January 20, 2015 (Tuesday)

Since Inception June 2014:

Equity/Futures Account: +16.88% ($11,688,519)
FX Currency Account: +62.25% ($16,225,130)

Benchmark: S&P 500: +3.32%

Equities/Futures

Year

Jun2014

Jul

Aug

Sep

Oct

Nov

Dec

Jan2015

20142015

+2.01%

-1.02%

+2.02%

+6.28%

-2.52%

+4.29%

-1.69%

+6.73%

Feb

Mar

Apr

May

Tot. Ret
+16.88%

FX Currency

Year

Jun2014

Jul

Aug

Sep

Oct

Nov

Dec

Jan2015

20142015

-0.15%

+4.84%

+7.24%

+20.17%

+6.01%

+4.47%

+5.58%

+2.68%

Feb

Mar

Apr

May

Tot. Ret
+62.25%

1/20/15 This Weeks Trade Summary: From Grozny to Frankfurt

Grozny, Chechnya
The chance of a peace accord taking place between Ukraine and Russia went from slim to none this weekend. The fact that the leaders on both
sides need the conflict to continue or even escalate further to stay in power is quickly elevating the danger.
One turn of events that can deescalate the situation is if Grozny becomes a bigger problem for Russia, as it did during the Yeltsin era, than Ukraine is
at the moment. Chechnya is quickly becoming a hotbed for Islamic jihadist activity, and part of the resurgence is due to many of Russias military
and intelligence assets being shifted to the Ukraine front (or within Ukraine itself) and, secondly, the formation of ISIS and some factions of Chechen
Islamists pledging allegiance to al-Baghadi and fighters returning back to Chechnya from Syria/Iraq.
The severe rise in attacks on Russian security forces in the region combined with a heightened fear of a pan-European terrorist network following
the recent tragic events in France may lead cooperation between Western Europe and Russia. Russia may be one major terror attack on its own soil
away from experiencing a strategic shift towards the Caucus rather than the Crimea. It may be a long shot, but monitoring the events in Chechnya
and the Caucasus region, which no longer has the coverage it used to, perhaps will offer insight into how the Ukrainian conflict concludes in the
short-term. Further deterioration in Chechnya would may become a buy signal for Russian stocks as it puts Russia on the same page as the West.
Such cooperation and mutual understanding occurred following 9/11 attack between Bush and Putin (Chechnya at the time was also in a period
of violent Islamic insurgency).

Euro and the Gold Trade

Current positions in the simulation have benefited from extreme currency volatility and a respective focus on money flow driving all short rates
low/negative. Im not a gold bug by any means but I do understand the importance of sentiment that comes with the basic belief that money
moves in search of the next perceived best thing. I was able to sniff out towards the end of last year that new highs in the dollar index didnt
correspond with lower gold prices, which made me realize that given the broader trend of the relative safety trade picking up, it would be only a
matter of time before gold would find favor with investors as the list of alternatives kept getting shorter.
The short Euro trade benefited greatly from SNBs snap decision to remove the peg. The move has created an excitement for more downside
potential for the euro on the speculation that SNBs decision is to get in front of ECBs massive QE. As a result, the Euro has moved significantly
lower ahead of this weeks meeting on the 22nd reaching a 1.15-handle against the U.S. dollar.

Even the most optimistic size of the quantitative easing might be already priced in, so the risk has gone up significantly of staying short ahead of the
ECB meeting on Thursday. A temporary counter-trend rally to 1.20-1.21 where the currency really breaks decade-long support is not out of the
realm of possibility this would probably be a great level to re-short the currency against the dollar.

