FX Quant > Frequently Asked Questions
Why Quant Trading Currency Trading Programs? There are 9 key areas that you could consider when choosing our programs.
- Non-correlation with other investment vehicles
- Significant degree of stability and robustness
- Market liquidity. Since the system trades in small increments, a $100,000,000 account can be traded without a significant performance degradation.
- Relative insensibility to changing market conditions
- Excellent risk adjusted return (Sharpe, Sortino & Calmar Ratio) of our strategies
- Developed risk management strategy
- Position level transparency
- Daily liquidity. Funds may be added/withdrawn at any time without early withdrawal fees
- 0% Management fee and 20% performance fee based on high water mark.
Can I trade my own account? No, we do not provide a trading signals service, as we found that signal transmission delay deteriorates strategy performance.
Is it possible to eliminate the EUR/USD currency risk from the strategies traded? Yes, although our managed account program trades USD denominated accounts. To hedge the currency risk, you should open another (auxiliary, hedging) account and hold a long EURUSD position, which size should match your nominal managed account size. Adjustments can be made monthly or quarterly.
How can I enroll in the
Managed Account Program?
First, you should be a Qualified Eligible Person (QEP) as defined by CFTC regulations (basically institutional investors, high net worth individuals or non-US persons). Please contact us to request more information.
How much do I need to open a managed Forex account?
In order to participate in the Managed Account Program, the minimum account is $100,000 (with Oanda Inc.) or $1,000,000 (with Interactive Brokers, Newedge UK or other brokerages)
How to fund my account?
You can contact your local bank and wire funds (or send personal check) in U.S. Dollars to Interactive Brokers, LLC or Oanda, Inc. (not Quant Trading, Ltd.).
Is my money safe?
You will need to open an account with Interactive Brokers or Oanda Inc., one of the largest Futures Commission Merchants (FCM) in the world and members of the National Futures Association (NFA). Your funds will be directly deposited and held in your name at the FCM. We are only given limited powers (Limited Power of Attorney - LPOA) to trade your Forex account, but cannot withdraw any amount from your account. This means that your money is completely safe against fraud. In no event Quant Trading, Ltd. acts as a counter-party for any Forex transaction, accepts investors' funds directly or have control over it. Interactive Brokers, LLC or Oanda Inc. (the FCM), will be a counterparty for all your Forex transactions.
Are the funds FDIC insured?
Funds held at any FCM firm are not FDIC insured. However, clients' funds are held in
a separate account, segregated from FCM's (Interactive Brokers' or Oanda's) operating funds. If the FCM
goes bankrupt clients' funds should remain intact. To ensure safety of clients' funds, NFA performs on-site audits at FCMs at least twice a year.
How can I check my account balance?
Once you open an account, you will receive an ID and password. You will be provided with access to your account, which will enable you to track positions and account equity in real-time. In addition, you can create daily account statements online 24-hours a day (with Interactive Brokers) and do not need to rely on monthly statements e-mailed by the money manager.
Can I increase / decrease my nominal account size?
You can increase / decrease your nominal account size, usually after depositing / withdrawing funds into/from your Forex trading account. You should send us an Allocation Order (see the Disclosure Document) at least two business days preceding the first business day of the next calendar month.
Is there a management fee for this service?
There is no management fee for this service (zero deal), no transaction fees (other than FCM commissions, if any), platform fees and no data feed costs. The only fee we charge is performance (incentive) fee equal to 20% of all new trading profits generated in client's account (realized & unrealized P/L), based on monthly, or quarterly High Water Mark (with no hurdle rate), or upon exit from the Program. The performance fee is calculated from the profit above the initial deposited amount. Our compensation comes solely as a percent of the generated client profit. See this performance fee calculation example in Excel.
Can I withdraw funds before one year?
You can withdraw funds at any time, as there is no minimum term. However, we encourage clients to leave their funds in the account for at least 12 months. There will be occasional, and possibly sharp drawdowns, so extraordinary patience and genuine risk capital are needed to stay in the program during these tough periods. To minimize the risk of catastrophic loss, we recommend following our standard leverage/risk parameters.
How can I withdraw my funds?
You can contact the FCM (Interactive Brokers or Oanda) to arrange for withdrawal.
We recommend investing no more than 1/3 of your investment portfolio with any trading program (Quant Trading Ltd's trading programs inclusive) to take advantage of the diversification benefits without overly exposing your portfolio to the volatility of any particular program. With a minimum investment of $100,000, calculations show that an investment with Quant Trading's currency trading programs may be appropriate for investors with a total investment portfolio of $300,000 or more. ALSO, DON'T FORGET TO REVIEW AND UNDERSTAND THE RISK / DRAWDOWN ANALYSIS ON THE FX QUANT 11 PAGE BEFORE YOU INVEST.