TRADE HARD. REST ASSURED.

To protect your assets as well as ours, Advantage Futures employs a talented and experienced Risk Management Team.  We maintain rigorous financial safeguards and provide three levels of protection for your funds: our uncompromising data integrity, our capital base and pledged assets for clearing purposes, and our real-time risk monitoring.

UNCOMPROMISING DATA INTEGRITY

Our Business Continuity/Disaster Recovery Center located 26 miles west of downtown Chicago is central to our robust data protection. We replicate and store ALL trade and corporate data on a real-time basis, and have redundant direct exchange connections from the site. An 850 amp backup generator assures continuous electrical power for uninterrupted data transmission.

SIGNIFICANT FINANCIAL SAFEGUARDS

Client funds deposited with Advantage Futures are held in strict segregation from Advantage’s operating funds, in accordance with the regulatory requirements of the U.S. Commodity Futures Trading Commission (CFTC). Advantage Futures maintains excess capital significantly above CFTC capital requirements, providing a substantial cushion relative to the risk margin of our clients’ positions. In addition, Advantage Futures has considerable pledged assets in exchange-required collateral that contribute to our financial strength.

REAL-TIME RISK MANAGEMENT

Our stringent credit control processes provide even more financial security. All new clients undergo credit reviews. Subsequent trading activity and real-time positions are continuously stress-tested. We analyze the effects of extreme market moves to ensure that potential losses are covered by the assets of the clients on deposit with our firm.

This same diligent oversight is always applied to our internal investment process. All investment choices for our segregated funds, and the level of concentration allowed, are determined and approved by our Credit Committee – including our CEO, our Chief Risk, Compliance and Administrative Officers

What is Advantage Futures philosophy towards managing risk?

We have two primary tenets at Advantage: that much of risk management occurs prior to an account being opened; and, responsibility for risk management is a firm-wide endeavor. By striving to know and understand our clients prior to opening, we avoid many problems and ensure that the client will stand behind any problems that may arise. Once the account is open and trading, we monitor activity on a real-time basis, stress test positions to ensure coverage of extreme moves, watch for changes in trading style, etc. We work with our clients with respect to their trading, not just with a concrete set of rules and procedures.

We also established a culture at Advantage where everyone bears responsibility for risk management, and feels empowered to mention anything they see that seems unusual, whether it involves money movements, trade clearing, compliance questions, etc.

What is involved in a risk assessment for clients?

We have systems that can sort information in many ways. This lets us scan market by market, rotating between them to focus on those really moving, as well as looking at the book as a whole. We watch market action, changes in client trading behavior, account values, position changes, as well as potential moves in the marketplace, all as real-time as possible. All clients have order/position limits in place and we monitor the origins of trades (pit, screen, give-ins, etc). In addition to these intraday reviews, we conduct scenario stress testing, attempting to evaluate the effects of extreme moves and assess the impact of market/position liquidity. If we need a client to reduce or eliminate a position, we try to contact the client and discuss this with them in order to have them take the necessary steps.