The Devil Will Be in the Details

Assessment of how the market would fare immediately:
1) Below 500 billion euros and limited risk sharing
o Might as well consider it a one-way ticket to lower prices for most risk assets
2) Large size closer to 1 trillion and limited risk sharing
o Given that the size of the program still surprises, the market will overlook the latter
3) Large size and large risk sharing
o All out risk-on mode especially in peripheral bonds and equities will never happenthe Bundesbank will not tolerate it.
4) Small size but large risk sharing (below 500 billion and below 50% risk share framework)
o Tempered enthusiasm; slightly bullish unlikely as Germany will again object to generous risk sharing
5) Defers the decision to the next meeting
o Preserves the put option, keeping the QE dream alive. Though risk assets would initially come down, as long as the QE
announcement is imminent, its difficult to short risk assets in Europe all in all, European equities have done quite well since
2011.
Questions as to who will share the risk, who will do the purchasing (ECB or NCB), the proportion of the risk sharing, distribution of purchases across
the curve, and rating restriction will determine the amount of faith the market will put in the program. All of this is crucial since the faith in CB is
quickly waning.
The size, the degree of restrictions and the risk sharing will come down to the degree of stringency the Bundesbank wants to impose and how
committed Germany is to saving the Euro.
Furthermore, the way risk sharing is structured would also raise a lot of long-term questions. For instance, having the periphery NCBs buy their own
securities undermines the very construct of the single monetary union as it is not an all for one, one for all type of commitment. I just dont

know enough to answer whether the peripherals existing debt load can handle the increased debt, but I wonder whether that would increase the
possibility of restructuring or default and only make the long-term picture murkier.
When Exactly Is the Tipping Point?
Im not completely sold that the announcement of QE is imminent despite SNBs move to remove the peg. I cant help but wonder if Draghi would
really announce QE ahead of Greek election on the 25th when that could also be used as an acceptable reason to defer the decision until March. I
also believe that there is a vested interested in preserving the put option for as long as it can.
Conversely, my sense is that unless the announcement of QE closely resembles the #3 option above, it will most likely be a sell the news event.
The euphemism may just translate to a one-day pop or perhaps a multi-day rally. But the tragic irony, which the market is full of, leads me to
believe that the moment it has been all waiting for is the day the magic of QE almost immediately dies.
Whichever is the case, it would be foolish to not close related currency positions when it has already moved so much in anticipation. Not only is it
smart to lock in gains and reduce risk ahead of the meeting but I sincerely believe that flexibility will be rewarded more this time around than usual.

Actions Taken Going Into This Week:

1)
2)
3)
4)
5)
6)
7)
8)

Close out remaining EUR/USD position

Close out remaining USD/EUR position
Close out USD/KRW
Maintain long position in GLD and GDXJ
Maintain short position in EEM
Maintain short position in EWY
Maintain small short position in SPY
Maintain small short position on Nikkei 225 Futures

GLD:

VIX:

1/20/15 P&L Breakdown for Equities/Futures Account

Current Equity Positions (as of 1/20/15 - Tuesday)

iShares MSCI Emerging Markets ETF: -85,000 shares = $3,352,400
IShares MSCI Germany ETF: 0 shares = $0.00
IShares MSCI South Korea ETF: -60,000 shares = $3,372,000
Market Vetors Junior Gold Miners ETF: +95,000 = $2,657,600
SPDR Gold ETF: +32,000 = $3,974,080
SPDR S&P 500: -10,000 = $2,020,300
Account Cash Value: $11,688,519, Total Exposure: $15,376,380, Leverage: 1.31x

Current FX Positions (as of 1/20/15 -Tuesday)

Euro/US Dollar: $0.00
US Dollar/Japanese Yen Spot: $0.00
US Dollar/Korean Won = $0.00
Account Cash Value: $16,225,130, Total Exposure: $0.00, Leverage: 0

1/20/15 Platform Snapshot

Changing Winds
(Written on Nov. 17th, 2014)
One subject of history that Ive really enjoyed since I was a kid was alternative history. What if scenarios intrigued me, such as wondering about
an alternate world in which the Battle of Stamford in 1066 never took place before the Battle of Hastings a month later. William of Normandy losing
to King Harold wouldve radically changed the trajectory of both English and European power. I believe global-macro is largely similar in the sense
that imagining a narrative and envisioning a world different from what we know to be true today requires the same mindset that derives joy from
such an exercise.
Chart 1 (US Dollar Index stretching back to 1985)

