Capital Management, in its sole discretion, may waive the minimum capital investment requirement.

In pursuit of the investment objective, the Clarity Trading Program will typically purchase and sell options on a variety of commodity and stock index futures markets including, but not limited to the S&P 500, the Dow Jones Industrial Average, the Nasdaq 100 and the Russell 2000 stock indices. Clarity Capital Management may initiate trading in additional markets as future opportunities emerge. Because of the relatively small size of the minimum program investment, The Advisor may allocate customer capital to small option contracts typically referred to as “mini” contracts. Clarity Capital Management, in its sole discretion may allocate customer capital to larger contract sizes for larger customer account balances or after the capital appreciation of smaller initial customer account balances.

Strategy Diversification
Strategy risk is the risk associated with investing based on a limited resources for making buy and sell decisions. Returns of different trading strategies, even if they are trading the same market, often exhibit low correlation, which favors risk reduction. All strategies will exhibit draw downs and some may fail due to changes in markets, the number of traders following the method, or for other reasons. Clarity Capital Management will manage strategy risk by spreading trades over time, strike price and market.. Clarity Capital Management is not subject to any self imposed diversification rules and no representation is made that participation in the Clarity Capital Management program will not be subject the client to a concentration of risk.

Risk Management
Clarity Capital Management believes that the success of a trading program is primarily contingent upon the implementation of a solid, well-defined risk management program. Clarity Capital Management incorporates a proprietary risk management program, which it believes will reduce variances in returns, magnitudes of draw-downs and the risk of capital loss.

Please note that while Clarity Capital Management adheres to certain risk management techniques, there can be no guarantee that these techniques will be successful. Accordingly, no representation is being made that the trading in client accounts will be profitable, or will not result in losses.

THERE CAN BE NO ASSURANCE THAT CLARITY CAPITAL MANAGEMENT AND ITS CLIENT ACCOUNTS WILL ACHIEVE THE FOREGOING OBJECTIVES, OR THAT THE CLIENT ACCOUNTS WILL NOT INCUR LOSSES. PRIOR TO MAY 2009, NEITHER THIS TRADING ADVISOR NOR ITS TRADING PRINCIPAL HAS PREVIOUSLY DIRECTED ANY ACCOUNTS.

Charles Starnes is a graduate of Rice University in Houston Texas. During the period April 2005 through September 2009, Mr. Starnes was an Associated Person of StrikePoint Trading, LLC (an Introducing Broker). He has been an Associated Person of StrikePoint Asset Management, LLC (a Commodity Trading Advisor) since May 2009. Charles Starnes was an Associated Person and Principal of S&A Advisors (a Commodity Trading Advisor) from September 2006 through February 2008. He became an Associated Person of Clarity Capital Management in May of 2009. He became the Manager and a Principal of Clarity Capital Management on August 18, 2010 when the former Manager (Dana McLeod) left the company to pursue other interests.
 

Erik Gebhard is a 1991 graduate of the University of Southern California where he earned his Bachelor of Science degree in Business Administration. Erik Gebhard became a principal of Clarity Capital Management in December 2007 and an associated person of the company in January 2008 and serves in these capacities today. Erik Gebhard has extensive experience in the futures industry. Currently, and beginning in April 1997 and for the entire five years preceding the date of the disclosure document, Erik Gebhard was a principal and an associate person of Altavest Worldwide Trading, Inc. (an Introducing Broker & Commodity Pool Operator). Eric Gebhard was a principal of Major Strategy Group LLC (a Commodity Trading Advisor) during the period December 2006 through December 2007, and was an Associated Person of the firm during the period June 2007 through December 2007. Major Strategy Group LLC discontinued operations in December 2007. Eric Gephard has been a listed Principal and Associated Person of StrikePoint Asset Management LLC since May 2007. He was a Principal of S&A Advisors LLC (a Commodity Trading Advisor) during the period September 2006 through February 2008 and was an associate person of the firm during the period October 2007 through the firm’s cessation in February 2008. Erik Gebhard has been and is currently a Principal of StrikePoint Trading LLC (an Introducing Broker) since April 2004 and an associated person of StrikePoint Trading LLC since June of 2004. Additionally, Erik Gebhard was a principal of Veroso Capital Management LLC (a Commodity Trading Advisor) during the period April 2007 until the company’s cessation in January 2009. He was an associated person of the firm during the period June 2007 through January 2009.

