Diamond Enhanced Solutions (DES)
Executive Summary
The DIAMOND ENHANCED SOLUTIONS (DES) Program offers a combination of the Enhanced S&P Program (ESP), as described below, in conjunction with short-term trading systems in three typically non-correlated systems to provide diversification of markets traded and applied time-frames for a comprehensive approach and reduced volatility.
The Enhanced S&P portion of the program trades the U.S. domestic large-cap stock sector via S&P 500 futures and its options. It's a systematic, proprietary rules-based investing program seeking sustainable, long-term growth for investors by combining proven, low-correlation systems: trend-following, trend reversal and premium capture.
The Trend Following System uses a method of trading which seeks to establish and maintain market positions based on major price movements. The system determines whether the S&P market is in a bull or bear trend, then trades with the trend until a stop condition is reached. While the core of the trend following system is long-term in nature, proprietary short-term counter-trend system signals may be used to exit a position, create a neutral position, or trade against the trend on a short-term basis.
The Premium Capture System consists of writing deep out of the money covered and/or uncovered options to capture premiums, providing a more balanced and predictable source of returns. (Option positions may also increase the risk of market exposure.) Every period, options that meet proprietary risk parameters are written with the goal being to capture the premium by letting them expire, or occasionally by purchasing them back at a profit. Strict risk controls are used to limit the downside risks and achieve a desirable risk/reward ratio.
The Short-Term Trading systems within the Diamond Enhanced Solutions Program (DES) actively trade the crude, gold, and S&P futures markets and selectively trades these markets over a short-term time horizon. The gold and S&P futures will utilize the micro, or in some cases depending on account size, the mini sized contracts. In the case of crude oil, positions are only held intra-day with no overnight exposure. Signals are generated off a macro directional indicator, then filtered for executed trades. The gold trading is more short-term trend following in nature, while the actively traded crude futures trading tends to trade both as short-term trend following and counter trend to the macro directional indicator.
The short-term S&P futures related to the short-term trading system typically utilizes micro S&P sized contracts for limited exposure and is designed to trade overbought and oversold opportunities in the S&P index. Positions are initiated after an indication of a "bottoming" process in the case of an oversold market, and "topping" process for an overbought market. Positions tend to last on average 2 weeks until market prices become more neutral, or is stopped out in the case of continued selling in an oversold market, or continued buying in an overbought market.
The short-term trading in these systems has historically been negatively correlated to Diamond's ESP strategy based on hypothetical back-tested trading beginning in October 2009, when the ESP began trading client accounts.
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Disclaimer Info
The performance data displayed herein is compiled from various sources, including BarclayHedge, and reports directly from the advisors. These performance figures should not be relied on independent of the individual advisor's disclosure document, which has important information regarding the method of calculation used, whether or not the performance includes proprietary results, and other important footnotes on the advisor's track record.
The programs listed here are a sub-set of the full list of programs able to be accessed by subscribing to the database and reflect programs we currently work with and/or are more familiar with.
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Managed futures accounts can subject to substantial charges for management and advisory fees. The numbers within this website include all such fees, but it may be necessary for those accounts that are subject to these charges to make substantial trading profits in the future to avoid depletion or exhaustion of their assets.
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