Meet the CTA – GrowthPoint Investment, LLC—Index Condor Program

Meet the CTA – GrowthPoint Investment, LLC—Index Condor Program

In this issue we talk to Nathan Lee Gantt of GrowthPoint Investment, a registered CTA, NFA ID #357618.
To see the performance sheet for the GrowthPoint Investment—Index Condor Program, please log on to our Managed Futures Database for IBTRADE.

Name of Program

GrowthPoint Investment, LLC- NFA ID #357618. 

Name of Principals

Nathan Lee Gantt

Name of Principal with Trading Authority

Nathan Lee Gantt

Q: Can you give a brief description of your program?

This is a premium selling strategy which is a combination of vertical credit spreads and butterfly spread.  It is a three-strike credit spread.

Q: What is the average holding period for each trade?

It Varies based on market conditions, but currently between 7-15 days.

Q: What is the capacity of your program at present? Do you intend to significantly raise this number this year?

We have easily traded as much as $10 million and expect we could trade as much as $100 million without difficulty.

Q: The chart of “VAMI vs. S&P 500” is pretty choppy, is there any intrinsic factor leading to this huge volatility?

Until the “flash crash” in May 2010, we managed our risk based on the distance between the market and our short strike.  We no longer use this technique.  Instead, we now manage our stops and risk based on profit/loss in the position.  We expect this to reduce the volatility and dramatically decrease the likelihood of such a large draw-down.

Q: How to discover or predict those targeted trades which have an expected annualized rate of return of 30% or greater?

We use a combination of trade delta, standard probability calculations, % return on cash, technical analysis and fundamentals to determine strike placement.

Q: We’ve noticed that 2010 was an overall poorly performed year, in which the program presented a large negative figure in the history records. Huge drawdown occurred in May. Can you briefly describe why there was a comparatively large volatility at that time?

This was caused by a single trade that was entered days before the flash crash.  Our new risk management strategy is expected to greatly reduce the possibility of this happening again.

Q: In what types of market environments does your trading program do well and /or struggle?

It does well in low volatility markets (such as 2004-2005) and can do well in high volatility environments (such as 2008) but environments where volatility frequently spikes – going from high to low, then back to high volatility proves more of a challenge.

Q: How to hedge the risk of index increasing or decreasing in value and moving into the money faster than positions can be liquidated?

Our positions are traded as a block and can be liquidated very quickly as most of the trading is done in the S&P options pit.

Q: What’s your opinion on current markets and how do you prepare against the volatility?

The markets are extremely choppy right now and are difficult to trade.  We attempt to offset this by making our trades as short as possible to decrease the market exposure to volatility spikes.

Q: What are your investment goals for this year (i.e. annual returns on performance)? 

In February, 2012, we once again began sell calls as well as puts. So, instead of a max of two trades per month, we can have four when you consider the call and the put side.  In addition, we started trading weekly options.  Due to our short trade duration, this allows us more flexibility getting trades on.  Based on these changes, we hope to earn over 20% this year.

Q: What are the specialties of your program?


Two things set our trading program apart.  First, our configuration of 3-strike spreads provides a hedge against the market moving against the position in the last week of the trade.  This gives us some protection that a typical vertical credit spread would not have.  Secondly, it benefits the brokers because of the high trade volume.  Each spread consists of 8 options (4 long/4 short).  We trade one spread per $16-20K.  We typically have 3-4 trades per month.  This yields an average of about 13,000 RT/Million/Year.   At $20/RT, this yields the broker a gross of 26%/year.


There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. IBTRADE, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.