Who We Are
Tyche Capital Advisors, LLC is a New York based registered commodity trading advisor currently offering trading programs to qualified investors. Through its trading programs, TCA will engage in speculative trading of futures contracts offered on the United States commodity exchanges and overseas futures exchanges. Tariq Zahir and Steve Marino are the owners and principals. Tyche Capital Advisors is currently a member of the NFA and registered with the CFTC. Mr. Zahir’s background includes managing $900+ M of institutional capital for a large NY based broker/dealer and hedge fund. Steve Marino has a deep mathematical and consulting background working side by side of Zahir while assisting in structuring trades.
What We Do
The TCA Institutional Spreads Program will be employing trading only in calendar spreads in the WTI and Brent oil markets. Positions will be initialized throughout the structure of the forward curve with the goal of generating alpha while maintaining low volatility. Margin to equity ratios are targeted to not exceed 5%. The model is primarily a discretionary model (75%). Analysis is consistently performed on several factors, including geo political headlines, supply outages, worldwide inventory levels, along with supply and demand balances. TCA also uses custom proprietary statistical and analytical software that provides position entry and exit signals based upon custom technical algorithms, indicators, and formulas derived from price action, volume, and market statistics.
Our Edge
We are focused exclusively on one specific sector, even further honing in on calendar spreads in the WTI crude oil markets. Our trading signals go into spreads between 4 months to 2 years out along the forward curve. Trades we employ will realize profits or losses in the widening or contraction of calendar spreads. Having analyzed and traded these markets, we have concluded these spread markets provide the liquidity we demand. We believe our “edge” is the discretionary aspect we employ with our program. Our fundamental research is extensive. Below is some color on our research.
Recent Market Analysis
U.S Shale
This has been one of the main factors that is making an impact in the energy markets. We have seen the US develop and implement a production level in crude oil that we have not seen in decades. While the crash of crude in the beginning of the year has impacted the rig count significantly over the last few quarters, production levels have not come down as most analysts originally forecasted.
OPEC
Formally known as the “world’s oil cartel, OPEC seems to be losing some of its power. Saudi Arabia, the leading producer of OPEC has taken a stance over the past several months protecting its market share and actually increasing their record high production levels themselves.
Iran
We have finally reached a deal and the framework was accepted by the UN. While there is a chance the deal could be rejected by congress we do not anticipate there will be enough votes to override a veto from the president.
Cushing
Maintenance season is on the horizon where we will see refineries come offline to prepare for the winter grade of gasoline and heating oil for winter. As this occurs refiners will be reducing the utilization rates and we feel crude oil will substantially build in Cushing
U.S Dollar
As seen in this outlook, Crude oil prices have numerous factors and fundamentals behind price fluctuation. As of late the correlation or lack thereof with the U.S dollar had been as imperative as anything. A stronger U.S dollar makes dollar-priced commodities (WTI) weaker. We do feel the market is preparing for an interest rate hike which in turn would give some strength to the US dollar. We expect the US dollar to remain strong producing a headwind for the crude oil markets.
SUMMARY
After going through our fundamental analysis and then analyzing the curve we have determined which spreads we feel will widen or contract and have position ourselves accordingly. Having the ability to use our research in a real time basis and take positions along with our systematic overlay gives us our edge in taking advantage of the moves we see in the spread markets.