10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT

OF 1934

For the quarterly period ended September 30, 2012

OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from          to         

Commission File Number 000-50735

POTOMAC FUTURES FUND L.P.

(Exact name of registrant as specified in its charter)

New York	13-3937275
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

c/o Ceres Managed Futures LLC

522 Fifth Avenue - 14^th Floor

New York, New York 10036

(Address of principal executive offices) (Zip Code)

(855) 672-4468

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No   

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes X No   

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer    Accelerated filer    Non-accelerated filer X Smaller reporting company   

Indicate by check mark whether the registrant is a shell company (as defined in rule 12b-2 of the Exchange Act).

Yes    No X

As of October 31, 2012, 22,772.7578 Limited Partnership Redeemable Units were outstanding.

POTOMAC FUTURES FUND L.P.

FORM 10-Q

INDEX

		Page Number
PART I - Financial Information:
Item 1.	Financial Statements:
	Statements of Financial Condition at September 30, 2012 (unaudited) and December 31, 2011	3
	Statements of Income and Expenses and Changes in Partners’ Capital for the three and nine months ended September 30, 2012 and 2011 (unaudited)	4
	Notes to Financial Statements, including the Financial Statements of CMF Campbell Master Fund L.P. (unaudited)	5 - 21
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22 – 24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	25 – 26
Item 4.	Controls and Procedures	27
PART II - Other Information
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 5.	Other Information	31
Item 6.	Exhibits	32 - 33

2

PART I

Item 1. Financial Statements

Potomac Futures Fund L.P.

Statements of Financial Condition

	(Unaudited) September  30, 2012		December 31, 2011
Assets:
Investment in Master, at fair value	$	33,053,682	$	40,316,184
Cash		145,353		82,623
Total assets	$	33,199,035	$	40,398,807
Liabilities and Partners’ Capital:
Liabilities:
Accrued expenses:
Brokerage fees	$	152,162	$	185,161
Management fees		54,886		66,834
Other		115,287		113,301
Redemptions payable		230,736		548,767
Total liabilities		553,071		914,063
Partners’ Capital:
General Partner, 265.4926 and 337.4926 unit equivalents outstanding at September 30, 2012 and December 31, 2011, respectively		370,352		448,879
Limited Partners, 23,137.2628 and 29,349.3066 Redeemable Units outstanding at September 30, 2012 and December 31, 2011, respectively		32,275,612		39,035,865
Total partners’ capital		32,645,964		39,484,744
Total liabilities and partners’ capital	$	33,199,035	$	40,398,807
Net asset value per unit	$	1,394.96	$	1,330.04

See accompanying notes to financial statements.

3

Potomac Futures Fund L.P.

Statements of Income and Expenses and Changes in Partners’ Capital

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Investment Income:
Interest income allocated from Master	$	4,496		$	1,260		$	11,864		$	10,146
Expenses:
Expenses allocated from Master		53,601			40,017			153,655			123,190
Brokerage fees		502,034			594,517			1,595,707			1,696,419
Management fees		181,060			214,985			575,077			613,328
Other		8,700			43,960			141,074			158,005
Total expenses		745,395			893,479			2,465,513			2,590,942
Net investment income (loss)		(740,899	)		(892,219	)		(2,453,649	)		(2,580,796	)
Trading Results:
Net realized gains (losses) on closed contracts allocated from Master		35,724			2,185,528			5,216,672			3,172,922
Change in net unrealized gains (losses) on open contracts allocated from Master		1,851,734			(169,477	)		(922,931	)		(2,136,724	)
Total trading results allocated from Master		1,887,458			2,016,051			4,293,741			1,036,198
Net income (loss)		1,146,559			1,123,832			1,840,092			(1,544,598	)
Subscriptions — Limited Partners		613,500			1,365,867			1,114,077			13,549,311
Redemptions — General Partner		(100,437	)		0			(100,437	)		0
Redemptions — Limited Partners		(5,238,617	)		(891,479	)		(9,692,512	)		(6,620,319	)
Net increase (decrease) in Partners’ Capital		(3,578,995	)		1,598,220			(6,838,780	)		5,384,394
Partners’ Capital, beginning of period		36,224,959			39,657,205			39,484,744			35,871,031
Partners’ Capital, end of period	$	32,645,964		$	41,255,425		$	32,645,964		$	41,255,425
Net asset value per unit (23,402.7554 and 29,685.0996 units outstanding at September 30, 2012 and 2011, respectively)	$	1,394.96		$	1,389.77		$	1,394.96		$	1,389.77
Net income (loss) per unit*	$	42.84		$	39.47		$	64.92		$	(57.64	)
Weighted average units outstanding		25,728.3654			29,672.4321			27,573.9692			28,686.5132

* Based on change in net asset value per unit.

See accompanying notes to financial statements.

4

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

1. General:

Potomac Futures Fund L.P. (the “Partnership”) is a limited partnership which was organized on March 14, 1997 under the partnership laws of the State of New York to engage, directly or indirectly, in the speculative trading of a diversified portfolio of commodity interests including futures contracts, options, swap and forward contracts. The sectors traded include currencies, energy, grains, indices, U.S. and non-U.S. interest rates, livestock, metals and softs. The commodity interests that are indirectly traded by the Partnership through its investment in the Master (as defined below) are volatile and involve a high degree of market risk. The Partnership was authorized to sell an unlimited number of redeemable units of limited partnership interest (“Redeemable Units”) during its initial offering period. The Partnership privately and continuously offers Redeemable Units in the Partnership to qualified investors. There is no maximum number of Redeemable Units that may be sold by the Partnership.

Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (the “General Partner”) and commodity pool operator of the Partnership. The General Partner is wholly owned by Morgan Stanley Smith Barney Holdings LLC (“MSSB Holdings”). Morgan Stanley, indirectly through various subsidiaries, owns a majority equity interest in MSSB Holdings. Citigroup Inc. indirectly owns a minority equity interest in MSSB Holdings. Citigroup Inc. also indirectly owns Citigroup Global Markets Inc. (“CGM”), the commodity broker and a selling agent for the Partnership. Prior to July 31, 2009, the date as of which MSSB Holdings became its owner, the General Partner was wholly owned by Citigroup Financial Products Inc., a wholly owned subsidiary of Citigroup Global Markets Holdings Inc., the sole owner of which is Citigroup Inc. As of September 30, 2012, all trading decisions for the Partnership are made by the Advisor (defined below).

On January 1, 2005, the Partnership allocated substantially all of its capital to the CMF Campbell Master Fund L.P. (the “Master”), a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 173,788.6446 units of the Master with cash equal to $172,205,653 and a contribution of open commodity futures and forward contracts with a fair value of $1,582,992. The Master was formed in order to permit accounts managed by Campbell & Company, Inc. (“Campbell” or the “Advisor”) using Campbell’s FME Large Portfolio Program (“FME”), a proprietary, systematic trading program, to invest together in one trading vehicle. The General Partner is also the general partner of the Master. Individual and pooled accounts currently managed by the Advisor, including the Partnership, are permitted to be limited partners of the Master. The General Partner and the Advisor believe that trading through this master/feeder structure promotes efficiency and economy in the trading process. Expenses to investors as a result of the investment in the Master are approximately the same and redemption rights are not affected.

The General Partner is not aware of any material changes to the trading program discussed above during the fiscal quarter ended September 30, 2012.

As of September 30, 2012 and December 31, 2011, the Partnership owned 100% of the Master. The Partnership intends to continue to invest substantially all of its assets in the Master. The performance of the Partnership is directly affected by the performance of the Master. The Master’s trading of futures, forwards, swaps and options contracts, if applicable, on commodities is done primarily on U.S. and foreign commodity exchanges. The Master engages in such trading through a commodity brokerage account maintained with CGM. The Master’s Statements of Financial Condition, including Condensed Schedules of Investments and Statements of Income and Expenses and Changes in Partners’ Capital are included herein.

The General Partner and each limited partner share in the profits and losses of the Partnership in proportion to the amount of partnership interest owned by each except that no limited partner shall be liable for obligations of the Partnership in excess of its capital contribution and profits or losses, if any, net of distributions.

5

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

The accompanying financial statements and accompanying notes are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Partnership’s financial condition at September 30, 2012 and December 31, 2011, and the results of its operations and changes in partners’ capital for the three and nine months ended September 30, 2012 and 2011. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. You should read these financial statements together with the financial statements and notes included in the Partnership’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2011.

The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

6

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

The Master’s Statements of Financial Condition and Condensed Schedules of Investments as of September 30, 2012 and December 31, 2011 and Statements of Income and Expenses and Changes in Partners’ Capital for the three and nine months ended September 30, 2012 and 2011 are presented below:

CMF Campbell Master Fund L.P.

Statements of Financial Condition

	(Unaudited) September 30, 2012		December 31, 2011
Assets:
Equity in trading account:
Cash	$	26,713,022	$	34,085,954
Cash margin		5,743,812		4,716,760
Net unrealized appreciation on open futures contracts		252,498		591,876
Net unrealized appreciation on open forward contracts		392,386		975,939
Total assets	$	33,101,718	$	40,370,529
Liabilities and Partners’ Capital:
Liabilities:
Accrued expenses:
Professional fees	$	49,409	$	54,345
Total liabilities		49,409		54,345
Partners’ Capital:
General Partner, 0.0000 Unit equivalents at September 30, 2012 and December 31, 2011		0		0
Limited Partners, 22,899.3596 and 31,102.0434 units outstanding at September 30, 2012 and December 31, 2011, respectively		33,052,309		40,316,184
Total liabilities and partners’ capital	$	33,101,718	$	40,370,529
Net asset value per unit	$	1,443.37	$	1,296.26

7

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

CMF Campbell Master Fund L.P.

Condensed Schedule of Investments

September 30, 2012

(Unaudited)

	Notional ($)/ Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Energy		74	$	130,890			0.40	%
Grains		69		(33,641	)		(0.10	)
Indices		331		(254,094	)		(0.77	)
Interest Rates Non-U.S.		989		271,264			0.82
Interest Rates U.S.		322		54,134			0.16
Metals		45		112,378			0.34
Total futures contracts purchased				280,931			0.85
Futures Contracts Sold
Energy		2		(1,770	)		(0.01	)
Interest Rates Non-U.S.		33		(4,320	)		(0.01	)
Livestock		45		(9,420	)		(0.03	)
Softs		32		(12,923	)		(0.04	)
Total futures contracts sold				(28,433	)		(0.09	)
Unrealized Appreciation on Open Forward Contracts
Currencies	$	153,618,926		1,615,422			4.89
Metals		211		461,497			1.39
Total unrealized appreciation on open forward contracts				2,076,919			6.28
Unrealized Depreciation on Open Forward Contracts
Currencies	$	139,362,724		(1,227,374	)		(3.71	)
Metals		128		(457,159	)		(1.38	)
Total unrealized depreciation on open forward contracts				(1,684,533	)		(5.09	)
Net fair value			$	644,884			1.95	%

8

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

CMF Campbell Master Fund L.P.

Condensed Schedule of Investments

December 31, 2011

	Notional ($)/ Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Energy		48	$	(533	)		(0.00	)%*
Grains		9		9,843			0.02
Indices		73		94,631			0.24
Interest Rates Non-U.S.		1,131		418,802			1.04
Interest Rates U.S.		185		194,093			0.48
Livestock		7		(2,750	)		(0.01	)
Total futures contracts purchased				714,086			1.77
Futures Contracts Sold
Energy		67		98,948			0.25
Grains		121		(284,500	)		(0.70	)
Indices		77		37,623			0.09
Interest Rates Non-U.S.		29		8,957			0.02
Interest Rates U.S.		123		(13,737	)		(0.03	)
Livestock		9		(7,480	)		(0.02	)
Metals		13		53,895			0.13
Softs		74		(15,916	)		(0.04	)
Total futures contracts sold				(122,210	)		(0.30	)
Unrealized Appreciation on Open Forward Contracts
Currencies	$	86,978,000		1,317,888			3.27
Metals		89		211,388			0.52
Total unrealized appreciation on open forward contracts				1,529,276			3.79
Unrealized Depreciation on Open Forward Contracts
Currencies	$	53,420,743		(500,123	)		(1.24	)
Metals		34		(53,214	)		(0.13	)
Total unrealized depreciation on open forward contracts				(553,337	)		(1.37	)
Net fair value			$	1,567,815			3.89	%

* Due to rounding.

9

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

CMF Campbell Master Fund L.P.

Statements of Income and Expenses and Changes in Partners’ Capital

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Investment Income:
Interest income	$	4,496		$	1,260		$	11,864		$	10,146
Expenses:
Clearing fees		35,758			28,959			96,480			78,686
Professional fees		17,843			11,058			57,175			44,504
Total expenses		53,601			40,017			153,655			123,190
Net investment income (loss)		(49,105	)		(38,757	)		(141,791	)		(113,044	)
Trading Results:
Net gains (losses) on trading of commodity interests:
Net realized gains (losses) on closed contracts		35,724			2,185,528			5,216,672			3,172,922
Change in net unrealized gains (losses) on open contracts		1,851,734			(169,477	)		(922,931	)		(2,136,724	)
Total trading results		1,887,458			2,016,051			4,293,741			1,036,198
Net income (loss)		1,838,353			1,977,294			4,151,950			923,154
Subscriptions — Limited Partners		613,500			1,365,867			1,114,077			13,549,311
Redemptions — Limited Partners		(6,882,649	)		(2,093,191	)		(12,518,038	)		(9,015,200	)
Distribution of interest income to feeder funds		(4,496	)		(1,260	)		(11,864	)		(10,146	)
Net increase (decrease) in Partners’ capital		(4,435,292	)		1,248,710			(7,263,875	)		5,447,119
Partners’ Capital, beginning of period		37,487,601			40,574,401			40,316,184			36,375,992
Partners’ Capital, end of period	$	33,052,309		$	41,823,111		$	33,052,309		$	41,823,111
Net asset value per unit (22,899.3596 and 31,569.1481 units outstanding at September 30, 2012 and 2011, respectively)	$	1,443.37		$	1,324.81		$	1,443.37		$	1,324.81
Net income (loss) per unit*	$	70.83		$	62.93		$	147.54		$	25.82
Weighted average units outstanding		26,778.5546			32,038.1060			28,530.8988			31,825.4520

* Based on change in net asset value per unit.

10

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

2. Financial Highlights:

Changes in net asset value per unit for the three and nine months ended September 30, 2012 and 2011 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net realized and unrealized gains (losses) allocated from Master*	$	50.74		$	48.52		$	92.29		$	(29.48	)
Interest income allocated from Master		0.17			0.05			0.43			0.38
Expenses **		(8.07	)		(9.10	)		(27.80	)		(28.54	)
Increase (decrease) for the period		42.84			39.47			64.92			(57.64	)
Net asset value per unit, beginning of period		1,352.12			1,350.30			1,330.04			1,447.41
Net asset value per unit, end of period	$	1,394.96		$	1,389.77		$	1,394.96		$	1,389.77

* Includes Partnership brokerage fees and clearing fees allocated from the Master.

** Excludes Partnership brokerage fees and clearing fees allocated from the Master.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011***			2012			2011***
Ratio to average net assets:****
Net investment income (loss)		(8.5	)%		(8.5	)%		(8.8	)%		(8.7	)%
Incentive fees		0	%		0	%		0	%		0	%
Net investment income (loss) before incentive fees*****		(8.5	)%		(8.5	)%		(8.8	)%		(8.7	)%
Operating expenses		8.5	%		8.5	%		8.8	%		8.7	%
Incentive fees		0	%		0	%		0	%		0	%
Total expenses		8.5	%		8.5	%		8.8	%		8.7	%
Total return:
Total return before incentive fees		3.2	%		2.9	%		4.9	%		(4.0	)%
Incentive fees		0	%		0	%		0	%		0	%
Total return after incentive fees		3.2	%		2.9	%		4.9	%		(4.0	)%

*** The ratios are shown net and gross of incentive fees to conform to current period presentation.

**** Annualized (other than incentive fees).

***** Interest income allocated from the Master less total expenses.

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average net assets.