Chart 1 The charting software, wouldnt allow me to go back more than to 1985, but in actuality the trend shown has been intact since the 1970s,
when the U.S. formally moved away from the gold standard. If South Korea, China, Brazil and Mexico were to be included in the weighting of the
index, the breakout would have already occurred (not to mention, the euro and the yen make up 70% of the index weighting).

Chart 2 (Euro-Dollar dating back to 1999 when the currency was introduced)

Chart 2 The Euro-Dollar breaking all support levels in the last 10 years is becoming a highly probability event which also happens to be the level
at which the Euro was introduced to the markets in January of 1999.

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Chart 3 (Dollar-Yen since 1985)

Chart 3 Dollar -Yen has already broken out of the multi-decade slope.
Breakdowns or breakouts of this magnitude can trigger liquidation events, as anyone who has bought or sold within that vast time period could all
become underwater on their positions. Take the Euro-Dollar for example. Around 1.20, you are taking out every level of everyone who has bought
in the last ten years. As Japan trashes its own currency to support growth or blatantly monetizes its own debt, that will likely force others in the
region to devalue its currency in order to compete with the yen (South Korea - USD/KRW looks very interesting).

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An unwind of the decades-long carry trade in which people have borrowed dollars and bought assets abroad specifically Asia can have massive
ramifications when growth is already fragile in the region. Regardless, the U.S. dollar breakout is a high-probability event and it makes little sense
to be long Asian EM equities, including Japan. Its better to either short or avoid the second derivative trade of the current monetary policies of the
region (equities) and keep the trade simple by focusing on the currency aspect (as this simulation has done).
Finally, all roads lead back to the shiny stuff. I believe its very possible that gold will decouple from its traditional relationship with the U.S. dollar,
ironically due to the uncertainty and disruptions that are created as the dollar continues its ascent. The currency war among regional Asian nations
should also cause the demand for gold to rise in the region as the forced currency devaluation continues.
I laid out the case in the Nov. 3rd note that golds move has always been centered on financial stability. Golds move from $700 to $1900 (from
2008 to 2011) in my opinion was driven by the fear of financial instability and the perceived inability of central banks to calm the storm. Whether
its extreme inflation or deflation, start of a bubble or end of a bubble, the very existence of either extreme is a knock on the system and an erosion
of confidence in central banks. It wasnt until 2012, after several years of stock markets steady rise, that those fears were placated, which also
marked the top in gold. And I believe we are again setting up for an environment where gold should perform.
Positions (listed in reverse chronological order):
1) Short Emerging Markets (iShares MSCI Emerging Markets ETF initiated on 11/14)
Reasons detailed in Changing Winds
2) Long US Dollar/Korean Won (initiated on 11/14)
Reasons detailed in Changing Winds
3) Short MSCI South Korea (initiated 9/4/14)
Written on Sept 4th There are three major headwinds for the country: 1) weaker yen 2) over-reliance on chaebol and the subsequent lack of
diversification, and 3) demographic time-bomb.
Korea is a trading powerhouse. It derives 55% of its GDP from exports and is the seventh largest exporter in the world. The majority of goods that
fall into that export figure are electronic & electric equipment and automobile and transportation equipment. That puts South Korea in direct
competition with Japanese multi-nationals that play in a similar field (the likes of Sony, Toyota, and Honda) who are again getting a renewed boost

