What looked like it was going to be a great month for managed futures after the first couple days of October quickly turned the other way as a big rally in stocks, energies, foreign currencies, and more caused a sharp reversal from the months long decline in those assets since July.

When the paint dried on the October numbers, managed futures were looking at a loss of -3.72% according to the Newedge CTA Index. Multi-market trend following strategies had a very difficult month with nearly every trend follower we track finishing the month in the red.  The European Debt Crisis is to blame as the markets have been very choppy due to the various rumors (good and bad) coming out of Europe in regards to bailouts and the state of the European Union.

Option traders had their month in the sun, with option programs claiming six of the top ten spots for October performance across all the programs we track. The top performers include Bluenose Capital Management LLC – BNC BI, Cervino Diversified 2X and White River Group Diversified Option Writing. It is nice to see option traders stepping up to the plate and providing much-needed diversification during this time of stress for trend followers.

Specialty traders including Agriculture traders had mixed performance with most finishing slightly up or down for the month. Rosetta Capital Management was the top performer in this category. Specialty programs that struggled in October included Tanyard Creek Capital.