11

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

Financial Highlights of the Master:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net realized and unrealized gains (losses)*	$	71.37		$	63.24		$	149.18		$	26.92
Interest income		0.17			0.04			0.43			0.34
Expenses **		(0.71	)		(0.35	)		(2.07	)		(1.44	)
Increase (decrease) for the period		70.83			62.93			147.54			25.82
Distribution of interest income to feeder funds		(0.17	)		(0.04	)		(0.43	)		(0.34	)
Net asset value per unit, beginning of period		1,372.71			1,261.92			1,296.26			1,299.33
Net asset value per unit, end of period	$	1,443.37		$	1,324.81		$	1,443.37		$	1,324.81

* Includes clearing fees.

** Excludes clearing fees.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Ratios to Average Net Assets:***
Net investment income (loss)****		(0.5	)%		(0.4	)%		(0.5	)%		(0.4	)%
Operating expenses		0.6	%		0.4	%		0.5	%		0.4	%
Total return		5.2	%		5.0	%		11.4	%		2.0	%

*** Annualized.

**** Interest income less total expenses.

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average net assets.

3. Trading Activities:

The Partnership was formed for the purpose of trading contracts in a variety of commodity interests, including derivative financial instruments and derivative commodity instruments. The Partnership invests substantially all of its assets through a “master/feeder” structure. The Partnership’s pro-rata share of the results of the Master’s trading activities are shown in the Statements of Income and Expenses and Changes in Partners’ Capital.

The customer agreements between the Partnership and CGM and the Master and CGM give the Partnership and the Master, respectively, the legal right to net unrealized gains and losses on open futures and on open forward contracts. The Master nets, for financial reporting purposes, the unrealized gains and losses on open futures and on open forward contracts on the Statements of Financial Condition as the criteria under Accounting Standards Codification (“ASC”) 210-20, “Balance Sheet,” have been met.

Brokerage fees are calculated as a percentage of the Partnership’s adjusted net asset value on the last day of each month and are affected by trading performance, subscriptions and redemptions.

12

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

All of the commodity interests owned by the Master are held for trading purposes. The monthly average number of futures contracts traded during the three months ended September 30, 2012 and 2011 were 2,236 and 1,673, respectively. The monthly average number of futures contracts traded during the nine months ended September 30, 2012 and 2011 were 2,056 and 1,614, respectively. The monthly average number of metals forward contracts traded during the three months ended September 30, 2012 and 2011 were 449 and 238, respectively. The monthly average number of metals forward contracts traded during the nine months ended September 30, 2012 and 2011 were 322 and 167, respectively. The monthly average notional values of currency forward contracts during the three months ended September 30, 2012 and 2011 were $405,896,707 and $660,781,804, respectively. The monthly average notional values of currency forward contracts during the nine months ended September 30, 2012 and 2011 were $341,579,439 and $615,634,709, respectively. The monthly average notional values of currency option contracts during the three months ended September 30, 2012 and 2011 were $0 and $39,274,753,998, respectively. The monthly average notional values of currency option contracts during the nine months ended September 30, 2012 and 2011 were $0 and $44,099,454,339, respectively. The following tables indicate the gross fair values of derivative instruments of futures, forward and options contracts as separate assets and liabilities as of September 30, 2012 and December 31, 2011.

Assets	September 30, 2012
Futures Contracts
Energy	$	138,307
Grains		31,394
Indices		26,597
Interest Rates Non-U.S.		285,983
Interest Rates U.S.		79,189
Livestock		8,100
Metals		119,695
Softs		8,545
Total unrealized appreciation on open futures contracts	$	697,810
Liabilities
Futures Contracts
Energy	$	(9,187	)
Grains		(65,035	)
Indices		(280,691	)
Interest Rates Non-U.S.		(19,039	)
Interest Rates U.S.		(25,055	)
Livestock		(17,520	)
Metals		(7,317	)
Softs		(21,468	)
Total unrealized depreciation on open futures contracts	$	(445,312	)
Net unrealized appreciation on open futures contracts	$	252,498	*
Assets
Forward Contracts
Currencies	$	1,615,422
Metals		461,497
Total unrealized appreciation on open forward contracts	$	2,076,919
Liabilities
Forward Contracts
Currencies	$	(1,227,374	)
Metals		(457,159	)
Total unrealized depreciation on open forward contracts	$	(1,684,533	)
Net unrealized appreciation on open forward contracts	$	392,386	**

* This amount is in “Net unrealized appreciation on open futures contracts” on the Master’s Statements of Financial Condition.

** This amount is in “Net unrealized appreciation on open forward contracts” on the Master’s Statements of Financial Condition.

13

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

Assets	December 31, 2011
Futures Contracts
Energy	$	120,537
Grains		9,843
Indices		145,602
Interest Rates Non-U.S.		494,099
Interest Rates U.S.		195,796
Livestock		700
Metals		53,895
Softs		45,714
Total unrealized appreciation on open futures contracts	$	1,066,186
Liabilities
Futures Contracts
Energy	$	(22,122	)
Grains		(284,500	)
Indices		(13,348	)
Interest Rates Non-U.S.		(66,339	)
Interest Rates U.S.		(15,441	)
Livestock		(10,930	)
Softs		(61,630	)
Total unrealized depreciation on open futures contracts	$	(474,310	)
Net unrealized appreciation on open futures contracts	$	591,876	*
Assets
Forward Contracts
Currencies	$	1,317,888
Metals		211,388
Total unrealized appreciation on open forward contracts	$	1,529,276
Liabilities
Forward Contracts
Currencies	$	(500,123	)
Metals		(53,214	)
Total unrealized depreciation on open forward contracts	$	(553,337	)
Net unrealized appreciation on open forward contracts	$	975,939	**
*       This amount is in “Net unrealized appreciation on open futures contracts” on the Master’s Statements of Financial Condition. **     This amount is in “Net unrealized appreciation on open forward contracts” on the Master’s Statements of Financial Condition.

14

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

The following table indicates the trading gains and losses, by market sector, on derivative instruments for the three and nine months ended September 30, 2012 and 2011.

	Three Months Ended September 30,						Nine Months Ended September 30,
Sector	2012			2011			2012			2011
Currencies	$	238,122		$	(1,683,768	)	$	(271,416	)	$	(1,166,638	)
Energy		117,288			(552,413	)		720,115			(428,277	)
Grains		718,121			(470,666	)		569,227			(881,655	)
Indices		834,805			(745,242	)		943,831			(2,131,747	)
Interest Rates U.S.		250,328			1,682,966			746,316			2,517,194
Interest Rates Non-U.S.		124,096			3,937,196			1,600,256			3,697,786
Livestock		(177,390	)		(100,880	)		(264,940	)		(249,630	)
Metals		(14,512	)		343,462			(325,329	)		8,029
Softs		(203,400	)		(394,604	)		575,681			(328,864	)
Total	$	1,887,458	***	$	2,016,051	***	$	4,293,741	***	$	1,036,198	***

***  This amount is in “Total trading results” on the Master’s Statements of Income and Expenses and Changes in Partners’ Capital.

4. Fair Value Measurements:

Partnership’s Investments. The Partnership values its investment in the Master at its net asset value per unit as calculated by the Master. The Master values its investments as described in Note 2 of the Master’s notes to the annual financial statements as of December 31, 2011.

Partnership’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s Level 2 assets and liabilities.

The Partnership will separately present purchases, sales, issuances and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

Effective January 1, 2012, the Partnership adopted Accounting Standards Update (“ASU”) 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards [(“IFRS”)].” The amendments within this ASU change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements to eliminate unnecessary wording differences between GAAP and IFRS. However, some of the amendments clarify the Financial Accounting Standards Board’s (“FASB”) intent about the application of existing fair value measurement requirements and other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This new guidance did not have a significant impact on the Partnership’s financial statements.

15

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

The Partnership values its investment in the Master with no rights or obligations inherent within the ownership interest held by the Partnership based on the end of the day net asset value of the Master (Level 2). The value of the Partnership’s investment in the Master reflects its proportional interest in the Master. As of and for the periods ended September 30, 2012 and December 31, 2011, the Partnership did not hold any derivative instruments that were based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) or priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets and liabilities between Level 1 and Level 2.

	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Master	$	33,053,682	$	—	$	33,053,682	$	—
Net fair value	$	33,053,682	$	—	$	33,053,682	$	—
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Master	$	40,316,184	$	—	$	40,316,184	$	—
Net fair value	$	40,316,184	$	—	$	40,316,184	$	—

Master’s Investments. All commodity interests of the Master (including derivative financial instruments and derivative commodity instruments) are held for trading purposes. The commodity interests are recorded on trade date and open contracts are recorded at fair value (as described below) at the measurement date. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the measurement date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts are included as a component of equity in trading account on the Statements of Financial Condition. Net realized gains or losses and any change in net unrealized gains or losses from the preceding period are reported in the Statements of Income and Expenses and Changes in Partners’ Capital.

Master’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that based on available information in the marketplace, the Master’s Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Master’s Level 2 assets and liabilities.

The Master will separately present purchases, sales, issuances and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

16

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

The Master considers prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of non-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets and liabilities from observable inputs (Level 2). As of and for the periods ended September 30, 2012 and December 31, 2011, the Master did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

	September 30, 2012		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Futures	$	697,810	$	697,810	$	—	$	—
Forwards		2,076,919		461,497		1,615,422		—
Total assets		2,774,729		1,159,307		1,615,422		—
Liabilities
Futures	$	445,312	$	445,312	$	—	$	—
Forwards		1,684,533		457,159		1,227,374		—
Total liabilities		2,129,845		902,471		1,227,374		—
Net fair value	$	644,884	$	256,836	$	388,048	$	—
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Futures	$	1,066,186	$	1,066,186	$	—	$	—
Forwards		1,529,276		211,388		1,317,888		—
Total assets		2,595,462		1,277,574		1,317,888		—
Liabilities
Futures	$	474,310	$	474,310	$	—	$	—
Forwards		553,337		53,214		500,123		—
Total liabilities		1,027,647		527,524		500,123		—
Net fair value	$	1,567,815	$	750,050	$	817,765	$	—

17

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

5. Financial Instrument Risks:

In the normal course of business, the Partnership, through its investment in the Master, is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures, options and swaps, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash balances, or to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange or over-the-counter (“OTC”). Exchange-traded instruments are standardized and include futures and certain forward and option contracts. OTC contracts are negotiated between contracting parties and include swaps and certain forwards and option contracts. Specific market movements of commodities or futures contracts underlying an option cannot accurately be predicated. Each of these instruments is subject to various risks similar to those related to the underlying financial instruments including market and credit risk. In general, the risks associated with OTC contracts are greater than those associated with exchange-traded instruments because of the greater risk of default by the counterparty to an OTC contract. The General Partner estimates that at any given time approximately 21.5% to 40.0% of the Partnership’s/Master’s contracts are traded OTC.

The risk to the limited partners that have purchased Redeemable Units is limited to the amount of their share of the Partnership’s net assets and undistributed profits. This limited liability is a result of the organization of the Partnership as a limited partnership under New York law.

Market risk is the potential for changes in the value of the financial instruments traded by the Partnership/Master due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded. The Partnership/Master is exposed to a market risk equal to the value of futures and forward contracts purchased and unlimited liability on such contracts sold short.

Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. The Partnership’s/Master’s risk of loss in the event of a counterparty default is typically limited to the amounts recognized in the Statements of Financial Condition and is not represented by the contract or notional amounts of the instruments. The Partnership’s/Master’s risk of loss is reduced through the use of legally enforceable master netting agreements with counterparties that permit the Partnership/Master to offset unrealized gains and losses and other assets and liabilities with such counterparties upon the occurrence of certain events. The Partnership/Master has credit risk and concentration risk as CGM or a CGM affiliate is the sole counterparty or broker with respect to the Partnership’s/Master’s assets. Credit risk with respect to exchange-traded instruments is reduced to the extent that, through CGM, the Partnership’s/Master’s counterparty is an exchange or clearing organization.

As both a buyer and seller of options, the Partnership/Master pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. Written options expose the Partnership/Master to potentially unlimited liability; for purchased options, the risk of loss is limited to the premiums paid. Certain written put options permit cash settlement and do not require the option holder to own the reference asset. The Partnership/Master does not consider these contracts to be guarantees.

The General Partner monitors and attempts to control the Partnership’s/Master’s risk exposure on a daily basis through financial, credit and risk management monitoring systems, and accordingly believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership/Master may be subject. These monitoring systems generally allow the General Partner to statistically analyze actual trading results with risk adjusted performance indicators and correlation statistics. In addition, online monitoring systems provide account analysis of futures, forwards and options positions by sector, margin requirements, gain and loss transactions and collateral positions.

The majority of these financial instruments mature within one year of the inception date. However, due to the nature of the Partnership’s/Master’s business, these instruments may not be held to maturity.

18

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

6. Critical Accounting Policies

Use of Estimates. The preparation of financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Partnership’s Investments. The Partnership values its investment in the Master at its net asset value per unit as calculated by the Master. The Master values its investments as described in Note 2 of the Master’s notes to the annual financial statements as of December 31, 2011.

Partnership’s and Master’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that based on available information in the marketplace, the Masters’s Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s and Master’s Level 2 assets and liabilities.

The Partnership will separately present purchases, sales, issuances and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

The Partnership values its investment in the Master where there are no other rights or obligations inherent within the ownership interest held by the Partnership based on the end of the day net asset value of the Master (Level 2). The value of the Partnership’s investment in the Master reflects its proportional interest in the Master. As of and for the periods ended September 30, 2012 and December 31, 2011, the Partnership did not hold any derivative instruments that were based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) or priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

The Master considers prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of non-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets and liabilities from observable inputs (Level 2). As of and for the periods ended September 30, 2012 and December 31, 2011, the Master did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

19

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

Futures Contracts. The Master trades futures contracts. A futures contract is a firm commitment to buy or sell a specified quantity of investments, currency or a standardized amount of a deliverable grade commodity, at a specified price on a specified future date, unless the contract is closed before the delivery date or if the delivery quantity is something where physical delivery cannot occur (such as the S&P 500 Index), whereby such contract is settled in cash. Payments (“variation margin”) may be made or received by the Master each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Master. When the contract is closed, the Master records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in futures contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the futures broker, directly with the exchange on which the contracts are traded. Net realized gains (losses) and changes in net unrealized gains (losses) on futures contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Forward Foreign Currency Contracts. Forward foreign currency contracts are those contracts where the Master agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. Forward foreign currency contracts are valued daily, and the Master’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statements of Financial Condition. Net realized gains (losses) and changes in net unrealized gains (losses) on forward foreign currency contracts are recognized in the period in which the contract is closed or the changes occur, respectively, and are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

The Master does not isolate that portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations from changes in market prices of investments held. Such fluctuations are included in net income (loss) on investments in the Statements of Income and Expenses and Changes in Partners’ Capital.