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from the yens weakness, likely to come at the expense of Korean rivals.
This exposes a structural issue within the South Korean economy. The chaebol system (chaebol refers to a family-controlled conglomerate) has
made South Korea the 12th largest economy in the world but its also its biggest threat. In order to bring about quick modernization and economic
growth, since the 1960s, the South Korean government has groomed companies within certain sectors of the economy via protectionist policies and
state subsidies. This path has helped bring rapid growth to South Korea and allowed companies like Samsung, Hyundai, and LG to become giants on
the world stage.
The economy that was ultimately created was one dominated by very few players. Thus, the countrys reliance on too few companies to be its
drivers of growth gambles its economic fate in their hands. Subsequently, the over dominance by the chaebols stifles competition, creativity,
innovation and entrepreneurship (which is excruciatingly low for a country of its size) and although the effect of, lets say, lower creativity is difficult
to quantify, without a doubt the longer-term implications are negative.
To grasp how sorely the Korean economy is in need of diversity, one just needs to look at the components that make up the weighting of the KOSPI
Index. By industry, Electronic & Electric Equipment accounts for 29%, and KOSPI Transport Equipment accounts for 16%. In total thats 45%. The top
20 companies with the largest market cap amount to 49% of the KOSPI Index (Samsung alone accounts for 18%). If you break it down further by
chaebol ownership, for example, Samsungs Lee family controls 3 out of the 20. More comprehensively, 4chaebol families (Samsung, Hyundai, LG,
and SK) control 12 of the 20 largest companies, or roughly 40%.
Samsung Electronics recently reported disappointing shipment numbers for its flagship Galaxy smartphone. Q2 earnings were disappointing due to
declining smartphone sales (revenue declined from 57.46 trillion won to 52.35 trillion won) and the outlook for the second year is likely to be worse.
With the expected launch of the iPhone 6 in September Apple going after the category of larger screens' turf that Samsung has dominated since
the launch of its Galaxy flagship line and other trinkets such as Apple iWallet theres a chance that Samsung will lose a tremendous amount of
market share.
That should serve as a reminder of how vulnerable South Korea is in terms of how concentrated its economy is around a few companies.
Technology is an extremely competitive space where an advantage or leadership can quickly turn on its head within a single cycle. Margin
compression is the name of the game since all devices quickly become commoditized through competition and saturation. It's scary that Samsung
Electronics alone makes up 17.5% of the KOSPI or 21% of the assets in the ETF: EWY (Samsung as a holding company roughly accounts for one
quarter of South Koreas GDP).
As for the auto industry, South Korean companies such as Hyundai and Kia (Hyundai Motors and Hyundai Mobis account for 7% of the weighting in
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the index) have been able to gain market share in the last decade from their Japanese rivals through aggressive pricing that was partly aided by the
strengthening yen. But now the situations have reversed and Japanese carmakers should be able to compete better on price (every 1% weakening
in the yen boosts Japanese automakers operating profits by 2-6% - which is significant given that Toyota exports roughly 2 million vehicles that it
produces domestically).
As a society, the intense focus Koreans put on education produces far more negative outcomes for quality of life and demographics. It props up the
inexcusably high suicide rate (the highest in the world 38.3 per 100,000) and fuels the corruption in its educational system. The intense
competition and structural education issues focused on entrance exams for its prestigious SKY universities have created an arms race where parents
are forced to spend additional disposable income on hours of private lessons outside of normal school hours. Its normal for Korean students
starting from 12 years of age to have an additional 6 hours of tutoring after school.
All of this fuels additional downward pressure on the birth rate on top of the usual pressures that take place in developed/developing countries.
The cost of raising a child in such a competitive environment is astronomical. Thus, South Koreas birthrate is actually lower than Japan and equally
South Koreas working age population is falling by 1.2% annually (the fastest decline among OECD) and it will see the biggest jump in its elderly
population compared to any other developed nations (61% of the population versus 10% today). In essence, South Korea sees Japan when it looks
into the mirror in fact, one could make the case that the demographic issues of Korea are worse.
The breakdown of the weighting in the Korean indices and within what the instrument I have access to ETF:EWY (I hope to explore other ways of
expressing this bet), makes it a compelling longer-term short. But what makes the trade more attractive is that the country as a whole seems to be
oblivious to its problems and the image it sees in the mirror is eerily similar to Japan.

