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Managing Volatility in the S&P 500

The S&P 500 just had its best week of 2024, is up +0.66% on the month, and is only 2.5% from its all-time high. As quickly as volatility spiked it has retreated and the global stock market and S&P 500 sell-off has turned into the global stock market and S&P 500 rally.

The chart below provides a visual of the -8% decline (in 3 days) and +8% rally (in 10 days) in the S&P 500. The sell off, rally and return of volatility presents opportunity to manage risk, add value and make the S&P 500 a better long-term investment.

 

As a reminder, 3D Bull/Bear is our different CTA strategy that only invests in the S&P 500 Index, because the only solution to solving the problem of S&P 500 declines is the S&P 500 itself.

3D Bull/Bear is a volatility driven L/S S&P 500 system that manages risk one day at a time and seeks profits from sharp reversals and rallies and declines in the S&P 500. The first two weeks of August 2024 emphasizes the importance of managing S&P 500 risk with S&P 500 risk and managing risk one day at a time. Below is performance for the S&P 500 TR Index, 3D Bull/Bear and its CTA benchmark the BTOP 50 Index.

An important reminder is that directional volatility like has been seen thus far in August can provide a favorable environment for 3D Bull/Bear, while low volatility, large gaps, “head fakes” and intraday swings are unfavorable. More information, data and insight is available in the 3D Presentation which is available upon request.

S&P 500 August 1, 2024 – August 16, 2024

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Gross Daily ROR Estimates August 1, 2024 - August 16, 2024

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Gross Daily ROR Estimates August 1, 2024 - August 16, 2024

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Data for the BTOP50 Index has not yet been updated for August 16, 2024.

3D Bull/Bear is 25% funded (4X) and can be customized to help you meet your investment objectives.

3D Capital has been managing S&P 500 risk one day at a time since the 2008 Financial Crisis.

We welcome the opportunity to begin a dialogue and answer your questions about how we can help you solve the problem of S&P 500 declines and make the S&P 500 a better long-term investment.

 

Contact JPFS for more information on 3D Capital.

Sincerely, Eric Dugan
Chief Investment Officer at 3D Capital Management

Risk Disclaimer

3D Bull/Bear returns are calculated based on an assumed funding level of 25% and 50% of Trading Level and are intended to show the impact that 75% and 50% notional funding respectively has on returns (when those returns are expressed as a percentage of account valuerather than Trading Level). The returns are net of the Advisor’s 1.25% management fee and 15% incentive fee. Fees are charged on the Trading Level of the account. Returns do not include interest income. 3D Capital Management is a unit-based CTA. Per NFA requirements, the addition method is used to calculate annual rates of return because the trading level of the accounts managed did not fluctuate with prior month’s profits or losses. The CFTC has not passed on the merits of participating in any of 3D’s programs nor on the adequacy or accuracy of the disclosure documents. Other disclosure statements are required to be provided to you before an account may be opened for you.

Hypothetical Performance Risk Disclosure: One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. The risk of trading commodity futures, options, and foreign exchange (“forex”) is substantial. The high degree of leverage associated with commodity futures, options, and forex can work against you as well as for you. The high degree of leverage can result in substantial losses as well as gains. You should carefully consider whether commodity futures, options, and forex are suitable for you in light of your financial condition. If you are unsure, you should seek professional advice. Past performance does not guarantee future success. In some cases, managed accounts are charged substantial commissions and advisory fees. Those accounts subject to these charges may need to make substantial trading profits just to avoid depletion of their assets. Each Commodity Trading Advisor (“CTA”) is required by the Commodity Futures Trading Commission (“CFTC”) to issue the prospective clients a risk disclosure outlining these fees, conflict of interest, and other associated risks. A hard copy of these risk disclosure documents is immediately available upon request. The full risk of commodity futures, options, and forex trading cannot be addressed in thisrisk disclosure statement. No consideration to invest should be made without thoroughly reading the risk disclosure document. The CFTC has not passed on the merits of participating in any of the preceding programs nor on the adequacy or accuracy of the disclosure documents. Other disclosure statements are required to be provided to you before an account may be opened for you. Past performance is not necessarily indicative of future results. Trading futures and options involves substantial risk of loss and is not suitable for all investors. There are no guarantees of profit no matter who is managing your money. You should carefully consider whether commodity futures are suitable for youin light of your financial condition. An investor must read and understand the manager’s current disclosure statement before investing.

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