London Metals Exchange Forward Contracts. Metal contracts traded on the London Metals Exchange (“LME”) represent a firm commitment to buy or sell a specified quantity of aluminum, copper, lead, nickel, tin or zinc. LME contracts traded by the Master are cash settled based on prompt dates published by the LME. Payments (“variation margin”) may be made or received by the Master each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Master. A contract is considered offset when all long positions have been matched with a like number of short positions settling on the same prompt date. When the contract is closed at the prompt date, the Master records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in LME contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the broker, directly with the LME. Net realized gains (losses) and changes in net unrealized gains (losses) on metal contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Options. The Master may purchase and write (sell) both exchange–listed and OTC options on commodities or financial instruments. An option is a contract allowing, but not requiring, its holder to buy (call) or sell (put) a specific or standard commodity or financial instrument at a specified price during a specified time period. The option premium is the total price paid or received for the option contract. When the Master writes an option, the premium received is recorded as a liability in the Statements of Financial Condition and marked to market daily. When the Master purchases an option, the premium paid is recorded as an asset in the Statements of Financial Condition and marked to market daily. Net realized gains (losses) and changes in net unrealized gains (losses) on option contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Income Taxes. Income taxes have not been provided as each partner is individually liable for the taxes, if any, on its share of the Partnership’s income and expenses.

20

Potomac Futures Fund L.P.

Notes to Financial Statements

September 30, 2012

(Unaudited)

GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions with respect to tax at the Partnership level not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. The General Partner concluded that no provision for income tax is required in the Partnership’s financial statements.

The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The 2009 through 2011 tax years remain subject to examination by U.S. federal and most state tax authorities. The General Partner does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Subsequent Events. The General Partner evaluates events that occur after the balance sheet date but before financial statements are filed. The General Partner has assessed the subsequent events through the date of filing and determined that there were no subsequent events requiring adjustment of or disclosure in the financial statements.

Recent Accounting Pronouncements. In October 2011, FASB issued a proposed ASU intended to improve and converge financial reporting by setting forth consistent criteria for determining whether an entity is an investment company. Under longstanding GAAP, investment companies carry all of their investments at fair value, even if they hold a controlling interest in another company. The primary changes being proposed by FASB relate to which entities would be considered investment companies as well as certain disclosure and presentation requirements. In addition to the changes to the criteria for determining whether an entity is an investment company, FASB also proposes that an investment company consolidate another investment company if it holds a controlling financial interest in the entity. In August 2012, FASB updated the proposed ASU to state that entities regulated under the Investment Company Act of 1940 should qualify to be investment companies within the proposed investment company guidance. The Partnership will evaluate the impact that this proposed update would have on the financial statements once the pronouncement is issued.

In December 2011, FASB issued ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities,” which creates a new disclosure requirement about the nature of an entity’s rights of setoff and the related arrangements associated with its financial instruments and derivative instruments. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of IFRS. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Partnership should also provide the disclosures retrospectively for all comparative periods presented. The Partnership is currently evaluating the impact that the pronouncement would have on the financial statements.

Net Income (Loss) per unit. Net income (loss) per unit is calculated in accordance with investment company guidance. See Note 2, “Financial Highlights.”

21

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Liquidity and Capital Resources

The Partnership does not engage in sales of goods or services. Its only assets are its investment in the Master and cash. The Master does not engage in sales of goods or services. The Master’s only assets are its equity in its trading account, consisting of cash, cash margin, net unrealized appreciation on open futures contracts and net unrealized appreciation on open forward contracts. Because of the low margin deposits normally required in commodity futures trading, relatively small price movements may result in substantial losses to the Partnership, through its investment in the Master. While substantial losses could lead to a material decrease in liquidity, no such illiquidity occurred in the third quarter of 2012.

The Partnership’s capital consists of the capital contributions of the partners, as increased or decreased by income (loss) from its investment in the Master, expenses, interest income, redemptions of Redeemable Units and distributions of profits, if any.

For the nine months ended September 30, 2012, Partnership capital decreased 17.3% from $39,484,744 to $32,645,964. This decrease was attributable to the redemption of 7,014.3208 Redeemable Units totaling $9,692,512 and 72.0000 General Partner unit equivalents were redeemed totaling $100,437, which was partially offset by net income of $1,840,092, coupled with the subscriptions of 802.2770 Redeemable Units totaling $1,114,077. Future redemptions can impact the amount of funds available for investment in the Master in subsequent periods.

The Master’s capital consists of the capital contributions of the partners as increased or decreased by realized and/or unrealized gains or losses on trading, expenses, interest income, redemptions of units and distributions of profits, if any.

For the nine months ended September 30, 2012, the Master’s capital decreased 18.0% from $40,316,184 to $33,052,309. This decrease was attributable to the redemption of 8,996.7288 units totaling $12,518,038 and distribution of interest income to feeder funds totaling $11,864, which was partially offset by net income of $4,151,950, coupled with the subscriptions of 794.0450 units totaling $1,114,077. Future redemptions can impact the amount of funds available for investment in commodity contract positions in subsequent periods.

Critical Accounting Policies

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expense during the reporting period. Management believes that the estimates and assumptions utilized in preparing the financial statements are reasonable. Actual results could differ from those estimates. The Partnership’s significant accounting policies are described in detail in Note 6 of the Financial Statements.

The Partnership records all investments at fair value in its financial statements, with changes in fair value reported as a component of net realized gains (losses) and change in net unrealized gains (losses) in the Statements of Income and Expenses and Changes in Partners’ Capital.

22

Results of Operations

During the Partnership’s third quarter of 2012, the net asset value per unit increased 3.2% from $1,352.12 to $1,394.96 as compared to an increase of 2.9% in the third quarter of 2011. The Partnership, through its investment in the Master, experienced a net trading gain before brokerage fees and related fees in the third quarter of 2012 of $1,887,458. Gains were primarily attributable to the Master’s trading of commodity futures in currencies, energy, grains, indices, U.S. and non-U.S. interest rates and were partially offset by losses in livestock, metals and softs. The Partnership, through its investment in the Master, experienced a net trading gain before brokerage fees and related fees in the third quarter of 2011 of $2,016,051. Gains were primarily attributable to the Master’s trading of commodity futures in U.S. and non-U.S. interest rates and metals and were partially offset by losses in currencies, energy, grains, indices, livestock and softs.

The most significant gains were recorded within the global stock index sector during August and September from long positions in U.S. and European equity index futures as prices moved higher on better-than-expected reports of U.S. corporate earnings and after the U.S. Federal Reserve’s plan to buy mortgage securities fueled demand for “riskier” assets. Within the global interest rate sector, gains were achieved during July from long positions in European and U.S. fixed income futures as prices advanced on concern the global economic recovery is slowing. Within the agricultural complex, gains were experienced during July from long futures positions in corn, wheat, and soybeans as prices rose after a heat wave and drought in the U.S. Midwest threatened to limit output. Gains were also recorded within the currency markets during July from short positions in the euro and Swiss franc versus the U.S. dollar as the value of these European currencies declined against the U.S. dollar after European Central Bank President Mario Draghi said the euro-zone still faces risks after policy makers cut interest rates to a record low. Within the energy sector, gains were achieved during August from long futures positions in RBOB (unleaded) gasoline and heating oil as prices advanced on speculation of increased energy demand.

During the Partnership’s nine months ended September 30, 2012, the net asset value per unit increased 4.9% from $1,330.04 to $1,394.96 as compared to a decrease of 4.0% in the nine months ended September 30, 2011. The Partnership, through its investment in the Master, experienced a net trading gain before brokerage fees and related fees in the nine months ended September 30, 2012 of $4,293,741. Gains were primarily attributable to the Master’s trading of commodity futures in energy, grains, indices, U.S. and non-U.S. interest rates and softs and were partially offset by losses in currencies, livestock and metals. The Partnership, through its investment in the Master, experienced a net trading gain before brokerage fees and related fees in the nine months ended September 30, 2011 of $1,036,198. Gains were primarily attributable to the Master’s trading of commodity futures in U.S. and non-U.S. interest rates and metals and were partially offset by losses in currencies, energy, grains, indices, livestock and softs.

The most significant gains were recorded within the global interest rate sector during April and May from long positions in European and U.S. fixed income futures as prices advanced after Standard & Poor’s cut Spain’s credit rating and Greece failed to form a unified government, adding to concern central banks and politicians are failing to contain the European debt crisis. During July, long positions in European and U.S. fixed income futures resulted in further gains as prices climbed higher on concern the global economic recovery is slowing. Within the global stock index markets, gains were achieved during January and February from long positions in U.S., European, and Pacific Rim equity index futures as prices were buoyed by better-than-expected economic reports in these regions. Gains were also recorded during August and September from long positions in U.S. and European equity index futures as prices moved higher on better-than-expected reports of U.S. corporate earnings and after the U.S. Federal Reserve’s plan to buy mortgage securities fueled demand for “riskier” assets. Within the agricultural complex, gains were recorded during February and March from short positions in coffee futures as prices declined on signs of abundant supplies from Brazil, the world’s biggest grower of coffee. During July, long futures positions in corn, wheat, and soybeans resulted in additional gains as prices rose after a heat wave and drought in the U.S. Midwest threatened to limit output. Gains were experienced within the energy markets during January and March from short positions in natural gas futures as prices dropped amid ample inventories and mild weather across the U.S. Additional gains were experienced during February from long futures positions in RBOB (unleaded) gasoline, Brent crude, and gas oil as prices increased on concerns over inventory levels and rising tensions in the Middle East. A portion of the Partnership’s gains for the first nine months of the year was offset by losses incurred within the metals markets, primarily in January, from short positions in zinc and aluminum futures as prices advanced on speculation metals demand will be supported by economic expansion in the U.S. and an easing credit policy in China. Smaller losses were experienced in this sector during February and March. Within the currency sector, losses were recorded during March from long positions in the Australian dollar and New Zealand dollar versus the U.S. dollar as the value of these commodity-linked currencies fell against the U.S. dollar amid concern about slowing growth in China. Additional currency losses were experienced during June from short positions in the euro, Swiss franc, and British pound versus the U.S. dollar as the value of these European currencies increased against the U.S. dollar after European Union leaders eased terms on Spanish bank loans and moved towards resolving the region’s debt crisis. During August, short positions in the Swiss franc and euro versus the U.S. dollar resulted in losses as the value of these European currencies moved higher against the U.S. dollar.

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Commodity futures markets are highly volatile. The potential for broad and rapid price fluctuations increases the risks involved in commodity trading, but also increases the possibility of profit. The profitability of the Partnership (and the Master) depends on the existence of major price trends and the ability of the Advisor to correctly identify those price trends. Price trends are influenced by, among other things, changing supply and demand relationships, weather, governmental, agricultural, commercial and trade programs and policies, national and international political and economic events and changes in interest rates. To the extent that market trends exist and the Advisor is able to identify them, the Partnership (and the Master) expects to increase capital through operations.

Interest income on 80% of the Partnership’s average daily equity allocated to it by the Master was earned at a 30-day U.S. Treasury bill rate determined weekly by CGM based on the average non-competitive yield on 3-month U.S. Treasury bills maturing in 30 days. Interest income allocated from the Master for the three and nine months ended September 30, 2012 increased by $3,236 and $1,718, respectively, as compared to the corresponding periods in 2011. The increase in interest income is due to higher U.S. Treasury bill rates during the three and nine months ended September 30, 2012 as compared to the corresponding periods in 2011. Interest earned by the Partnership will increase the net asset value of the Partnership. The amount of interest income earned by the Partnership depends on the average daily equity in the Master’s account and upon interest rates over which neither the Partnership/Master nor CGM has control.

Brokerage fees are calculated as a percentage of the Partnership’s adjusted net asset value as of the end of each month and are affected by trading performance, subscriptions and redemptions. Accordingly, they must be analyzed in relation to the fluctuations in the monthly net asset values. Brokerage fees for the three and nine months ended September 30, 2012 decreased by $92,483 and $100,712, respectively, as compared to the corresponding periods in 2011. The decrease in brokerage fees is due to a decrease in the average net assets during the three and nine months ended September 30, 2012 as compared to the corresponding periods in 2011.

Management fees are calculated as a percentage of the Partnership’s net asset value as of the end of each month and are affected by trading performance, subscriptions and redemptions. Management fees for the three and nine months ended September 30, 2012 decreased by $33,925 and $38,251, respectively, as compared to the corresponding periods in 2011. The decrease in management fees is due to a decrease in average net assets during the three and nine months ended September 30, 2012 as compared to the corresponding periods in 2011.

Incentive fees are based on the new trading profits generated by the Advisor at the end of the quarter, as defined in the advisory agreements between the Partnership, the General Partner and the Advisor. There were no incentive fees earned for the three and nine months ended September 30, 2012 and 2011. The Advisor will not be paid incentive fees until the Advisor recovers the net loss incurred and earns additional new trading profits for the Partnership.

In allocating substantially all of the assets of the Partnership to the Master, the General Partner considers the Advisor’s past performance, trading style, volatility of markets traded and fee requirements. The General Partner may modify or terminate the allocation of assets to the Advisor at any time.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk

All of the Partnership’s assets are subject to the risk of trading loss through its investment in the Master. The Master is a speculative commodity pool. The market sensitive instruments held by the Master are acquired for speculative trading purposes, and all or substantially all of the Partnership’s assets are subject to the risk of trading loss through its investment in the Master. Unlike an operating company, the risk of market sensitive instruments is integral, not incidental, to the Master’s and the Partnership’s main line of business.

The limited partners will not be liable for losses exceeding the current net asset value of their investment.

Market movements result in frequent changes in the fair market value of the Master’s open positions and, consequently, in its earnings and cash balances. The Master’s market risk is influenced by a wide variety of factors, including the level and volatility of interest rates, exchange rates, equity price levels, the market value of financial instruments and contracts, the diversification effects among the Master’s open contracts and the liquidity of the markets in which they trade.

The Master rapidly acquires and liquidates both long and short positions in a wide range of different markets. Consequently, it is not possible to predict how a particular future market scenario will affect performance, and the Master’s past performance is not necessarily indicative of its future results.

“Value at Risk” is a measure of the maximum amount which the Master could reasonably be expected to lose in a given market sector. However, the inherent uncertainty of the Master’s speculative trading and the recurrence in the markets traded by the Master of market movements far exceeding expectations could result in actual trading or non-trading losses far beyond the indicated Value at Risk or the Master’s experience to date (i.e., “risk of ruin”). In light of the foregoing as well as the risks and uncertainties intrinsic to all future projections, the inclusion of the quantification in this section should not be considered to constitute any assurance or representation that the Master’s losses in any market sector will be limited to Value at Risk or by the Master’s attempts to manage its market risk.

Exchange maintenance margin requirements have been used by the Master as the measure of its Value at Risk. Maintenance margin requirements are set by exchanges to equal or exceed the maximum losses reasonably expected to be incurred in the fair value of any given contract in 95%-99% of any one-day interval. Maintenance margin has been used rather than the more generally available initial margin, because initial margin includes a credit risk component, which is not relevant to Value at Risk.

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Value at Risk tables represent a probabilistic assessment of the risk of loss in market risk sensitive instruments. The following tables indicate the trading Value at Risk associated with the Master’s open positions by market category as of September 30, 2012 and December 31, 2011, and the highest, lowest and average values during the three months ended September 30, 2012 and for the twelve months ended December 31, 2011 . All open position trading risk exposures of the Master have been included in calculating the figures set forth below. There has been no material change in the trading Value at Risk information previously disclosed in the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2011.