4) Long Gold (SPDR Select ETF:GLD and Junior Gold Miner ETF:GDXJ position initiated on 9/30) Written on Sept 29th It may not feel like it in the last few years, but the world has become a more dangerous and fragmented place. As I wrote in
my analysis on the future of the European integration & geopolitics (8/28), since the financial crisis in 2008, there has been a reversal in the grand
march toward globalization/integration since the fall of the iron curtain two decades ago. Nationalism is starting to rear its ugly head again in global
hotspots, states are preoccupied with domestic issues and increasingly going back into their shell when it comes to broader international issues, and
finally, the unilateral framework of the world order established by the U.S. post-Soviet Union exhibits serious signs of falling apart under the current
structure without further restructuring or strengthened commitment by the western world (for which there is no appetite).
On the monetary side, the world is about to double the size of its sovereign debt load from 2007 supported by little more than half the growth
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when the debt load was half the size. And the final word has yet to be written on the unprecedented monetary policies in U.S., Europe, and Japan
and whether the world's largest economies are in fact playing musical chairs. If the threat of deflation is real, central authority will continue to rely
on the printing press to reflate.
Thus, perhaps the biggest risk to the market is when the music actually stops, when the realization sets in that the panacea isn't in financial
engineering and when the childlike innocence and trust in central banks' ability to fix problems shatters. Hope becomes the biggest enemy of the
market as it creates wild swings and extreme positioning. It's likely that each time hope is crushed the central planners will outdo the previous
method. Rinse, repeat.
Down the line, the insane debt levels all around the globe will do everyone in. Such a prognostication is excruciatingly gloomy. But I also accept that
within it, there will be market swings of excess in both directions and plenty of opportunity to make money in either direction.

5) Long USD/JPY (initiated 8/20/14)

Written on August 20th It was only a matter of time before the yen moved lower on the backdrop of dollar strength as well as the divergence in
central banks' policies -- they've been in different stages of easing for quite some time now. The prospect of additional easing seems more likely to
combat the continued lukewarm data points in Japan. Kuroda may be publicly positive and appear to be excited about Japans growth prospects,
but inspiring confidence is part of his job as he is trying to amplify the effect of his policy being downbeat would have the opposite impact.
USD/JPY cross has been on the radar for a while as it's been in a tight trading range since February of this year. The position was initiated as it broke
out of consolidation and given how long it has consolidated, it will retest and likely close higher above the previous high of 105.43.
It is likely that this move might be the next leg lower for the yen part of the larger macro move that has occurred since late 2011.
6) Short German DAX (short ETF:EWG initiated 8/18/14)
Revised on Nov. 14th I still remain short EWG in part because I see limited upside for the Eurozone (explanation offered on 8/27 update) but also I
still worry about Russias next move. Russia has largely been removed from investors worry-list, investors have largely ignored the deep rooted
suspicion the Russian bear has towards the west since the Crimean War in 1853 which officially marked the radical shift in European geopolitics as
the continent went from French containment doctrine to the one focused on containing Russia.

