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CTA Spotlight: Carbide Capital – Absolute Return Program

June 16, 2017

CTA Spotlight:  Carbide Capital Absolute Return Program

Carbide Capital was launched in September 2014 by the former head trader of a multi-billion dollar hedge fund.  The principal, Aaron Wallace, has traded options during his entire career, which began at an investment bank on Wall Street.  After working on Wall Street then a successful hedge fund, Mr. Wallace started his own firm, Carbide Capital.  Carbide was designed to take advantage of inefficiencies in the options market.

The Carbide Absolute Return program is a discretionary long/short options strategy, with a focus on short options on the S&P 500.  The program has a multi-factor investment process, which incorporates fundamental, technical, and volatility analysis into trading decisions.  Carbide feels it has a competitive advantage over other option CTAs, due to the trading experience of the principal, which includes trading for a large hedge fund during the crash of 2008.  The program relies heavily on its macro view when making trading decisions and has consistently posted positive returns since inception, with the largest drawdown thus far of 3.76% (July 2015-August 2015).

Carbide Capital

Carbide Capital

Carbide’s reliance on it portfolio manager’s fundamental view differentiates it from similar programs.  Additionally, the program will not always be 100% short options like many other option CTAs.  Long options can be used to express a market view or offset risk.

Performance Capsule September 2014-June 2017

• May 2017: 1.02%
• Minimum Investment: $200,000
• Compound Rate of Return: 11.96%
• Peak-to-Valley Drawdown: -3.76% (Jul 2015-Aug 2015)
• Assets Under Management: $22MM

Past Performance is Not Necessarily Indicative of Future Results

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