As of September 30, 2012, the Master’s total capitalization was $33,052,309 and the Partnership owned 100.0% of the Master. The Partnership invests substantially all of its assets in the Master. The Master’s Value at Risk as of September 30, 2012 was as follows:

September 30, 2012

						Three Months Ended September 30, 2012
Market Sector	Value at Risk		% of Total Capitalization			High Value at  Risk		Low Value at  Risk		Average Value at Risk*
Currencies	$	2,095,452		6.34	%	$	3,018,274	$	769,857	$	2,184,612
Energy		312,250		0.95	%		384,825		37,701		252,612
Grains		168,750		0.51	%		402,225		54,881		262,775
Indices		1,100,474		3.33	%		1,632,915		315,201		1,069,100
Interest Rates U.S.		272,475		0.82	%		285,150		46,645		263,607
Interest Rates Non-U.S.		1,175,453		3.56	%		1,786,819		670,319		1,318,552
Livestock		55,650		0.17	%		59,450		12,690		36,955
Metals		714,703		2.16	%		1,410,134		372,974		713,356
Softs		83,200		0.25	%		190,500		35,050		135,700
Total	$	5,978,407		18.09	%

* Average of month-end Values at Risk.

As of December 31, 2011, the Master’s total capitalization was $40,316,184 and the Partnership owned 100.0% of the Master. The Partnership invests substantially all of its assets in the Master. The Master’s Value at Risk as of December 31, 2011 was as follows:

December 31, 2011
						Twelve Months Ended December 31, 2011
Market Sector	Value at Risk		% of Total Capitalization			High Value at  Risk		Low Value at  Risk		Average Value at Risk*
Currencies	$	1,720,183		4.27	%	$	2,962,979	$	771,765	$	1,731,613
Energy		369,050		0.92	%		670,680		138,902		332,788
Grains		226,625		0.56	%		391,825		31,425		128,589
Indices		730,850		1.81	%		2,014,273		341,913		874,845
Interest Rates U.S.		269,002		0.67	%		1,022,250		23,777		346,651
Interest Rates Non-U.S.		1,481,068		3.67	%		1,912,464		142,967		1,036,787
Livestock		10,975		0.03	%		173,150		2,400		39,698
Metals		738,537		1.83	%		811,572		155,338		479,829
Softs		234,900		0.58	%		279,000		13,950		127,271
Total	$	5,781,190		14.34	%

* Annual average of month-end Values at Risk.

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Item 4. Controls and Procedures

The Partnership’s disclosure controls and procedures are designed to ensure that information required to be disclosed by the Partnership on the reports that it files or submits under the Securities Exchange Act of 1934 (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods expected in the SEC’s rules and forms. Disclosure controls and procedures include controls and procedures designed to ensure that information required to be disclosed by the Partnership in the reports it files is accumulated and communicated to management, including the President and Chief Financial Officer (“CFO”) of the General Partner, to allow for timely decisions regarding required disclosure and appropriate SEC filings.

The General Partner is responsible for ensuring that there is an adequate and effective process for establishing, maintaining and evaluating disclosure controls and procedures for the Partnership’s external disclosures.

The General Partner’s President and CFO have evaluated the effectiveness of the Partnership’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2012 and, based on that evaluation, the General Partner’s President and CFO have concluded that, at that date, the Partnership’s disclosure controls and procedures were effective.

The Partnership’s internal control over financial reporting is a process under the supervision of the General Partner’s President and CFO to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. These controls include policies and procedures that:

• pertain to the maintenance of records, that in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;

• provide reasonable assurance that (i) transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP and (ii) the Partnership’s receipts are handled and expenditures are made only pursuant to authorizations of the General Partner; and

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.

There were no changes in the Partnership’s internal control over financial reporting process during the fiscal quarter ended September 30, 2012 that materially affected, or are reasonably likely to materially affect, the Partnership’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The following information supplements and amends the discussion set forth under Part I, Item 3. “Legal Proceedings” in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as updated by the Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012.

This section describes the major pending legal proceedings, other than ordinary routine litigation incidental to the business, to which CGM or its subsidiaries is a party or to which any of their property is subject. There are no material legal proceedings pending against the Partnership or the General Partner.

CGM (together with Citigroup Inc. and its other subsidiaries, “Citigroup”) (formerly known as Salomon Smith Barney Inc.) is a New York corporation with its principal place of business at 388 Greenwich St., New York, New York 10013. CGM is registered as a broker-dealer and futures commission merchant (“FCM”), and provides futures brokerage and clearing services for institutional and retail participants in the futures markets. CGM and its affiliates also provide investment banking and other financial services for clients worldwide.

There have been no material administrative, civil or criminal actions within the past five years against CGM or any of its individual principals and no such actions are currently pending, except as follows.

RMBS Litigation and Other Matters

On May 4, 2012, the district court in FEDERAL HOUSING FINANCE AGENCY v. UBS AMERICAS, INC., ET AL., a parallel case to FEDERAL HOUSING FINANCE AGENCY v. ALLY FINANCIAL INC., ET AL., FEDERAL HOUSING FINANCE AGENCY v. CITIGROUP INC., ET AL., and FEDERAL HOUSING FINANCE AGENCY v. JPMORGAN CHASE & CO., ET AL., denied defendants’ motion to dismiss plaintiff’s securities law claims and granted defendants’ motion to dismiss plaintiff’s negligent misrepresentation claims. On June 19, 2012, the district court granted defendants’ motion to certify an interlocutory appeal to the United States Court of Appeals for the Second Circuit from the court’s statutes of repose and limitations rulings.

On May 15, 2012, Woori Bank filed a complaint in the United States District Court for the Southern District of New York against Citigroup alleging actionable misstatements and omissions in connection with Woori Bank’s $95 million investment in five collateralized debt obligations.

On May 18, 2012, the Federal Deposit Insurance Corporation filed (“FDIC”) complaints in the United States District Courts for the Southern District of New York and the Central District of California against various defendants, including Citigroup Global Markets Inc., Citicorp Mortgage Securities Inc., and CitiMortgage Inc., in connection with purchases of residential mortgage-backed securities (“RMBS”) by two failed banks for which the FDIC is acting as receiver.

On June 6, 2012, the court granted in part and denied in part defendants’ motions to dismiss in WESTERN & SOUTHERN LIFE INS. CO., ET AL. v. RESIDENTIAL FUNDING CO., LLC, ET AL.

On June 26, 2012, the court overruled defendants’ demurrer to plaintiff’s amended complaint in FEDERAL HOME LOAN BANK OF CHICAGO v. BANC OF AMERICA SECURITIES, LLC, ET AL.

On July 27, 2012, John Hancock Life Insurance Co. and several affiliated entities filed a complaint in the United States District Court for the District of Minnesota against various defendants, including CGM, asserting disclosure claims arising out of purchases of RMBS.

On August 29, 2012, the United States District Court for the Southern District of New York issued an order preliminarily approving the parties’ settlement in IN RE CITIGROUP INC. SECURITIES LITIGATION, pursuant to which Citigroup has agreed to pay $590 million. A fairness hearing is scheduled for January 15, 2013.

On August 30, 2012, Rentokil-Initial Pension Scheme filed a putative class action complaint against Citigroup on behalf of purchasers of 26 Citigroup offerings of medium term Euro Notes issued between October 12, 2005 and February 25, 2009. The complaint asserts claims under Section 90 of the Financial Services and Markets Act 2000 and includes allegations similar to those asserted in IN RE CITIGROUP INC. BOND LITIGATION.

On October 15, 2012, the United States District Court for the Southern District of New York granted lead plaintiffs’ amended motion for class certification in NEW JERSEY CARPENTERS HEALTH FUND v. RESIDENTIAL CAPITAL LLC, ET AL., having previously denied lead plaintiffs’ motion for class certification on January 18, 2011. Plaintiffs in this action allege violations of Sections 11, 12, and 15 of the Securities Act of 1933, as amended, and assert disclosure claims on behalf of a putative class of purchasers of mortgage-backed securities issued by Residential Accredited Loans, Inc. pursuant or traceable to prospectus materials filed on March 3, 2006 and April 3, 2007. CGM is one of the underwriter defendants.

Other Matters

Citigroup and Citibank, N.A., along with other U.S. Dollar (USD) LIBOR panel banks, are defendants in the multidistrict litigation (MDL) proceeding before Judge Buchwald in the United States District Court for the Southern District of New York captioned IN RE LIBOR-BASED FINANCIAL INSTRUMENTS ANTITRUST LITIGATION. Judge Buchwald has appointed interim lead class counsel for, and consolidated amended complaints have been filed on behalf of, three separate putative classes of plaintiffs: (1) OTC purchasers of derivative instruments tied to USD LIBOR; (2) purchasers of exchange-traded derivative instruments tied to USD LIBOR; and (3) indirect OTC purchasers of U.S. debt securities. Each of these putative classes alleges that the panel bank defendants conspired to suppress USD LIBOR in violation of the Sherman Act and/or the Commodity Exchange Act, thereby causing plaintiffs to suffer losses on the instruments they purchased. Also consolidated into the MDL proceeding are individual civil actions commenced by various Charles Schwab entities that allege that the panel bank defendants conspired to suppress the USD LIBOR rates in violation of the Sherman Act, the Racketeer Influenced and Corrupt Organizations Act, and California state law, causing the Schwab entities to suffer losses on USD LIBOR-linked financial instruments that they owned. Plaintiffs in these actions seek compensatory damages and restitution for losses caused by the alleged violations, as well as treble damages under the Sherman Act. The Schwab and OTC plaintiffs also seek injunctive relief.

In the course of its business, CGM, as a major futures commission merchant and broker-dealer, is a party to various civil actions, claims and routine regulatory investigations and proceedings that the General Partner believes do not have a material effect on the business of CGM. CGM may establish reserves from time to time in connections with such actions. Additional lawsuits containing claims similar to those described above may be filed in the future.

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Item 1A.   Risk Factors

There have been no material changes to the risk factors set forth under Part 1, Item 1A. “Risk Factors” in the Partnership’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011 and under Part II, Item 1A. “Risk Factors” in the Partnership’s Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, other than as set forth below.

Speculative position and trading limits may reduce profitability.

The CFTC and U.S. exchanges have established speculative position limits on the maximum net long or net short positions which any person may hold or control in particular futures and options on futures. The trading instructions of an advisor may have to be modified, and positions held by the Partnership may have to be liquidated in order to avoid exceeding these limits. Such modification or liquidation could adversely affect the operations and profitability of the Partnership by increasing transaction costs to liquidate positions and foregoing potential profits.

In October 2011, the CFTC adopted new rules governing position limits. In September 2012, these rules were vacated by the United States District Court for the District of Columbia and remanded to the CFTC for further consideration. It is possible, nevertheless, that these rules may take effect in some form via re-promulgation or a successful appeal by the CFTC of the District Court’s ruling. The vacated rules established position limits on certain futures contracts and any economically equivalent futures, options and swaps.

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Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

For the three months ended September 30, 2012, there were additional subscriptions of 438.3277 Redeemable Units totaling $613,500. The Redeemable Units were issued in reliance upon applicable exemptions from registration under Section 4(2) of the Securities Act of 1933, as amended, and Section 506 of Regulation D promulgated thereunder. The Redeemable Units were purchased by accredited investors as defined in Regulation D. In determining the applicability of the exemption, the General Partner relied on the fact that the Redeemable Units were purchased by accredited investors in a private offering.

Proceeds of net offering were used for the trading of commodity interests, including futures contracts, options, forward and swap contracts.

The following chart sets forth the purchases of Redeemable Units by the Partnership.

Period	(a) Total Number of Redeemable Units Purchased*		(b) Average Price Paid per Redeemable Unit**		(c) Total Number of Redeemable Units Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Redeemable Units that May Yet Be Purchased Under the Plans or Programs
July 1, 2012 - July 31, 2012		208.0810	$	1,425.84		N/A		N/A
August 1, 2012 - August 31, 2012		3,453.4040	$	1,393.30		N/A		N/A
September 1, 2012 - September 30, 2012		93.4070	$	1,394.96		N/A		N/A
		3,754.8920	$	1,395.14

* Generally, limited partners are permitted to redeem their Redeemable Units as of the end of each month on three business days’ notice to the General Partner. Under certain circumstances, the General Partner can compel redemption, although to date the General Partner has not exercised this right. Purchases of Redeemable Units by the Partnership reflected in the chart above were made in the ordinary course of the Partnership’s business in connection with effecting redemptions for limited partners.

** Redemptions of Redeemable Units are effected as of the last day of each month at the net asset value per Redeemable Unit as of that day.

Item 3.   Defaults Upon Senior Securities – None.

Item 4.   Mine Safety Disclosures – None.

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Item 5.   Other Information

The registrant does not have a board of directors. The registrant’s general partner, Ceres Managed Futures LLC (“CMF”), is managed by a board of directors.

Effective November 14, 2012, Mr. Damian George was appointed a director of CMF.

Damian George, age 45, has been a Director of the general partner since November 2012. Since June 2012, Mr. George has been the Chief Financial Officer and a principal of the general partner and is an associate member of the National Futures Association. Since August 2009, Mr. George has been employed by Morgan Stanley Smith Barney LLC (“Morgan Stanley Smith Barney”), a financial services firm, where his responsibilities include oversight of budgeting, finance and Sarbanes-Oxley testing for the Alternative Investments–Managed Futures group. Since August 2009, Mr. George has been registered as an associated person of Morgan Stanley Smith Barney. From November 2005 through July 2009, Mr. George was employed by Citi Alternative Investments, a division of Citigroup Inc. (“Citigroup”), a financial services firm, which administered Citigroup’s hedge fund and fund of funds business, where he served as Director and was responsible for budgeting, finance and Sarbanes-Oxley testing for the Hedge Fund Management group. From November 2004 through July 2009, Mr. George was registered as an associated person of Citigroup Global Markets Inc. Mr. George earned his Bachelor of Science degree in Accounting in May 1989 from Fordham University and his Master of Business Administration degree in International Finance in February 1998 from Fordham University. Mr. George is a Certified Public Accountant.

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Item 6. Exhibits

3.1	Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated March 13, 1997 (filed as Exhibit 3.1 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(a)	Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated February 26, 1999 (filed as Exhibit 3.4 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(b)	Certificate of Change of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, effective January 31, 2000 (filed as Exhibit 3.3 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(c)	Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated April 1, 2001 (filed as Exhibit 3.2 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(d)	Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated April 21, 2003 (filed as Exhibit 3.5 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(e)	Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated September 21, 2005 (filed as Exhibit 3.1(e) to the Form 10-Q filed on November 16, 2009 and incorporated herein by reference).
(f)	Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated September 19, 2008 (filed as Exhibit 3.1(f) to the Form 10-Q filed on November 16, 2009 and incorporated herein by reference).
(g)	Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated September 28, 2009 (filed as Exhibit 99.1 to the Form 8-K filed on September 30, 2009 and incorporated herein by reference).
(h)	Certificate of Amendment of the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated June 29, 2010 (filed as Exhibit 3.1(h) to the Form 8-K filed on June 30, 2010 and incorporated herein by reference).
(i)	Certificate of Amendment to the Certificate of Limited Partnership as filed in the office of the Secretary of State of the State of New York, dated September 2, 2011 (filed as Exhibit 3.1 to the Form 8-K filed on September 7, 2011 and incorporated herein by reference).
3.2	Third Amended and Restated Limited Partnership Agreement, dated February 22, 2010 (filed as Exhibit 3.1 to the Current Report on Form 8-K filed on February 25, 2010 and incorporated herein by reference).
10.1	Form of Subscription Agreement (filed herein).
10.2	Second Amended and Restated Customer Agreement between the Partnership and Salomon Smith Barney Inc., dated April 1, 2001 (filed as Exhibit 10.2 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
10.3	Second Amended and Restated Agency Agreement among the Partnership, the General Partner, CGM and Morgan Stanley Smith Barney LLC, dated July 29, 2010 (filed as Exhibit 10.3 to the Form 8-K filed on August 3, 2010 and incorporated herein by reference).
10.4	Joinder Agreement among the Partnership, the General Partner, CGM and Morgan Stanley Smith Barney LLC, dated June 1, 2009 (filed as Exhibit 10 to the Form 10-Q filed on August 14, 2009 and incorporated herein by reference).
10.5	Escrow Agreement among the Partnership, Smith Barney Futures Management Inc., Smith Barney Inc. and European American Bank, dated April 15, 1997 (filed as Exhibit 10.5 to the Form 10-Q filed on November 16, 2009 and incorporated herein by reference).