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Without firing a single shot, the West has inflicted an economic pain on the country and it has without a doubt has hurt the countrys ego.
That exactly is the source of my worry. Putins ego is essentially a wild card. And I also worry that the West would take it too far to drive a point:
which is to remind Russia that theres no benefit in territorial expansion through force. But the risk of that message getting lost as the rouble
continues to tumble and as the country starts burning through its $400 billion reserve. Which seems like a lot, but given that half of the annual
budget (which is based on a $100/bbl) is dependent on oil revenues is certain to anger the Russian bear.
And that is bad news since history has long shown that over-punishing a nation can lead to unintended violent outcome.
7) Short EUR/USD (initiated 6/17/14)
Written on June 17th and edited on August 27th The short euro trade has been the most highly concentrated (and the longest held) position since I
began this trading simulation.
I believe short EUR/USD trade has been one of the few macro trades where all elements of the trade (historical analysis, policy analysis, economic
data, trends/technicals and etc) all line up favorably to be short.
From 8/27:
Good trades are often those that have multiple catalysts to push prices in the desired direction. But great trades are those that right or wrong, will
move in that direction anyway.
The short euro trade has been the most highly concentrated position since I began this trading simulation. The divergence in central banks policies
(Fed vs. ECB) and the growing divergence in economic data points have been the main reasons for holding a negative view on the euro against the
U.S. dollar since May of this year. And that as the economic realities become worse, the chances of QE in the Euro zone will increase. On the
flipside, contrasting Fed policy will strengthen the U.S. currency, further fueling the weakness in the Euro.
Government policy is not providing the solution so the burden will only continue to disproportionately fall on monetary policy to somehow uncover
the panacea for Europes woes. In my opinion, the future does not look bright. I see all of this as part of the larger macro trend that is moving
Europe away from the intended goal of integration.
The sovereign debt crisis in 2011 clearly drew the line between the haves and the have-nots. What is also ironic about the situation is that the event
left both sides bitter. The haves were upset because of the imposed financial obligation to help those who have less (or those who lied and abused
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the system) and the side on the receiving end felt they were being overly punished and bullied by those who have more. Those feelings still
continue to burn and run counter to a longer-term integration process.
Those grievances eventually manifested themselves in domestic politics. All across Europe, parties that have lost significant ground to their socialist
or center-left political adversaries for decades came back to the forefront of their respective domestic political stages in the first half of this year.
In France, the National Front won the nationwide election for the first time with nearly 25% of the vote, winning 118 council seats on a local level.
In the UK, the UK Independence party won 23 seats making it a first time in a century that neither the Conservative nor the Labour Party won the
election. In Finland, the newcomer Finns Party established itself as a legitimate third-party option after winning 13% of the vote. And the Five Star
Movement Party in Italy scored 21% of the vote just behind the ruling Democratic Party. Even Germany saw newcomers Alternative Party and a
neo-nazi party burst onto the political scene.
The narrative was much the same for Netherland, Hungary, and Greece those who favored leaving the currency union did extraordinarily well.
This laundry list speaks to the political earthquake Europe experienced in its first major election after the sovereign crisis and to the growing
persuasion of the Euroskeptic platform.
Despite what the establishment and spin-doctors in Brussels may say, one could characterize the population as having one foot over the fence. One
final push over and they may never come back. The more radical tools imposed from Brussels to stave off disintegration may also be the stick that
knocks voters to the other side.
It took a great amount of effort in the decades following World War II to convince Europeans of the merits of European unity and the eventual path
toward integration. But in one single swoop, all of that has changed. The younger generation, which has fleeting ties and experiences to the Great
Wars and vague memories of the Iron Curtain of the Cold War, only knows the failures of the integration experiment.
The worry is that it may be too late to win back the hearts of voters. A further push for integration in order to save the union will produce even
more backlash and build on the momentum Europskeptic parties have already displayed in the recent election. But doing nothing will also produce
a similar outcome as recession, stagnation, high youth unemployment (and high unemployment in general) will see anger directed at Brussels. Its a
lose-lose situation.
There is also one other wild card that may push the euro even lower and that is the situation in Ukraine. Further escalation will punish the strongest
European economy, which does the most amount of business with Russia than anyone else on the continent. And the consequent safety trade will
be away from the Euro but into U.S. assets which is why EUR/USD pair makes the most sense to short.
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What makes the Ukraine situation dangerous is what made the First World War dangerous nationalism and the answer is once again found in
history. Ironically, the possession of Ukraine in WWII was fought between Germany and Russia. When Germany was finally defeated, Stalin subdued
all nationalism but that was especially the case in Ukraine. From ethnic cleansing (Tartar population in Crimea/Ukraine) to sending all dissenters to
the eastern corners of Sibera (never to be seen again).
In other words, the collapse of the Soviet Union made it inevitable that Ukrainian nationalism would reassert itself like a coiled spring. Ukrainian
statehood and nationalism has never been more embraced than it is now since its independence. Poroshenko is playing a very dangerous game by
branding the conflict as a fight for survival and matching Russias nationalistic war cry with one of Ukraine's own. Initially, I have largely written off
the impact of the conflict as a distraction. However, Poroshenkos rash pursuit of achieving complete military victory in Donetsk and Luhansk, has
made me somewhat fearful as head-on collision of nationalism often produces unfortunate outcomes.
In order to understand Russias actions, one need to look at what Ukraine historically meant to her. Kiev was in fact a capital for the early formation
of Russian identity. The word Russia derives from the name of the early kingdom, Kingdom of Rus and its capital of Kiev. Wests condemnation of
Russias action in Ukraine only reinforces Russias long history of suspicion and the narrative of Russia against the world. One must look at the
events through the eyes of a Russian bear that has fought the European coalition time after time again throughout history as the foreign policy of
continental Europe shifted from containing France to containing Russia from 1800s onward. The most relevant war of them all was the Crimean
War in 1853 that Russia lost to a coalition of European superpowers. Thus, the expulsion of Yanukovych was the earliest reminder of this conflict,
the long-standing view that Russia is being contained and robbed of its possessions.
A lot of analysis that discounts Russias ability to be more of a menace based on potential economic hardship that Russia may or may not face is
essentially discounting the resilience and the loyalty of the Russian people.
Historically, the Russian Bear has been known for its ability to persevere. But beyond that, one should also realize that under Putin most Russians
have enjoyed a significant boost in their standard of living. The chaos during the liberalization era under Yeltsin and the shame/shock Russians felt
when their empire suddenly fell were reversed (at least it felt that way) when Putin rose to power. And for that the Russian people will be far more
loyal than what voters in the West would be willing to tolerate under similar circumstances.
Going back to the main point, the aggressive nature in which Poroshenko is aiming for quick and total victory in Luhansk and Donetsk has made the
situation a dangerous coin-toss with serious ramifications. The more the conflict turns into a head-on match between two nationalistic forces, the
greater chance that it will escalate into a deadly struggle where only one remains standing. In that case, its another reason to avoid the euro and
another reason to own the U.S. dollar. But since that is the trade I already have on, it has geopolitical insurance (if there is such thing) built into it.
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Trading Account Rules:

