THE RISK OF TRADING COMMODITY FUTURES, OPTIONS AND FOREIGN EXCHANGE ("FOREX") IS SUBSTANTIAL EVEN WITH A MANAGED FOREX ACCOUNT. THE HIGH DEGREE OF LEVERAGE ASSOCIATED WITH COMMODITY FUTURES, OPTIONS AND FOREX CAN WORK AGAINST YOU AS WELL AS FOR YOU. THIS HIGH DEGREE OF LEVERAGE CAN RESULT IN SUBSTANTIAL LOSSES AS WELL AS GAINS. YOU SHOULD CAREFULLY CONSIDER WHETHER COMMODITY FUTURES, OPTIONS AND FOREX IS 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 TO PROSPECTIVE CLIENTS A RISK DISCLOSURE DOCUMENT OUTLINING THESE FEES, CONFLICTS OF INTEREST AND OTHER ASSOCIATED RISKS. THE FULL RISK OF COMMODITY FUTURES, OPTIONS AND FOREX TRADING CAN NOT BE ADDRESSED IN THIS RISK DISCLOSURE STATEMENT. NO CONSIDERATION TO INVEST SHOULD BE MADE WITHOUT THOROUGHLY READING THE DISCLOSURE DOCUMENT OF EACH OF THE CTAS IN WHICH YOU MAY HAVE AN INTEREST. REQUESTING A DISCLOSURE DOCUMENT PLACES YOU UNDER NO OBLIGATION AND EACH DOCUMENT IS PROVIDED AT NO COST. THE CFTC HAS NOT PASSED UPON THE MERITS OF PARTICIPATING IN ANY OF THE FOLLOWING 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.


CERTAIN INVESTMENT RISKS

INVESTING IN SPECULATIVE TRADING INVOLVES A SUBSTANTIAL RISK OF LOSS AND ACCORDINGLY SHOULD BE FUNDED SOLELY WITH RISK CAPITAL. BEFORE OPENING AN ACCOUNT, EACH POTENTIAL CLIENT SHOULD CAREFULLY CONSIDER THE FOLLOWING RISKS IN ADDITION TO THOSE DESCRIBED ELSEWHERE HEREIN.


HYPOTHETICAL RISK DISCLOSURE

HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

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.
 

INTERBANK FOREIGN EXCHANGE NOTICE

OUR FX MANAGED FUND IS TRADED 100% IN THE INTERBANK FOREIGN EXCHANGE MARKET. A CLIENT SHOULD BE AWARE THE TRADING OF FORWARD CONTRACTS ON FOREIGN CURRENCIES MAY INVOLVE GREATER RISKS THAN THOSE ACCOMPANYING THE TRADING OF FUTURES CONTRACTS ON EXCHANGES. GENERALLY, NEITHER THE COMMODITY FUTURES TRADING COMMISSION (“CFTC”) NOR ANY BANKING AUTHORITIES HAVE REGULATED THE TRADING OF FOREIGN CURRENCY CONTRACTS. FORWARD CURRENCY CONTRACTS ARE ONE TYPE OF INSTRUMENT INCLUDED IN THE GENERAL CATEGORY OF OVER THE COUNTER DERIVATIVE INSTRUMENTS. ALTHOUGH THE FOREIGN CURRENCY MARKETS MAY NOT NECESSARILY BE MORE VOLATILE THAN OTHER COMMODITY MARKETS, SUCH FORWARD TRADING MAY INVOLVE LESS PROTECTION AGAINST DEFAULTS THAN TRADING ON EXCHANGES.

BECAUSE SUCH CONTRACTS ARE NOT GUARANTEED BY AN EXCHANGE OR CLEARING HOUSE, THE CLIENT IS SUBJECT TO THE RISK OF DEALER FAILURE OR INABILITY OR REFUSAL TO PERFORM WITH RESPECT TO SUCH CONTRACTS. THE FAILURE OF A DEALER WITH WHICH THE CLIENT HAS CONTRACTED WOULD LIKELY RESULT IN A DEFAULT, THEREBY DEPRIVING THE CLIENT OF UNREALIZED PROFITS OR FORCING THE CLIENT TO COVER ITS COMMITMENTS FOR RESALE, IF ANY, AT THE THEN-MARKET PRICE. IN ADDITION, THE IMPOSITION OF EXCHANGE AND CREDIT CONTROLS OR THE FIXING OF CURRENCY EXCHANGE RATES BY GOVERNMENTAL AUTHORITIES MIGHT LIMIT FORWARD TRADING TO LESS THAN THAT WHICH THE TRADING ADVISOR WOULD OTHERWISE RECOMMEND.

DUE TO THE FACTORS LISTED ABOVE, AND THE ABSENCE OF CFTC REGULATION, THE TRADING OF FORWARD CONTRACTS MAY THUS INVOLVE GREATER RISKS THAN THOSE ACCOMPANYING TRADING OF FUTURES CONTRACTS ON EXCHANGES. NO SPECIFIC LIMITATION ON THE PERCENTAGE OR AMOUNT OF FORWARD CONTRACTS, IF ANY, THAT MAY BE ENTERED INTO BY THE CLIENT HAS BEEN IMPOSED. THE CFTC AND OTHER REGULATORY AUTHORITIES HAVE BEEN STUDYING THE GENERAL QUESTION OF REGULATION OF “OFF-EXCHANGE OVER THE COUNTER DERIVATIVE INSTRUMENTS” SUCH AS FORWARD CONTRACTS. THE CFTC AND/OR OTHER REGULATORY AUTHORITIES MAY, IN THE FUTURE, SEEK TO ASSERT JURISDICTION OVER FORWARD CONTRACTS ON CURRENCIES SUCH AS THOSE TRADED BY THE CLIENT AND ATTEMPT TO PROHIBIT CERTAIN UNITED STATES ENTITIES, INCLUDING NATURAL U.S. PERSONS AND LEVERAGED INVESTMENT VEHICLES FROM ENGAGING IN TRANSACTIONS IN SUCH CONTRACTS.

FOR THOSE INVESTORS USING NOTIONAL FUNDS

IF YOU REQUEST A TRADING ADVISOR TO TRADE YOUR ACCOUNT WITH A DEGREE OF LEVERAGE THAT EXCEEDS THAT RECOMMENDED AS APPROPRIATE BY THE ADVISOR, YOU SHOULD BE AWARE OF THE FOLLOWING:

1. YOU WILL INCUR GREATER RISK BECAUSE YOU MAY EXPERIENCE GREATER LOSSES, AS MEASURED BY A PERCENTAGE OF ASSETS ACTUALLY DEPOSITED IN YOUR ACCOUNT, THAN IN AN ACCOUNT FUNDED AT THE LEVEL RECOMMENDED BY THE ADVISOR.

2. YOUR FUND WILL EXPERIENCE GREATER VOLATILITY, AS MEASURED BY RATES OF RETURN ACHIEVED IN RELATION TO ASSETS ACTUALLY DEPOSITED IN YOUR FUND, THAN TRADES FUNDED AT THE LEVEL RECOMMENDED BY THE ADVISOR.

3. YOU WILL PAY HIGHER ADVISORY FEES AND BROKERAGE COMMISSIONS, AS MEASURED BY THE PERCENTAGE OF SUCH FEES AND COMMISSIONS IN RELATION TO ASSETS ACTUALLY DEPOSITED IN YOUR FUND, THAN A CLIENT'S TRADES FUNDED AT THE LEVEL RECOMMENDED BY THE ADVISOR.