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10.6	Management Agreement among the Partnership, Smith Barney Futures Management Inc. and Campbell & Company, Inc., dated April 1, 1997 (filed as Exhibit 10.1 to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(a)	First Amendment to the Management Agreement among the Partnership, Smith Barney Futures Management Inc., Campbell & Company, Inc. and SFG Global Investments, Inc., dated March 1, 1999 (filed as Exhibit 10.1(a) to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(b)	Second Amendment to the Management Agreement among the Partnership, Smith Barney Futures Management LLC and Campbell & Company, Inc., dated April 1, 2001 (filed as Exhibit 10.1(b) to the General Form for Registration of Securities on Form 10 filed on April 30, 2004 and incorporated herein by reference).
(c)	Letter extending Management Agreement between the General Partner and Campbell & Company, Inc. for 2011, dated June 1, 2011 (filed as Exhibit 10.6(c) to the Form 10-K filed on March 30, 2012 and incorporated herein by reference).
31.1	Rule 13a-14(a)/15d-14(a) Certification (Certification of President and Director).
31.2	Rule 13a-14(a)/15d-14(a) Certification (Certification of Chief Financial Officer and Director).
32.1	Section 1350 Certification (Certification of President and Director).
32.2	Section 1350 Certification (Certification of Chief Financial Officer and Director).
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

33

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

POTOMAC FUTURES FUND L.P.
By:	Ceres Managed Futures LLC (General Partner)
By:	/s/ Walter Davis Walter Davis President and Director
Date: November 14, 2012
By:	/s/ Damian George Damian George Chief Financial Officer and Director (Principal Accounting Officer)
Date: November 14, 2012

34

EX-10.1

Exhibit 10.1

POTOMAC FUTURES FUND L.P.

SUBSCRIPTION/EXCHANGE AGREEMENT

To accompany the Private Placement Offering Memorandum and Disclosure Document dated May 1, 2012.

NOT FOR USE AFTER FEBRUARY 1, 2013.

Morgan Stanley Smith Barney Account Full Name of Account

CASH SUBSCRIPTIONS Note: only use this section for cash purchases or adding cash to an exchange subscription to meet the minimum

Partnership	Minimum Subscription Amounts $25,000; $10,000 for ERISA/IRA investors $10,000 for additional subscriptions (all accounts)
Potomac Futures Fund L.P.	$	____________________________

EXCHANGE SUBSCRIPTIONS (AVAILABLE FOR TRAIL OPTION ONLY)

Fund name and/or security number(s) for commodity pool(s) from which units are to be redeemed to exchange	ALL MINIMUMS APPLY Check Box to specify entire interest or quantity of units to be redeemed to exchange
_____________________	¨       Entire Interest* or                      Units
_____________________	¨       Entire Interest* or                      Units
_____________________	¨       Entire Interest* or                      Units

* Please note that Legacy Smith Barney FAs must still enter redemption ticket(s) as well as the IOI for the subscription amount. Please OVER ESTIMATE when dropping the IOI to avoid having to re-enter. Managed Futures will process on the 1^st day of the month and will only be able to lower the IOI amount to process the subscription for the estimated redemption amount plus any cash additions.

This Subscription/Exchange Agreement must be received by the General Partner no later than 3 business days prior to calendar month-end to be included in the current close. Enter Subscription/Exchange order before sending Agreement to the below address. Client(s) signature MUST be original and therefore can not be faxed or scanned to the General Partner. Account will be debited upon receipt of this Agreement by the General Partner.

For Branch Use: FA/PWA Payment Type: Check one:              (Trail)              (Upfront)

Mail completed Subscription Agreement to: Ceres Managed Futures LLC 522 Fifth Ave, 14th Fl New York, New York 10036 (212) 296-1999

Financial Advisor/Private Wealth Advisor Name Employee ID/FA/PW Number FA/PW Advisor’s Telephone No.

Client Service Associate Name Client Service Associate Telephone No.

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By executing the signature page of this Subscription Agreement and Power of Attorney (the “Agreement”), you (for yourself and any co-subscriber, and, if you are signing on behalf of an entity, on behalf of and with respect to that entity and its shareholders, partners, beneficiaries or members), represent and warrant to Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC, Ceres Managed Futures LLC (the “General Partner”) and Potomac Futures Fund L.P. (the “Partnership”), as follows (as used below, the terms “you” and “your” refer to you and your co-subscriber, if any, or if you are signing on behalf of an entity, such entity). You understand that Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC, the General Partner, and the Partnership will rely upon all of your statements and representations in this Agreement in deciding whether to allow you to invest in the Partnership.

(1) You have received and carefully read, understand and agree to abide by the terms of investment as described in the Private Placement Memorandum and Disclosure Document dated May 1, 2012 (the “Memorandum”) and the limited partnership agreement (the “Limited Partnership Agreement”) including any supplements and exhibits thereto, relating to and describing the terms and conditions of the private placement of units of limited partnership interest (the “Units”). You hereby acknowledge that no person is authorized to give any information or to make any statement not contained in the Memorandum or the Limited Partnership Agreement, and that any information or statement not contained in the Memorandum or the Limited Partnership Agreement must not be relied upon as having been authorized by the Partnership. You represent that an investment in the Partnership in the amount subscribed, despite its substantial risk, is suitable and appropriate for you given your investment objectives, risk tolerance, other holdings, and financial situation and needs, and you understand that an investment in the Partnership is speculative and may result in the complete loss of your investment. You have carefully reviewed and understand the various risks of an investment in the Partnership, including those summarized under “Risk Factors” and “Conflicts of Interest” in the Memorandum.

(2) You understand that the General Partner intends to restrict investment in the Partnership to purchasers who are “accredited investors” as defined in Regulation D of the Securities Act of 1933, as amended (the “Securities Act”). You hereby represent that you are an “accredited investor” because you satisfy one or more of the following categories of “accredited investor:”

INDIVIDUAL INVESTORS

Please check ALL applicable boxes below.

¨ I have a net worth (or joint net worth together with my spouse) in excess of $1,000,000. I understand that the term “net worth” means the excess of total assets at fair market value, excluding the value of my primary residence, over total liabilities. In calculating net worth, I have not included as a liability any indebtedness that is secured by my primary residence other than the amount of such indebtedness in excess of (i) the amount outstanding 61 days ago, unless incurred as a result of the acquisition of such residence, or (ii) the estimated fair market value of such residence (whichever excess amount of indebtedness is greater).

¨ I have had an annual income during the last two full calendar years of in excess of $200,000 (or joint income together with my spouse of in excess of $300,000) and reasonably expect to have an annual income in excess of $200,000 (or joint income together with my spouse of in excess of $300,000) during the current calendar year.

INVESTORS OTHER THAN INDIVIDUALS INCLUDING TRUSTS, CORPORATIONS OR PARTNERSHIPS

Please check ALL applicable boxes below.

¨ Any bank as defined in Section 3(a)(2) of the Securities Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary capacity.

¨ Any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; any insurance company as defined in Section 2(13) of the Securities Act.

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¨ Any investment company registered under the Investment Company Act of 1940, as amended, or a business development company as defined in Section 2(a)(48) of that Act.

¨ Any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment Act of 1958.

¨ Any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions for the benefit of its employees, if such plan has total assets in excess of $5,000,000.

¨ An employee benefit plan within the meaning of Title I of ERISA, if the investment decision is made by a plan fiduciary, as defined in Section 3(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors.

¨ Any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.

¨ Any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the Units, with total assets in excess of $5,000,000.

¨ Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the Units whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) under Regulation D.

¨ Any trust that is an accredited investor because it is a revocable trust which may be amended or revoked at any time by the grantors thereof and all of the grantors are accredited investors.

¨ Any entity in which all of the equity owners are accredited investors.

(3) You are acquiring the Units for your own account, as principal, for investment and not with a view to the resale or distribution of all or any part of such Units.

(4) Units were not offered to you by means of any general solicitation or general advertising by the General Partner or any person acting on its behalf, including without limitation (a) any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or (b) any seminar or meeting to which you were invited by any general solicitation or general advertising.

(5) (i) You have a net worth alone or with your spouse exceeding ten (10) times your investment; (ii) you have either the capacity to protect your interests in connection with this transaction; or (iii) you are able to bear the economic risk of the investment.

(6) You are of legal age to execute this Agreement and are legally competent and authorized to make this investment.

(7) You represent that you are a U.S. resident or a U.S. citizen. If you are not a U.S. resident or U.S. citizen, you agree to pay or reimburse Morgan Stanley Smith Barney LLC (the “Selling Agent”) or the Partnership for any taxes, including but not limited to withholding tax imposed with respect to your Units.

(8) Unless representation (9) below is applicable, your subscription is made with your funds for your own account and not as trustee, custodian or nominee for another.

(9) If you are subscribing as custodian for a minor, either (a) the subscription is a gift you have made to that minor and is not made with that minor’s funds, in which case the representation in number (2) above applies only to you, as the custodian; or (b) if the subscription is not a gift, the representation in number (2) above applies only to that minor.

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(10) If you are subscribing in a representative capacity, you have full power and authority to make this investment and enter into and be bound by this Agreement on behalf of the entity for which you are purchasing the Units, and that entity has full right and power to purchase the Units and enter into and be bound by this Agreement and become a limited partner pursuant to the Limited Partnership Agreement, and has been duly organized and is validly existing and is in good standing in the jurisdiction of its formation. In your representative capacity, you have determined that an investment by either the represented beneficiary or beneficial owner in the Partnership (i) is consistent with the investment objectives, (ii) is in the best interests of, and (iii) is within the risk tolerance of such investor’s investment in the Partnership. You have also satisfied any additional due diligence obligation you may have to your beneficiaries or beneficial owners.

(11) If you are subscribing for a joint or community property account, you have full power and authority to purchase Units and enter into and be bound by this Agreement on behalf of the joint or community property account.

(12) You either: (a) are not required to be registered with the Commodity Futures Trading Commission (“CFTC”) or to be a member of the National Futures Association (“NFA”); or (b) if so required, you are duly registered with the CFTC and are a member in good standing of the NFA. It is an NFA requirement that the General Partner attempt to verify that any person or entity that seeks to purchase Units be duly registered with the CFTC and a member of the NFA, if required. You agree to supply the General Partner with such information as the General Partner may reasonably request in order to attempt such verification. Certain entities that invest in the Partnership may, as a result, themselves become “commodity pools” within the intent of applicable CFTC and NFA rules, and their sponsors, accordingly, may be required to register as “commodity pool operators.”

(13) You have carefully reviewed and understand the fees and expenses that are directly and indirectly assessed on the Partnership.

(14) You understand that the General Partner is an affiliate of Citigroup Global Markets Inc., which will serve as a selling agent and commodity broker for the Partnership and may, along with its affiliates, serve as an FX counterparty for the Partnership, and Morgan Stanley Smith Barney LLC, which will also serve as the selling agent for the Partnership. You further understand that the Partnership is subject to conflicts of interest as discussed in the “Conflicts of Interest” section in the Memorandum. You also understand that Citigroup Global Markets Inc. credits up to 86% of the brokerage fees to financial advisors who sell Units in the Partnership and the prospect of receiving these fees may provide the General Partner (including its affiliates), the Selling Agent and your Morgan Stanley Smith Barney LLC financial advisor or private wealth advisor with interests that potentially conflict with your own in respect of your investment in the Partnership. You consent to such conflicts and you covenant not to object to or bring any proceedings against any of the foregoing relating to any such conflicts of interest, provided that Citigroup Global Markets Inc. and the relevant Morgan Stanley (including Morgan Stanley Smith Barney LLC) parties comply with the appropriate standard of liability as set forth in the Limited Partnership Agreement or any other relevant controlling agreement.

(15) You understand that the Units are illiquid and have not been registered under the Securities Act, or any similar state law, and cannot be transferred, sold, pledged or assigned except in certain limited circumstances, and with the consent of the General Partner, as set forth in the Limited Partnership Agreement. You understand that the Partnership has no intention or obligation to register the Units under the Securities Act.

(16) You have such knowledge and experience in financial and business matters that you are capable of evaluating the merits and risks of an investment in the Partnership and are able to make an informed investment decision. You are not relying on the General Partner, Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC, or any of their affiliates with respect to any legal, tax, or economic considerations relating to your investment decision, and you further understand that the only disclosures for which the Partnership, the General Partner, Citigroup Global Markets, Morgan Stanley & Co. LLC, Morgan Stanley Smith Barney LLC, or any affiliates, as applicable, accepts any responsibility relating to your investment are those set forth in the Memorandum and the Limited Partnership Agreement.

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(17) You agree that neither the Partnership, the General Partner, Citigroup Global Markets Inc., Morgan Stanley Smith Barney LLC, nor their respective affiliates, nor their respective managers, officers, directors, members, equity holders, employees or other applicable representatives (collectively, “Affiliated Persons”), shall incur any liability (a) in respect of any action taken upon any information provided to the Partnership, the General Partner, Citigroup Global Markets Inc., Morgan Stanley Smith Barney LLC, or their Affiliated Persons by you or for relying on any notice, consent, request, instructions or other instrument believed, in good faith, to be genuine or to be signed by properly authorized persons on your behalf, including any document transmitted in a manner consistent with the Notice section herein, or (b) for adhering to applicable anti-money laundering obligations whether now or hereinafter in effect.

(18) You agree to indemnify and hold harmless the Partnership, the General Partner, Citigroup Global Markets Inc., Morgan Stanley Smith Barney LLC, and their Affiliated Persons from and against any and all direct and consequential losses, damages, liabilities, costs or expenses (including reasonable attorneys’ and accountants’ fees and disbursements) whether incurred in an action between the parties hereto or otherwise or resulting from any unsuccessful proceeding or other action brought by you against any of the foregoing relating to the Partnership or the offering of the Units (collectively, “Losses”) which the Partnership, the General Partner, Citigroup Global Markets Inc., Morgan Stanley Smith Barney LLC, and their Affiliated Persons, or any one of them, may incur by reason of or in connection with this Agreement, including any misrepresentation made by you or any of your agents, any breach of any declaration, representation or warranty by you, the failure by you to fulfill any covenant or agreements under this Agreement, our reliance on facsimile, electronic copy or other instructions, or the assertions of your lack of proper authorization from any beneficial owners to execute and perform the obligations under this Agreement. You also agree that you will indemnify and hold harmless the Partnership, the General Partner, Citigroup Global Markets Inc., Morgan Stanley Smith Barney LLC, and their Affiliated Persons, or any one of them, for any Losses they may incur in connection with your failure to comply with any applicable law, rule or regulation (including anti-money laundering laws and regulations) having application to the Partnership, the General Partner, Citigroup Global Markets Inc., Morgan Stanley Smith Barney LLC, or their Affiliated Persons.