1) Starting Account Size:
a. Cash equities/futures/option: $10million
b. Forex: $10million
2) For the cash account (non-forex), macro views will be reflected using listed equity indexed ETFs with deep liquidity/volume and net assets of
$1 billion or greater in order to best represent the odds of the strategy being scalable (single-stock, company specific stocks will not be
traded).
3) Most of the speculative positions can also be accurately expressed using futures, but because the volume is more constrained at different
times and because the platform fails to take volume into consideration (hence the trades' impact on the actual price), the use of futures will
be limited. Positions that I deem to be core/longer-term would be better expressed via equities. But for commodities such as crude oil,
silver, copper, etc., they will solely be expressed through the futures contract market due to contango/decay issues that most commodities
ETFs suffer.
4) The overall goal is to identify attractive opportunities with goals of holding the positions for multi-week/month periods. Importance will
always be put on liquidity and risk exposure. Also, being able to realistically liquidate all positions by end of trading day or vice versa, scale
up risk, will be an advantage of the strategy.

5) Daily updates will be simple and short, as youll receive a time-stamped screenshot of the account summary where detailed positions and
P/L will be all within a single image.

6) Leverage for spot currency position will be limited to 2.5x the underlying cash

Leverage for equity/futures account will be limited to 1.3x the underlying cash with net aggregate overnight risk exposure (net liquid
value) often falling well below that limit.

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