Michael Armbruster is a 1992 graduate of the University of Kansas where he earned his Masters of Accounting degree. Michael Armbruster has extensive experience in the futures industry. Michael Armbruster has been a principal of Clarity Capital Management LLC since December 2007. Michael Armbruster has been a Principal and Associate Person of StrikePoint Asset Management LLC (a Commodity Trading Advisor) since May of 2007 and an Associated Person of StrikePoint Asset Management LLC since June of 2007. Currently, and for the entire five years preceding the date of the document, Michael Armbruster was a Principal and an Associate Person of Altavest Worldwide Trading, Inc. (an Introducing Broker & Commodity Pool Operator). He became a principal and associate person of Altavest Inc in April 1997. Michael Armbruster was a principal and associate person of Major Strategy Group LLC (a Commodity Trading Advisor) during the period December 2006 through December 2007.  Major Strategy Group LLC discontinued operations in December 2007.  He was a Principal of S&A Advisors LLC (a Commodity Trading Advisor) during the period September 2006 through February 2008 and was an associate person of the firm during the period October 2007 through the firm’s cessation in February 2008. Michael Armbruster has been and is currently a Principal of the Introducing Broker StrikePoint Trading LLC since April 2004 and an Associated Person of StrikePoint Trading LLC since June of 2004. Additionally, Michael Armbruster was a principal of Veroso Capital Management LLC during the period January 2007 until the company’s cessation in January 2009. He was an associated person of Veroso during the period January 2007 through January 2009.

Courtney Nicoll is a 2001 graduate of San Diego State University where she earned her Bachelors of Business Administration degree. Courtney Nicoll became a Principal of and the Office Manager for Clarity Capital Management LLC in December of 2007. Currently, Courtney Nicoll is and became a Principal and Associate Person of StrikePoint Trading LLC in April 2006. During the period February 2003 through 2006, Courtney Nicoll was the Office Manager and an unregistered employee of Altavest Worldwide Trading, Inc. During the period June 2007 through December 2007, Courtney Nicoll was an Associated Person of Major Strategies Group, LLC (a Commodity Trading Advisor). Major Strategies Group discontinued operations in December 2007. During the period June 2007 through January 2009, Courtney Nicoll was an Associated Person of Veroso Capital Management LLC (a Commodity Trading Advisor). Veroso discontinued operations in January 2009. During the period October 2007 through February 2008, Courtney Nicoll was an Associated Person of S&A Advisors LLC (a Commodity Trading Advisor). S&A Advisors discontinued operations in February 2008. Courtney Nicoll has been an Associated Person of StrikePont Asset Management LLC (a Commodity Trading Advisor) since June 2007 and a Principal of this firm since November 2007.

Andrew Evans has been a Principal Owner of Clarity Capital Management since December 2007, but does not participate in the firm’s operations or trading. Andrew Evans was a Principal of Canberra Asset Management LLC (a Commodity Pool Operator) during the period September 2004 through April 2009. He was a Principal of Major Strategy Group LLC (a Commodity Trading Advisor) during the period December 2006 through December 2007. He has been a listed Principal of Optioneer LLC (an Introducing Broker) since February 2005. He has been a Principal of StrikePoint Asset Management (a Commodity Trading Advisor) since May 2007. He has been a Principal of StrikePoint Trading LLC since September 2004. He was a Principal of Veroso Capital Management LLC during the period April 2007 through January 2009.

Ivor Worrell has been a Principal of Clarity Capital Management since August 2009, but does not participate in the firm’s operations or trading. Ivor Worrell is an accountant and business consultant. He has been a listed Principal of Optioneer LLC and StrikePoint Trading LLC (Introducing Brokers) since August 2009. He has been a listed Principal of StrikePoint Asset Management LLC since August 2009. Mr. Worrell has been a listed Principal of Orange County Asset Management (a Commodity Pool Operator and Commodity Trading Advisor) since August 2009.

The descriptions above are from the manager's disclosure document.

THE RISK OF LOSS IN TRADING FUTURES, OPTIONS AND OFF-EXCHANGE FOREX CAN BE SUBSTANTIAL.  PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.  PLEASE READ THE CTA'S RISK DISCLOSURE DOCUMENT CAREFULLY BEFORE INVESTING MONEY.