(19) You hereby represent and agree that the name, address, and ownership capacity on the Morgan Stanley Smith Barney LLC account referenced on this Agreement are your true and correct name, address, and ownership capacity, that the name, address, and ownership capacity on the Partnership’s books and records shall be the same as your name, address, and ownership capacity on such account, and that you will promptly notify Morgan Stanley Smith Barney LLC of any change in your address, which change shall also be effective for all Partnership purposes. You also agree to promptly notify us if any representation, warranty or statement in this Agreement becomes incomplete, untrue or inaccurate.

(20) All the representations, warranties and information that you have provided in this Agreement and that you provided upfront during the initial intake process are correct and complete as of the date of this Agreement, and, if there should be any material change in such information you provided either in this Agreement or during the initial intake process prior to or after your admission as a limited partner, you will immediately furnish such revised or corrected information to your Morgan Stanley Smith Barney LLC financial advisor or private wealth advisor. You acknowledge that the Partnership, the General Partner, Citigroup Global Markets Inc., Morgan Stanley Smith Barney LLC, and their Affiliated Persons will rely on such information, representations and warranties on an ongoing basis.

Additional Representations and Warranties regarding Anti-money Laundering:

(21) During the intake process, you previously made certain representations and warranties that your subscription is in compliance with the applicable anti-money laundering laws and regulations as of such time and that there have been no material developments to make such representations and warranties false. Additionally, you represent and warrant that: you are not (a) a “Prohibited Investor” which includes: (i) an individual, entity or organization that is named on the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) List of Specially Designated Nationals and Blocked Persons (the “SDN List”), or that is located in, organized under the laws of, a citizen or resident of, or the government of a country or territory that is subject to U.S. trade or economic sanctions administered by OFAC; (ii) a foreign shell bank; and (iii) a person or entity resident in or whose

B-5

subscription funds are transferred from or through a jurisdiction identified as non-cooperative by the Financial Action Task Force (“FATF”);¹ (b) a senior foreign political figure,² an immediate family member of a senior foreign political figure,³ or a close associate of a senior foreign political figure⁴ within the meaning of the USA Patriot Act of 2001.⁵ You also represent and warrant that, to the best of your knowledge and belief, after appropriate due diligence, none of (a) each person controlling or controlled by you; (b) if you are a privately held entity, each person holding a senior management position or any beneficial equity interest in you; nor (c) any person for whom you are acting as agent, representative, or nominee in connection with this investment, is named on the SDN List or is otherwise subject to U.S. trade or economic sanctions administered by OFAC.

You acknowledge that due to money laundering requirements within their respective jurisdictions, the Partnership and the General Partner (and/or the administrator, if applicable) acting on behalf of the Partnership may require further identification of the Subscriber and the source of payment before this Agreement can be processed.

You acknowledge that if, following the date of acceptance of your subscription, the General Partner (or administrator, if applicable) reasonably believes that you are or have become a “Prohibited Investor,” or have otherwise breached the representations and warranties herein as to identity, the Partnership may be obliged to freeze your investment, require you to immediately withdraw your investment, or take such other action as the Partnership considers necessary or required in accordance with applicable regulations.

Additional Representations and Warranties of Investor:

(22) You represent and warrant that, except as you may disclose in writing to the General Partner, you are not subject to the Freedom of Information Act or any similar state, county or municipal legislation or regulation under which you are or may be compelled to disclose to the public any information regarding your investment in the Partnership or the commodity trading advisor.

(23) You represent that the Form W-9 that you previously completed and returned to your Morgan Stanley Smith Barney LLC financial advisor or private wealth advisor remains current as of the date of this Agreement, and, if there should be any material change in such information prior to or after your admission as a limited partner, you will immediately furnish a revised Form W-9 to your Morgan Stanley Smith Barney LLC financial advisor or private wealth advisor.

(24) You agree that the representations and warranties in this Agreement may be used as a defense in any actions relating to the Partnership or the offering of the Units, and that it is only on the basis of such representations and warranties that the General Partner and the Selling Agent may be willing to accept your subscription for Units.

Additional Representation and Warranty for Exchange Subscribers:

(25) You are the true, lawful, and beneficial owner of the Units (or fractions thereof) to be redeemed pursuant to this Agreement, with full power and authority to request redemption and make a subsequent investment in the Partnership. The Units (or fractions thereof) which you are redeeming are not subject to any pledge or are otherwise encumbered in any fashion.

¹  The current list of FATF member countries and territories may be found at http://www.fatf-gafi.org.

²  A “senior foreign political figure” is defined as a current or former senior official in the executive, legislative, administrative, military or judicial branches of a foreign government (whether elected or not), a current or former senior official of a major foreign political party, or a current or former senior executive of a foreign government-owned corporation. In addition, a “senior foreign political figure” includes any corporation, business or other entity that has been formed by, or for the benefit of, a senior foreign political figure.

³  “Immediate family” of a senior foreign political figure typically includes the figure’s parents, siblings, spouse, children and in-laws.

⁴  A “close associate” of a senior foreign political figure is a person who is widely and publicly known to maintain an unusually close relationship with the senior foreign political figure, and includes a person who is in a position to conduct substantial domestic and international financial transactions on behalf of a senior foreign political figure.

⁵  The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56 (2001).

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Additional Representations and Warranties for Employee Benefit Plan and IRA Investors:

(26) If you are a “Benefit Plan Investor” (within the meaning of Section 3(42) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)), you are a fiduciary (within the meaning of ERISA) with respect to the subscriber and you are responsible for purchasing the Units, and such purchase is in accordance with ERISA requirements and will not constitute a prohibited transaction under ERISA or the Internal Revenue Code of 1986, as amended (the “Code”). The term “Benefit Plan Investor” means (a) an employee benefit plan subject to the provisions of Part 4 of Title I of ERISA, (b) a plan or individual retirement account subject to Section 4975(e)(1) of the Code, or (c) an entity whose underlying assets are deemed to include ERISA plan assets by reason of investment in such entity by investors described in clauses (a) and/or (b). You are not a participant-directed defined contribution plan. You understand that the General Partner in its sole discretion may limit investments in the Partnership so that less than 25% of the Units of the Partnership are owned by Benefit Plan Investors, and the General Partner may require a Benefit Plan Investor to redeem its interest in the Partnership if such 25% limit would be exceeded.

(27) If you are a Benefit Plan Investor, you also represent that either (a) or (b) as follows is true:

(a) neither the General Partner nor any of its affiliates (i) manages any part of your investment portfolio on a discretionary basis, (ii) regularly gives investment advice for a fee with respect to your assets, or (iii) has an agreement or understanding, written or unwritten, with you under which you receive information, recommendations or advice concerning investments that are used as a primary basis for your decisions, or under which you receive individualized investment advice concerning your assets; or

(b) you are independent of the General Partner, have studied the Memorandum and have made an independent decision to make the investment solely on the basis of such Memorandum and without reliance on any other information or statements as to the appropriateness of the investment, and neither the General Partner nor its employees or affiliates: (i) has exercised any investment discretion or control with respect to your investment; (ii) has authority, responsibility to give, or has given individualized investment advice with respect to your investment; or (iii) is the employer maintaining or contributing to you.

(28) If you are a Benefit Plan Investor, you also represent that both (a) and (b) as follows are true:

(a) the plan’s investment in the Partnership does not violate and is not otherwise inconsistent with the terms of any legal document constituting the plan or any trust agreement thereunder; and

(b) the subscriber will, at the request of the Partnership, furnish the Partnership with such information as the Partnership may reasonably require to establish that the purchase of the Units by the plan does not violate any provision of ERISA or the Code, including without limitation, those provisions relating to “prohibited transactions” by “parties in interest” or “disqualified persons” as defined therein.

(29) If you are a benefit plan or retirement account that is not a “Benefit Plan Investor” as defined in number (26) above, such as a governmental plan, a non-U.S. benefit plan, or a church plan that is not subject to ERISA, this investment is in accordance with legal requirements applicable to you.

ACCEPTANCE OF THE LIMITED PARTNERSHIP AGREEMENT

You agree that as of the date that your name is entered on the books of the Partnership, you shall become a limited partner of the Partnership. You also agree to each and every term of the Limited Partnership Agreement of the Partnership as if you signed that Limited Partnership Agreement. You further agree that you will not be issued a certificate evidencing the Units that you are purchasing, but that you will receive a confirmation of purchase in Morgan Stanley Smith Barney LLC’s customary form.

B-7

POWER OF ATTORNEY AND GOVERNING LAW

You hereby irrevocably constitute and appoint Ceres Managed Futures LLC, the general partner of the Partnership (in addition to and not by way of limitation of the Power of Attorney included in the Limited Partnership Agreement), as your true and lawful Attorney-in-Fact, with full power of substitution, in your name, place, and stead: (1) to do all things necessary to admit you as a limited partner of the Partnership; (2) to admit others as additional or substituted limited partners to the Partnership so long as such admission is in accordance with the terms of the Limited Partnership Agreement or any amendment thereto; (3) to file, prosecute, defend, settle, or compromise any and all actions at law or suits in equity for or on behalf of the Partnership in connection with any claim, demand, or liability asserted or threatened by or against the Partnership; and (4) to execute, acknowledge, swear to, deliver, file, and record on your behalf and, as necessary, in the appropriate public offices, and publish: (a) the Limited Partnership Agreement and certificate of limited partnership and all amendments thereto permitted by the terms thereof; (b) all instruments that the General Partner deems necessary or appropriate to reflect any amendment, change, or modification of the Limited Partnership Agreement or the certificate of limited partnership made in accordance with the terms of the Limited Partnership Agreement; (c) certificates of assumed name; and (d) all instruments that the General Partner deems necessary or appropriate to qualify or maintain the qualification of the Partnership to do business as a foreign limited partnership in other jurisdictions. You agree to be bound by any representation made by the General Partner or any successor thereto acting in good faith pursuant to this power of attorney.

The power of attorney granted hereby shall be deemed to be coupled with an interest and shall be irrevocable and survive your death, incapacity, dissolution, liquidation, or termination.

The validity and construction of this Agreement is governed by, and construed in accordance with, the laws of the State of New York (without regard to its choice of law principles); provided, however, that causes of action for violations of federal or state securities laws shall not be governed by this Agreement.

ANY ACTION OR PROCEEDING RELATING IN ANY RESPECT TO THIS AGREEMENT, THE OPERATION OF THE PARTNERSHIP OR THE OFFERING OF THE UNITS AGAINST YOU, THE PARTNERSHIP OR THE GENERAL PARTNER MAY BE BROUGHT AND ENFORCED IN THE COURTS OF THE CITY, COUNTY, AND STATE OF NEW YORK OR (TO THE EXTENT SUBJECT MATTER JURISDICTION EXISTS THEREFORE) IN THE COURTS OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND YOU, THE GENERAL PARTNER AND THE PARTNERSHIP IRREVOCABLY SUBMIT TO THE JURISDICTION OF BOTH SUCH STATE AND FEDERAL COURTS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. YOU, THE GENERAL PARTNER AND THE PARTNERSHIP IRREVOCABLY WAIVES ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO LAYING THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN THE COURTS OF THE CITY, COUNTY, AND STATE OF NEW YORK OR IN THE COURTS OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK AND ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

YOU HEREBY IRREVOCABLY WAIVE ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY CLAIM AGAINST THE PARTNERSHIP AND THE GENERAL PARTNER RELATING IN ANY RESPECT TO THIS AGREEMENT, THE OPERATION OF THE PARTNERSHIP AND THE OFFERING OF THE UNITS.

YOU HEREBY AGREE THAT SERVICE OF PROCESS MAY BE EFFECTED IN THE SAME MANNER AS NOTICES ARE GIVEN PURSUANT TO THE NOTICE SECTION BELOW.

MISCELLANEOUS

Equitable Relief. You agree that the Partnership, the General Partner and their affiliates would be subject to potentially irreparable injury as a result of any breach by you of any of the representations, warranties, acknowledgements, covenants, or agreements set forth in this Agreement, and that monetary damages would not be sufficient to compensate or make whole the Partnership, the General Partner and their affiliates for any such breach. Accordingly, you agree that the Partnership and the General Partner, separately or together, shall be entitled to equitable and injunctive relief, on an emergency, temporary, preliminary, and/or permanent basis, so as to prevent any such breach or the continuation thereof.

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Survival; Legal Effect.

(i) You agree that the representations, warranties, agreements, and covenants set forth in this Agreement shall, in pertinent part, survive the acceptance (or rejection) of this Agreement, and any subsequent withdrawal from the Partnership by you.

(ii) This Agreement shall be binding upon you to the extent set forth herein prior to acceptance of you as a limited partner and, if accepted, on you and the General Partner, its affiliates, and shall inure to the benefit of you, the General Partner, its affiliates and the Partnership.

Severability. In the event that any provision of this Agreement is held to be invalid or unenforceable in any jurisdiction, such provision shall be deemed modified to the minimum extent necessary so that such provision, as so modified, shall no longer be held to be invalid or unenforceable. Any such modification, invalidity, or unenforceability shall be strictly limited both to such provision and to such jurisdiction, and in each case to no other. Furthermore, in the event of any such modification, invalidity, or unenforceability, this Agreement shall be interpreted so as to achieve the intent expressed herein to the greatest extent possible in the jurisdiction in question and otherwise as set forth herein.

Counterparts; Facsimiles and Electronic Copies.

(i) The execution page may be executed in one or more counterparts, together shall constitute the same document. It is the General Partner’s policy to require submission of manually executed copies of this Agreement. In rare occasions, and in the sole discretion of the General Partner, the General Partner may from time-to-time permit facsimiles and/or electronic copies to have the same binding force as originals.

(ii) You agree that the General Partner is authorized to accept and execute the execution page, as well as any instructions given by you, in original signed form or by facsimile or electronic copy. If instructions are given by facsimile or electronic copy, you shall promptly courier the original signed form to the General Partner and shall indemnify the Partnership, the General Partner and their affiliates for any losses and damages suffered by them as a result of acting on faxed or e-mailed instructions rather than instructions in original signed form. You further agree that the Partnership, the General Partner and their affiliates, are entitled to rely conclusively on, and shall incur no liability in respect of any action taken on the basis of, any notice, consent, request, instruction, or other instrument believed in good faith to be genuine or to be signed by properly authorized persons.

Entire Agreement. This Agreement and the Limited Partnership Agreement contain the entire agreement and understanding of the parties hereto relating to the subject matter hereof, and supersede any prior agreements and understandings of the parties relating to such subject matter.

No Waiver.

(i) No failure or delay on the part of the Partnership, the General Partner and their affiliates in exercising any right, power, or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or remedy preclude any other or further exercise thereof or the exercise of any other right, power, or remedy. Failure on the part of the Partnership, the General Partner and their affiliates to challenge any act by you or to declare you in default with respect to the Partnership, the General Partner and their affiliates, irrespective of how long that failure continues, shall not constitute a waiver by the Partnership, the General Partner and their affiliates of their rights with respect to that default until the applicable statute of limitations period has run.

(ii) Any waiver granted by the General Partner with respect to any term of this Agreement hereunder must be in writing, signed by an authorized representative of the General Partner, and shall be valid only in the specific instance in which given.

B-9

Confidentiality.

