FAQ.

Studio

WHAT IS THE BASIC TRADING APPROACH AND HOW DOES A DECISION COME ABOUT?

Intalcon investment strategies are 100% systematic using algorithms for both buy and sell decisions as well as position sizing. All strategies detect recurring patterns in price fluctuations of stocks and futures contracts and exploit mean reversion and trend moves by applying robust algorithms.

WHAT IS THE COMPETITIVE ADVANTAGE OF THE INVESTMENT STRATEGIES?

Intalcon investment strategies profit from early trend recognition, which leads to profits from long and short-term trends. Further, in all strategies, a volatility-based stop-loss is used to control risk and limit per-trade losses in contrast to the open-ended buy-and-hold strategy. This ensures a constant risk per position and allows the strategy to handle high and low volatility markets. Of course, the risk is fairly distributed over many liquid futures markets or equities, reflecting the corresponding benchmark allocation.

WHAT IS THE AVERAGE NUMBER OF ROUND-TURNS TRADED PER YEAR IN EACH STRATEGY?

Intalcon strategies typically feature around 15 round-turns per stock/future contract per year. The average holding period is around 16 calendar days.

WHICH MARKET REGIMES DOES THE STRATEGY BENEFIT FROM/STRUGGLE WITH?

The strategy combines both, mean reversion and trend elements, so it can profit in all market regimes. Markets moving side-ways offer the strategies above-average opportunities in beating the corresponding benchmark performance.

WHO HAS DEVELOPED THE STRATEGIES?

We offer strategies that we have created in-house and strategies developed by trusted third partners. All strategies are subjected to a rigorous testing process and get approval from an independent auditor or law firm.

ARE THE STRATEGIES REGULARLY UPDATED OR REOPTIMIZED?

Although the strategies have not been modified so far, we conduct continuous research in system development in order to be prepared for any loss of efficiency in the strategies currently used.

HOW ARE ESG CRITERIA CONSIDERED IN THE INVESTMENT STRATEGIES?

Intalcon ensures ESG compliance for all equity strategies by adhering to the methodology of the benchmark provider.

CAN A PORTFOLIO BE CUSTOMISED ACCORDING TO SPECIFIC CUSTOMER REQUIREMENTS?

An individual portfolio adaption is possible, provided that there are no liquidity constraints and a benchmark exists or any other comparative scale by which we can calculate the alpha.

DOES INTALCON TRADE ITS INVESTMENT STRATEGIES WITH ITS OWN MONEY?

A double-digit million amount is recommended to trade one of Intalcon`s investment strategies. Instead of trading ourselves, we invest in available investment vehicles of our clients, provided these assets are 100% managed by our algorithms.

WHAT IS THE RECOMMENDED CAPITAL FOR TRADING A STRATEGY?

The strategies have been designed for the exclusive use of institutional clients who want to outperform leading equity and bond market benchmarks. The suggested minimum capital amounts for each portfolio (as seen on the Intalcon website) have been picked to reflect (i) minimal benchmark tracking error and (ii) the intention to grant only a small number of institutional users the ability to either market their own white-label product or benefit from the strategies’ power to enhance the performance of their own in-house trading.

WHAT IS THE MAXIMUM AMOUNT OF CAPITAL EACH STRATEGY CAN HANDLE AND HOW IS IT CALCULATED?

We estimate that each strategy can easily handle a total that is between 1 and 2% of the underlying’s average daily volumes. Given the available strategy-variations, the amounts traded in each of the suggested minimum accounts have been designed so as not-to-exceed 0.02% of those average daily volumes.

HOW IS IT ENSURED THAT THERE WILL BE NO MARKET IMPACT WHEN A STRATEGY IS TRADED BY MULTIPlE CLIENTS/LARGER VOLUMES?

We take great care to ensure that the performance of our strategies is not compromised at any time by the amount of capital under advice. In practice, each strategy`s maximum capital capacity (defined by the underlying market`s liquidity) is divided into smaller blocks. Each block is traded with a slightly modified version of the main algorithm, thus eliminating market impact issues.

WHICH DATA PROVIDERS ARE USED?

All our backtests rely on high-quality data from Refinitiv, CSI, Siblis and other high-quality vendors.

HOW ARE TRADING COSTS REFLECTED IN BACKTESTS?

All backtests take into account trading costs of 0.02% per half-turn.

IS INTEREST INCOME CONSIDERED FOR THE CASH NOT INVESTED?

For our strategies which trade futures contracts, interest income on capital not used to cover margin requirements is taken into account. The equity strategies do not take into account interest income for occasional uninvested cash.

WHAT ARE THE STRATEGY`S RETURN AND VOLATILITY OBJECTIVES?

Intalcon strategies target an investor`s net-advantage that exceeds (on average) 25% of benchmark`s total return. The volatility of all our strategies is scaled to the benchmark volatility, so it has the same risk while returns are higher.

Is THE PERFORMANCE RECORD ACTUAL OR HYPOTHETICAL?

Unless otherwise stated, the performance records shown on the website are backtest results.

HOW ARE KEY FIGURES SUCH AS VOLATILITY AND SHARPE RATIO CALCULATED?

We calculate all metrics on a monthly basis.

WHY ARE DIVIDENDS NOT INCLUDED IN THE PERFORMANCE REPORT?

Because they do not add systematic value to our algorithms performance and are then also not included with any backtesting.But because the equity strategy is expected to collect dividends at the same rate as its benchmark the performance should retain its integrity.

WHY ARE STRATEGIES NOT COMPARED TO THEIR FULL BENCHMARK?

We scale all of our strategies to the volatility level of the referenced benchmark which enables an apple-to-apple comparison from the risk perspective.

HOW DO YOU CALCULATE THE PERFORMANCE FEE AND WHEN DOES IT NEED TO BE PAID?

Intalcon provides clients with systematic investment strategies that generate returns exceeding its benchmark`s returns (alpha). Besides a monthly sercive fee of 0.04%, Intalcon charges a 25% performance fee on the generated alpha using a high water mark mechanism with a 24 month lookback period. All fee calculations are based on the asset value at each month`s end.

WHICH WAY ARE TRADE ORDERS TRANSMITTED?

We strive for 100% independence of our customers. Therefore, we recommend a client-site installation of our algorithms. However, during the trial period, all important trading information (new buy and sell orders, cancellations or modifications of limit prices) are displayed in Intalcon`s mobile app. The app is an easy and comfortable way to stay up to date and can be used both on Apple and Android devices. Alternative setups (software installation on the customer`s IT infrastructure or VPS access) can be arranged after consultation.

HOW IS IT ENSURED THAT ALL ALGORITHMS CAN BE USED AT ANY TIME IN THE FUTURE?

For our customers we offer an escrow service agreement. This service helps protect all parties involved in a software license by having a neutral 3rd party escrow agent hold source code, data, and documentation until a mutually-agreed-upon event occurs.