News and Comments

October 23, 2008

You may have noticed that CCM programs are taking fewer trades than usual in recent weeks. This is an automatic response by our various trading models to the highly volatile markets conditions experienced recently.

 Market volatility across the financial spectrum has increased substantially due to a variety of economic factors, not the least of which include the upcoming presidential election, the current financial credit crunch, falling commodity prices, substantial foreign currency moves and so on.

 Nearly all of the models used by CCM’s trading programs employ volatility filters, or “collars”, that dictate whether or not an entry signal will be considered for execution. The range of these filters varies between programs.

  For some of CCM’s smaller programs, such as the Global Basic program, these filters are much more stringent than are the ones employed in the models used in some of our larger programs such as the Millennium or Jupiter programs.

  Months ago, we began noticing a reduction in the number of entry signals taken by the smaller programs. Since then, market volatility has risen to the point of affecting even the long-term models used in our larger programs.

  These volatility filters have been developed and tested using up to 60 years of historical data. CCM has NOT made any trading model changes recently – the current reduction of new trade entries are a normal aspect of our models and are NOT the result of any decisions at CCM to override our trading models’ signals.  

The net result of this market volatility has been a substantial reduction in trades taken by the CCM models. Whether this is good or bad remains a debate for another day. However, in periods of high volatility, our models naturally focus on capital protection and we strongly believe that this is the appropriate overall course of action to take in the current environment. If you have any questions or comments, please call or email us.

March 8, 2006

January 25, 2006

November 15, 2005

      Clarke Capital has determined that current capacity now allows for a limited number of NEW CLIENTS in the Global Basic and Global Magnum programs. This should be considered a one-time offer and is subject to immediate withdrawal at the judgment of CCM with respect to capacity issues. IB's are urged to submit their requests for new account allocations to CCM at the earliest opportunity. Available capacity will be allocated on a first-come, first-served basis. However, due to the limited capacity, CCM reserves the right to cap individual requested account increases. (All new increases are also required to meet the 1.8 and 25% fee schedule.)

September 27, 2005

Clarke Capital has determined that current capacity now allows for EXISTING CLIENTS in the Global Basic and Global Magnum programs to increase their unit size utilizing new deposits to fund the increases. (Previous increases were limited to clients with equity already built up in their accounts) This should be considered a one-time offer and is subject to immediate withdrawal at the judgment of CCM with respect to the aforementioned capacity issues. IB's are urged to contact ONLY current clients, and to submit their requests for increases to CCM at the earliest opportunity. Available capacity will be allocated on a first-come, first-served basis. However, due to the limited capacity, CCM reserves the right to cap individual requested account increases. (All new increases are also required to meet the 1.8 and 25% fee schedule.)

November 10, 2004

During the past two years, Clarke Capital Management, Inc. (CCM) has experienced a significant growth in assets under management in its futures programs. As our assets have grown so has the size of our orders. Also over the past several months we have seen many large and volatile moves in a number of the futures markets that we follow. We have noticed an increase in the frequency and magnitude of "temporarily discontinuous" markets. These are markets where, due to news or other events, normal amounts of bids and/or offers disappear for a given period of time. Large price gaps to distant new price areas take place with little or no trading at intervening prices.

   Our orders, because of their size and their placement with multiple brokers on the floor or on an electronic trading platform, carry with them the possibility of “moving the markets.” This is exacerbated in these times of discontinuous markets. That is to say, they have the ability to influence the price discovery process, thereby distorting a commodity’s value in any given market. This distortion effect can be either short-term or long-term, depending upon other factors. Our ability for us to continue to deliver the performance our clients expect of us is impacted somewhat by price movement driven by our order size, their style of placement, and the more frequent and larger temporarily discontinuous markets that we are seeing.

  We at CCM have given this situation and how we should respond to it a great deal of thought.

  The emergence and growth of electronic markets, while presenting new challenges, has also created new opportunities for us to take advantage of a faster, cleaner, more liquid marketplace than the trading pits of old.

  We have come to the conclusion that by employing multiple brokerage firms to execute our orders, we are losing the battle for market transparency, an important ingredient for the successful and timely execution of our orders.

  By simply having our orders visible in the market, awaiting execution, we put ourselves at a distinct disadvantage to those who make their living “knowing what every other market participant wants to do.”  

   Also, consistent disparities in order fill prices between these execution desks can have the effect of creating an “uneven” playing field for all CCM clients as a group.

   For these reasons, among others, CCM has decided that it would be in the best interests of our clients to consolidate our order execution under one roof. We gave serious consideration to building our own in-house execution staff. But after reviewing the situation we realized that we already had a strong relationship with one of the premier execution teams in the futures business at one of the larger brokerage firms that we are using. We have reached an agreement to work closely with staff personnel dedicated to handling CCM's order flow. We view this a superior option to building our own in-house trading staff.  Essentially, we are sub-contracting out to a group that is already in place; a talented group that has worked together for many years and with which we have a smooth and professional interaction.  

  We understand that some clients will be charged a give-up fee for order executions filled by an FCM other than their own. We are confidant that the attention our orders will receive (by way of better fill prices and less price-slippage) will more than offset any give-up fee charged to the client’s account.