(i) You understand that the information requested in this Agreement is needed in order to ensure compliance with applicable laws and regulations, including, but not limited to, applicable anti-money laundering laws and regulations. You acknowledge that you will receive or have access to confidential proprietary information concerning the Partnership, including, without limitation, portfolio positions, valuations, information regarding potential investments, financial information, trade secrets and the like (collectively, “Confidential Information”), which is proprietary in nature and non-public. You agree that, except with the prior written consent of the General Partner, you have and you shall at all times keep confidential any Confidential Information to which you have been or shall become privy relating to the business or assets of the Partnership, the General Partner, the commodity trading advisor and their affiliates unless required to be disclosed by law; provided, that before you make any disclosure of Confidential Information required by law, you shall so inform the General Partner and shall give the General Partner, to the greatest extent practicable, an opportunity to contest whether such information is required by law to be disclosed. Furthermore, you have not reproduced, duplicated or delivered (and will not reproduce, duplicate or deliver) the Memorandum or this Agreement and any and all other Partnership related documents to any other person, except your professional advisors or as instructed by the Partnership.

(ii) Notwithstanding anything to the contrary contained herein, you (and each of your employees, agents or other representatives, as applicable) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated herein and all materials of any kind provided by you relating to such tax treatment and tax structure (as such terms are defined in U.S. Treasury Regulation section 1.6011-4).

Notices.

Notice shall be provided in accordance with the Limited Partnership Agreement.

RECEIPT OF DOCUMENTATION

The regulations of the CFTC require that you be given a copy of the Memorandum, as well as additional documentation consisting of: (a) any required supplements or amendments to the Memorandum, and (b) the most current monthly account statement (report) for the Partnership. You hereby acknowledge receipt of the Memorandum and any such additional documentation.

THE SUBSCRIPTION PROCESS

In order to invest in the Partnership, you must (1) date, complete and execute one copy of this Agreement and (2) deliver or mail the Agreement to your Morgan Stanley Smith Barney LLC financial advisor or private wealth advisor at such person’s Morgan Stanley Smith Barney LLC branch office in time for it to be forwarded and received by the General Partner at Morgan Stanley Smith Barney Managed Futures, 522 Fifth Avenue, 14th Floor, New York, New York 10036, no later than 3:00 p.m. New York City time, on the third to last business day of the month. This subscription is not binding on the Partnership unless and until it is accepted by General Partner, The General Partner may accept or reject this subscription in whole or in part for any reason whatsoever.

THIS IS A SPECULATIVE INVESTMENT. YOU COULD LOSE ALL OR SUBSTANTIALLY ALL OF YOUR INVESTMENT.

B-10

SIGNATURE(S) — You MUST sign Either Section A or Section B Below.

By signing below you acknowledge that you have received and carefully read, understand and agree to abide by the terms of investment as described in the Memorandum and the Limited Partnership Agreement, including any supplements and exhibits thereto.

Section A. Please sign here if you are an: INDIVIDUAL or INDIVIDUAL RETIREMENT ACCOUNT.

If you are subscribing for a joint or community property account, the statements, representations, and warranties set forth in this Subscription and Exchange Agreement and Power of Attorney shall be deemed to have been made by each owner of the account. (If the Units will be owned by tenants-in-common, signatures of all owners are required.)

X		X
Signature of Subscriber	Date	Signature of Co-Subscriber	Date

Print Full Name of Subscriber Print Full Name of Co-Subscriber

Section B. Please sign here if you are an: ENTITY, TRUST, BENEFIT PLAN INVESTOR (see number (26) on pages B-7 for the definition) or OTHER (please specify)                                     .

ACCEPTANCE OF SUBSCRIPTION ON BEHALF OF ERISA PLANS OR INDIVIDUAL RETIREMENT ACCOUNTS IS IN NO RESPECT A REPRESENTATION BY THE GENERAL PARTNER OR MORGAN STANLEY SMITH BARNEY LLC THAT THIS INVESTMENT MEETS ALL RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY ANY PARTICULAR PLAN, OR THAT THIS INVESTMENT IS APPROPRIATE FOR ANY PARTICULAR PLAN.

The undersigned officer, partner, trustee, manager, or other representative hereby certifies and warrants that s/he has full power and authority from or on behalf of the entity named below and its shareholders, partners, beneficiaries, or members to make the statements, representations, and warranties made herein on their behalf.

	X
Print Full Name of Entity	Signature of Person Signing for Entity	Date
	Title:
	Print Full Name of Person Signing for Entity

B-11

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Walter Davis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Potomac Futures Fund L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2012

/s/ Walter Davis

Walter Davis

Ceres Managed Futures LLC

President and Director

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Damian George, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Potomac Futures Fund L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 14, 2012

/s/ Damian George

Damian George

Ceres Managed Futures LLC

Chief Financial Officer and Director

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Potomac Futures Fund L.P. (the “Partnership”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Walter Davis, President and Director of Ceres Managed Futures LLC, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ Walter Davis

Walter Davis

Ceres Managed Futures LLC

President and Director

Date: November 14, 2012

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Potomac Futures Fund L.P. (the “Partnership”) on Form 10-Q for the period ended September 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Damian George, Chief Financial Officer and Director of Ceres Managed Futures LLC, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Partnership.

/s/ Damian George

Damian George

Ceres Managed Futures LLC

Chief Financial Officer and Director

Date: November 14, 2012

XML

Trading Activities - Gross Fair Values of Derivative Instruments of Futures and Options Contracts as Separate Assets and Liabilities (Detail) (USD $)	Sep. 30, 2012		Dec. 31, 2011
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	$ 2,774,729		$ 2,595,462
Derivative liabilities	2,129,845		1,027,647
Futures Contracts [Member]
Derivative [Line Items]
Net unrealized appreciation and depreciation on open futures and forward contracts	252,498	[1]	591,876	[2]
Total unrealized appreciation on open futures and forward contracts	697,810		1,066,186
Derivative liabilities	445,312		474,310
Forward Contracts [Member]
Derivative [Line Items]
Net unrealized appreciation and depreciation on open futures and forward contracts	392,386	[3]	975,939	[4]
Total unrealized appreciation on open futures and forward contracts	2,076,919		1,529,276
Derivative liabilities	1,684,533		553,337
Assets [Member] | Futures Contracts [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	697,810		1,066,186
Assets [Member] | Futures Contracts [Member] | Energy [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	138,307		120,537
Assets [Member] | Futures Contracts [Member] | Grains [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	31,394		9,843
Assets [Member] | Futures Contracts [Member] | Indices [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	26,597		145,602
Assets [Member] | Futures Contracts [Member] | Interest Rates Non - U.S. [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	285,983		494,099
Assets [Member] | Futures Contracts [Member] | Interest Rates U. S. [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	79,189		195,796
Assets [Member] | Futures Contracts [Member] | Livestock [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	8,100		700
Assets [Member] | Futures Contracts [Member] | Metals [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	119,695		53,895
Assets [Member] | Futures Contracts [Member] | Softs [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	8,545		45,714
Assets [Member] | Forward Contracts [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	2,076,919		1,529,276
Assets [Member] | Forward Contracts [Member] | Metals [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	461,497		211,388
Assets [Member] | Forward Contracts [Member] | Currencies [Member]
Derivative [Line Items]
Total unrealized appreciation on open futures and forward contracts	1,615,422		1,317,888
Liabilities [Member] | Futures Contracts [Member]
Derivative [Line Items]
Derivative liabilities	(445,312)		(474,310)
Liabilities [Member] | Futures Contracts [Member] | Energy [Member]
Derivative [Line Items]
Derivative liabilities	(9,187)		(22,122)
Liabilities [Member] | Futures Contracts [Member] | Grains [Member]
Derivative [Line Items]
Derivative liabilities	(65,035)		(284,500)
Liabilities [Member] | Futures Contracts [Member] | Indices [Member]
Derivative [Line Items]
Derivative liabilities	(280,691)		(13,348)
Liabilities [Member] | Futures Contracts [Member] | Interest Rates Non - U.S. [Member]
Derivative [Line Items]
Derivative liabilities	(19,039)		(66,339)
Liabilities [Member] | Futures Contracts [Member] | Interest Rates U. S. [Member]
Derivative [Line Items]
Derivative liabilities	(25,055)		(15,441)
Liabilities [Member] | Futures Contracts [Member] | Livestock [Member]
Derivative [Line Items]
Derivative liabilities	(17,520)		(10,930)
Liabilities [Member] | Futures Contracts [Member] | Metals [Member]
Derivative [Line Items]
Derivative liabilities	(7,317)
Liabilities [Member] | Futures Contracts [Member] | Softs [Member]
Derivative [Line Items]
Derivative liabilities	(21,468)		(61,630)
Liabilities [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative liabilities	(1,684,533)		(553,337)
Liabilities [Member] | Forward Contracts [Member] | Metals [Member]
Derivative [Line Items]
Derivative liabilities	(457,159)		(53,214)
Liabilities [Member] | Forward Contracts [Member] | Currencies [Member]
Derivative [Line Items]
Derivative liabilities	$ (1,227,374)		$ (500,123)

[1] * This amount is in "Net unrealized appreciation on open futures contracts" on the Master's Statements of Financial Condition.

[2] This amount is in "Net unrealized appreciation on open futures contracts" on the Master's Statements of Financial Condition.

[3] ** This amount is in "Net unrealized appreciation on open forward contracts" on the Master's Statements of Financial Condition.

[4] This amount is in "Net unrealized appreciation on open forward contracts" on the Master's Statements of Financial Condition.

XML

Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Measurements

4. Fair Value Measurements:

Partnership’s Investments. The Partnership values its investment in the Master at its net asset value per unit as calculated by the Master. The Master values its investments as described in Note 2 of the Master’s notes to the annual financial statements as of December 31, 2011.

Partnership’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s Level 2 assets and liabilities.

The Partnership will separately present purchases, sales, issuances and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

Effective January 1, 2012, the Partnership adopted Accounting Standards Update (“ASU”) 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in GAAP and International Financial Reporting Standards [(“IFRS”)].” The amendments within this ASU change the wording used to describe many of the requirements in GAAP for measuring fair value and for disclosing information about fair value measurements to eliminate unnecessary wording differences between GAAP and IFRS. However, some of the amendments clarify the Financial Accounting Standards Board’s (“FASB”) intent about the application of existing fair value measurement requirements and other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. This new guidance did not have a significant impact on the Partnership’s financial statements.

The Partnership values its investment in the Master with no rights or obligations inherent within the ownership interest held by the Partnership based on the end of the day net asset value of the Master (Level 2). The value of the Partnership’s investment in the Master reflects its proportional interest in the Master. As of and for the periods ended September 30, 2012 and December 31, 2011, the Partnership did not hold any derivative instruments that were based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) or priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets and liabilities between Level 1 and Level 2.

	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Master	$	33,053,682	$	—	$	33,053,682	$	—
Net fair value	$	33,053,682	$	—	$	33,053,682	$	—
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Master	$	40,316,184	$	—	$	40,316,184	$	—
Net fair value	$	40,316,184	$	—	$	40,316,184	$	—

Master’s Investments. All commodity interests of the Master (including derivative financial instruments and derivative commodity instruments) are held for trading purposes. The commodity interests are recorded on trade date and open contracts are recorded at fair value (as described below) at the measurement date. Investments in commodity interests denominated in foreign currencies are translated into U.S. dollars at the exchange rates prevailing at the measurement date. Gains or losses are realized when contracts are liquidated. Unrealized gains or losses on open contracts are included as a component of equity in trading account on the Statements of Financial Condition. Net realized gains or losses and any change in net unrealized gains or losses from the preceding period are reported in the Statements of Income and Expenses and Changes in Partners’ Capital.

Master’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that based on available information in the marketplace, the Master’s Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Master’s Level 2 assets and liabilities.

The Master will separately present purchases, sales, issuances and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

The Master considers prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of non-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets and liabilities from observable inputs (Level 2). As of and for the periods ended September 30, 2012 and December 31, 2011, the Master did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

	September 30, 2012		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Futures	$	697,810	$	697,810	$	—	$	—
Forwards		2,076,919		461,497		1,615,422		—
Total assets		2,774,729		1,159,307		1,615,422		—
Liabilities
Futures	$	445,312	$	445,312	$	—	$	—
Forwards		1,684,533		457,159		1,227,374		—
Total liabilities		2,129,845		902,471		1,227,374		—
Net fair value	$	644,884	$	256,836	$	388,048	$	—
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Futures	$	1,066,186	$	1,066,186	$	—	$	—
Forwards		1,529,276		211,388		1,317,888		—
Total assets		2,595,462		1,277,574		1,317,888		—
Liabilities
Futures	$	474,310	$	474,310	$	—	$	—
Forwards		553,337		53,214		500,123		—
Total liabilities		1,027,647		527,524		500,123		—
Net fair value	$	1,567,815	$	750,050	$	817,765	$	—

XML

Financial Instrument Risks - Additional Information (Detail)	9 Months Ended
	Sep. 30, 2012
Fair Value Measurements Disclosure [Line Items]
Percentage of partnership master contract traded minimum	21.50%
Percentage of partnership master contract traded maximum	40.00%
Financial instruments mature	1 year

XML

Fair Value Measurements - Derivative Instruments, Fair Value Based on Hierarchy (Detail) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Derivative [Line Items]
Derivative assets	$ 2,774,729	$ 2,595,462
Derivative liabilities	2,129,845	1,027,647
Net fair value	644,884	1,567,815
Futures Contracts [Member]
Derivative [Line Items]
Derivative assets	697,810	1,066,186
Derivative liabilities	445,312	474,310
Forward Contracts [Member]
Derivative [Line Items]
Derivative assets	2,076,919	1,529,276
Derivative liabilities	1,684,533	553,337
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Derivative [Line Items]
Derivative assets	1,159,307	1,277,574
Derivative liabilities	902,471	527,524
Net fair value	256,836	750,050
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Futures Contracts [Member]
Derivative [Line Items]
Derivative assets	697,810	1,066,186
Derivative liabilities	445,312	474,310
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative assets	461,497	211,388
Derivative liabilities	457,159	53,214
Significant Other Observable Inputs (Level 2) [Member]
Derivative [Line Items]
Derivative assets	1,615,422	1,317,888
Derivative liabilities	1,227,374	500,123
Net fair value	388,048	817,765
Significant Other Observable Inputs (Level 2) [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative assets	1,615,422	1,317,888
Derivative liabilities	$ 1,227,374	$ 500,123

XML

Trading Activities

9 Months Ended

Sep. 30, 2012

Trading Activities

3. Trading Activities:

The Partnership was formed for the purpose of trading contracts in a variety of commodity interests, including derivative financial instruments and derivative commodity instruments. The Partnership invests substantially all of its assets through a “master/feeder” structure. The Partnership’s pro-rata share of the results of the Master’s trading activities are shown in the Statements of Income and Expenses and Changes in Partners’ Capital.

The customer agreements between the Partnership and CGM and the Master and CGM give the Partnership and the Master, respectively, the legal right to net unrealized gains and losses on open futures and on open forward contracts. The Master nets, for financial reporting purposes, the unrealized gains and losses on open futures and on open forward contracts on the Statements of Financial Condition as the criteria under Accounting Standards Codification (“ASC”) 210-20, “Balance Sheet,” have been met.

Brokerage fees are calculated as a percentage of the Partnership’s adjusted net asset value on the last day of each month and are affected by trading performance, subscriptions and redemptions.

All of the commodity interests owned by the Master are held for trading purposes. The monthly average number of futures contracts traded during the three months ended September 30, 2012 and 2011 were 2,236 and 1,673, respectively. The monthly average number of futures contracts traded during the nine months ended September 30, 2012 and 2011 were 2,056 and 1,614, respectively. The monthly average number of metals forward contracts traded during the three months ended September 30, 2012 and 2011 were 449 and 238, respectively. The monthly average number of metals forward contracts traded during the nine months ended September 30, 2012 and 2011 were 322 and 167, respectively. The monthly average notional values of currency forward contracts during the three months ended September 30, 2012 and 2011 were $405,896,707 and $660,781,804, respectively. The monthly average notional values of currency forward contracts during the nine months ended September 30, 2012 and 2011 were $341,579,439 and $615,634,709, respectively. The monthly average notional values of currency option contracts during the three months ended September 30, 2012 and 2011 were $0 and $39,274,753,998, respectively. The monthly average notional values of currency option contracts during the nine months ended September 30, 2012 and 2011 were $0 and $44,099,454,339, respectively. The following tables indicate the gross fair values of derivative instruments of futures, forward and options contracts as separate assets and liabilities as of September 30, 2012 and December 31, 2011.

Assets	September 30, 2012
Futures Contracts
Energy	$	138,307
Grains		31,394
Indices		26,597
Interest Rates Non-U.S.		285,983
Interest Rates U.S.		79,189
Livestock		8,100
Metals		119,695
Softs		8,545
Total unrealized appreciation on open futures contracts	$	697,810
Liabilities
Futures Contracts
Energy	$	(9,187	)
Grains		(65,035	)
Indices		(280,691	)
Interest Rates Non-U.S.		(19,039	)
Interest Rates U.S.		(25,055	)
Livestock		(17,520	)
Metals		(7,317	)
Softs		(21,468	)
Total unrealized depreciation on open futures contracts	$	(445,312	)
Net unrealized appreciation on open futures contracts	$	252,498	*
Assets
Forward Contracts
Currencies	$	1,615,422
Metals		461,497
Total unrealized appreciation on open forward contracts	$	2,076,919
Liabilities
Forward Contracts
Currencies	$	(1,227,374	)
Metals		(457,159	)
Total unrealized depreciation on open forward contracts	$	(1,684,533	)
Net unrealized appreciation on open forward contracts	$	392,386	**

* This amount is in “Net unrealized appreciation on open futures contracts” on the Master’s Statements of Financial Condition.

** This amount is in “Net unrealized appreciation on open forward contracts” on the Master’s Statements of Financial Condition.

Assets	December 31, 2011
Futures Contracts
Energy	$	120,537
Grains		9,843
Indices		145,602
Interest Rates Non-U.S.		494,099
Interest Rates U.S.		195,796
Livestock		700
Metals		53,895
Softs		45,714
Total unrealized appreciation on open futures contracts	$	1,066,186
Liabilities
Futures Contracts
Energy	$	(22,122	)
Grains		(284,500	)
Indices		(13,348	)
Interest Rates Non-U.S.		(66,339	)
Interest Rates U.S.		(15,441	)
Livestock		(10,930	)
Softs		(61,630	)
Total unrealized depreciation on open futures contracts	$	(474,310	)
Net unrealized appreciation on open futures contracts	$	591,876	*
Assets
Forward Contracts
Currencies	$	1,317,888
Metals		211,388
Total unrealized appreciation on open forward contracts	$	1,529,276
Liabilities
Forward Contracts
Currencies	$	(500,123	)
Metals		(53,214	)
Total unrealized depreciation on open forward contracts	$	(553,337	)
Net unrealized appreciation on open forward contracts	$	975,939	**
*       This amount is in “Net unrealized appreciation on open futures contracts” on the Master’s Statements of Financial Condition. **     This amount is in “Net unrealized appreciation on open forward contracts” on the Master’s Statements of Financial Condition.

The following table indicates the trading gains and losses, by market sector, on derivative instruments for the three and nine months ended September 30, 2012 and 2011.

	Three Months Ended September 30,						Nine Months Ended September 30,
Sector	2012			2011			2012			2011
Currencies	$	238,122		$	(1,683,768	)	$	(271,416	)	$	(1,166,638	)
Energy		117,288			(552,413	)		720,115			(428,277	)
Grains		718,121			(470,666	)		569,227			(881,655	)
Indices		834,805			(745,242	)		943,831			(2,131,747	)
Interest Rates U.S.		250,328			1,682,966			746,316			2,517,194
Interest Rates Non-U.S.		124,096			3,937,196			1,600,256			3,697,786
Livestock		(177,390	)		(100,880	)		(264,940	)		(249,630	)
Metals		(14,512	)		343,462			(325,329	)		8,029
Softs		(203,400	)		(394,604	)		575,681			(328,864	)
Total	$	1,887,458	***	$	2,016,051	***	$	4,293,741	***	$	1,036,198	***

***  This amount is in “Total trading results” on the Master’s Statements of Income and Expenses and Changes in Partners’ Capital.

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Statements of Financial Condition (USD $)	Sep. 30, 2012	Dec. 31, 2011
Assets:
Investment in Master, at fair value	$ 33,053,682	$ 40,316,184
Cash	145,353	82,623
Total assets	33,199,035	40,398,807
Accrued expenses:
Brokerage fees	152,162	185,161
Management fees	54,886	66,834
Other	115,287	113,301
Redemptions payable	230,736	548,767
Total liabilities	553,071	914,063
Partners' Capital:
General Partner, 265.4926 and 337.4926 unit equivalents outstanding at September 30, 2012 and December 31, 2011, respectively	370,352	448,879
Limited Partners, 23,137.2628 and 29,349.3066 Redeemable Units outstanding at September 30, 2012 and December 31, 2011, respectively	32,275,612	39,035,865
Total partners' capital	32,645,964	39,484,744
Total liabilities and partners' capital	$ 33,199,035	$ 40,398,807
Net asset value per unit	$ 1,394.96	$ 1,330.04

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General

9 Months Ended

Sep. 30, 2012

General

1. General:

Potomac Futures Fund L.P. (the “Partnership”) is a limited partnership which was organized on March 14, 1997 under the partnership laws of the State of New York to engage, directly or indirectly, in the speculative trading of a diversified portfolio of commodity interests including futures contracts, options, swap and forward contracts. The sectors traded include currencies, energy, grains, indices, U.S. and non-U.S. interest rates, livestock, metals and softs. The commodity interests that are indirectly traded by the Partnership through its investment in the Master (as defined below) are volatile and involve a high degree of market risk. The Partnership was authorized to sell an unlimited number of redeemable units of limited partnership interest (“Redeemable Units”) during its initial offering period. The Partnership privately and continuously offers Redeemable Units in the Partnership to qualified investors. There is no maximum number of Redeemable Units that may be sold by the Partnership.

Ceres Managed Futures LLC, a Delaware limited liability company, acts as the general partner (the “General Partner”) and commodity pool operator of the Partnership. The General Partner is wholly owned by Morgan Stanley Smith Barney Holdings LLC (“MSSB Holdings”). Morgan Stanley, indirectly through various subsidiaries, owns a majority equity interest in MSSB Holdings. Citigroup Inc. indirectly owns a minority equity interest in MSSB Holdings. Citigroup Inc. also indirectly owns Citigroup Global Markets Inc. (“CGM”), the commodity broker and a selling agent for the Partnership. Prior to July 31, 2009, the date as of which MSSB Holdings became its owner, the General Partner was wholly owned by Citigroup Financial Products Inc., a wholly owned subsidiary of Citigroup Global Markets Holdings Inc., the sole owner of which is Citigroup Inc. As of September 30, 2012, all trading decisions for the Partnership are made by the Advisor (defined below).

On January 1, 2005, the Partnership allocated substantially all of its capital to the CMF Campbell Master Fund L.P. (the “Master”), a limited partnership organized under the partnership laws of the State of New York. The Partnership purchased 173,788.6446 units of the Master with cash equal to $172,205,653 and a contribution of open commodity futures and forward contracts with a fair value of $1,582,992. The Master was formed in order to permit accounts managed by Campbell & Company, Inc. (“Campbell” or the “Advisor”) using Campbell’s FME Large Portfolio Program (“FME”), a proprietary, systematic trading program, to invest together in one trading vehicle. The General Partner is also the general partner of the Master. Individual and pooled accounts currently managed by the Advisor, including the Partnership, are permitted to be limited partners of the Master. The General Partner and the Advisor believe that trading through this master/feeder structure promotes efficiency and economy in the trading process. Expenses to investors as a result of the investment in the Master are approximately the same and redemption rights are not affected.

The General Partner is not aware of any material changes to the trading program discussed above during the fiscal quarter ended September 30, 2012.

As of September 30, 2012 and December 31, 2011, the Partnership owned 100% of the Master. The Partnership intends to continue to invest substantially all of its assets in the Master. The performance of the Partnership is directly affected by the performance of the Master. The Master’s trading of futures, forwards, swaps and options contracts, if applicable, on commodities is done primarily on U.S. and foreign commodity exchanges. The Master engages in such trading through a commodity brokerage account maintained with CGM. The Master’s Statements of Financial Condition, including Condensed Schedules of Investments and Statements of Income and Expenses and Changes in Partners’ Capital are included herein.

The General Partner and each limited partner share in the profits and losses of the Partnership in proportion to the amount of partnership interest owned by each except that no limited partner shall be liable for obligations of the Partnership in excess of its capital contribution and profits or losses, if any, net of distributions.

The accompanying financial statements and accompanying notes are unaudited but, in the opinion of management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the Partnership’s financial condition at September 30, 2012 and December 31, 2011, and the results of its operations and changes in partners’ capital for the three and nine months ended September 30, 2012 and 2011. These financial statements present the results of interim periods and do not include all disclosures normally provided in annual financial statements. You should read these financial statements together with the financial statements and notes included in the Partnership’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended December 31, 2011.

The preparation of financial statements and accompanying notes in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Due to the nature of commodity trading, the results of operations for the interim periods presented should not be considered indicative of the results that may be expected for the entire year.

The Master’s Statements of Financial Condition and Condensed Schedules of Investments as of September 30, 2012 and December 31, 2011 and Statements of Income and Expenses and Changes in Partners’ Capital for the three and nine months ended September 30, 2012 and 2011 are presented below:

CMF Campbell Master Fund L.P.

Statements of Financial Condition

	(Unaudited) September 30, 2012		December 31, 2011
Assets:
Equity in trading account:
Cash	$	26,713,022	$	34,085,954
Cash margin		5,743,812		4,716,760
Net unrealized appreciation on open futures contracts		252,498		591,876
Net unrealized appreciation on open forward contracts		392,386		975,939
Total assets	$	33,101,718	$	40,370,529
Liabilities and Partners’ Capital:
Liabilities:
Accrued expenses:
Professional fees	$	49,409	$	54,345
Total liabilities		49,409		54,345
Partners’ Capital:
General Partner, 0.0000 Unit equivalents at September 30, 2012 and December 31, 2011		0		0
Limited Partners, 22,899.3596 and 31,102.0434 units outstanding at September 30, 2012 and December 31, 2011, respectively		33,052,309		40,316,184
Total liabilities and partners’ capital	$	33,101,718	$	40,370,529
Net asset value per unit	$	1,443.37	$	1,296.26

CMF Campbell Master Fund L.P.

Condensed Schedule of Investments

September 30, 2012

(Unaudited)

	Notional ($)/ Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Energy		74	$	130,890			0.40	%
Grains		69		(33,641	)		(0.10	)
Indices		331		(254,094	)		(0.77	)
Interest Rates Non-U.S.		989		271,264			0.82
Interest Rates U.S.		322		54,134			0.16
Metals		45		112,378			0.34
Total futures contracts purchased				280,931			0.85
Futures Contracts Sold
Energy		2		(1,770	)		(0.01	)
Interest Rates Non-U.S.		33		(4,320	)		(0.01	)
Livestock		45		(9,420	)		(0.03	)
Softs		32		(12,923	)		(0.04	)
Total futures contracts sold				(28,433	)		(0.09	)
Unrealized Appreciation on Open Forward Contracts
Currencies	$	153,618,926		1,615,422			4.89
Metals		211		461,497			1.39
Total unrealized appreciation on open forward contracts				2,076,919			6.28
Unrealized Depreciation on Open Forward Contracts
Currencies	$	139,362,724		(1,227,374	)		(3.71	)
Metals		128		(457,159	)		(1.38	)
Total unrealized depreciation on open forward contracts				(1,684,533	)		(5.09	)
Net fair value			$	644,884			1.95	%

CMF Campbell Master Fund L.P.

Condensed Schedule of Investments

December 31, 2011

	Notional ($)/ Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Energy		48	$	(533	)		(0.00	)%*
Grains		9		9,843			0.02
Indices		73		94,631			0.24
Interest Rates Non-U.S.		1,131		418,802			1.04
Interest Rates U.S.		185		194,093			0.48
Livestock		7		(2,750	)		(0.01	)
Total futures contracts purchased				714,086			1.77
Futures Contracts Sold
Energy		67		98,948			0.25
Grains		121		(284,500	)		(0.70	)
Indices		77		37,623			0.09
Interest Rates Non-U.S.		29		8,957			0.02
Interest Rates U.S.		123		(13,737	)		(0.03	)
Livestock		9		(7,480	)		(0.02	)
Metals		13		53,895			0.13
Softs		74		(15,916	)		(0.04	)
Total futures contracts sold				(122,210	)		(0.30	)
Unrealized Appreciation on Open Forward Contracts
Currencies	$	86,978,000		1,317,888			3.27
Metals		89		211,388			0.52
Total unrealized appreciation on open forward contracts				1,529,276			3.79
Unrealized Depreciation on Open Forward Contracts
Currencies	$	53,420,743		(500,123	)		(1.24	)
Metals		34		(53,214	)		(0.13	)
Total unrealized depreciation on open forward contracts				(553,337	)		(1.37	)
Net fair value			$	1,567,815			3.89	%

* Due to rounding.

CMF Campbell Master Fund L.P.

Statements of Income and Expenses and Changes in Partners’ Capital

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Investment Income:
Interest income	$	4,496		$	1,260		$	11,864		$	10,146
Expenses:
Clearing fees		35,758			28,959			96,480			78,686
Professional fees		17,843			11,058			57,175			44,504
Total expenses		53,601			40,017			153,655			123,190
Net investment income (loss)		(49,105	)		(38,757	)		(141,791	)		(113,044	)
Trading Results:
Net gains (losses) on trading of commodity interests:
Net realized gains (losses) on closed contracts		35,724			2,185,528			5,216,672			3,172,922
Change in net unrealized gains (losses) on open contracts		1,851,734			(169,477	)		(922,931	)		(2,136,724	)
Total trading results		1,887,458			2,016,051			4,293,741			1,036,198
Net income (loss)		1,838,353			1,977,294			4,151,950			923,154
Subscriptions — Limited Partners		613,500			1,365,867			1,114,077			13,549,311
Redemptions — Limited Partners		(6,882,649	)		(2,093,191	)		(12,518,038	)		(9,015,200	)
Distribution of interest income to feeder funds		(4,496	)		(1,260	)		(11,864	)		(10,146	)
Net increase (decrease) in Partners’ capital		(4,435,292	)		1,248,710			(7,263,875	)		5,447,119
Partners’ Capital, beginning of period		37,487,601			40,574,401			40,316,184			36,375,992
Partners’ Capital, end of period	$	33,052,309		$	41,823,111		$	33,052,309		$	41,823,111
Net asset value per unit (22,899.3596 and 31,569.1481 units outstanding at September 30, 2012 and 2011, respectively)	$	1,443.37		$	1,324.81		$	1,443.37		$	1,324.81
Net income (loss) per unit*	$	70.83		$	62.93		$	147.54		$	25.82
Weighted average units outstanding		26,778.5546			32,038.1060			28,530.8988			31,825.4520

* Based on change in net asset value per unit.

XML

General - Statements of Income and Expenses and Changes in Partners' Capital (Parenthetical) (Detail)	Sep. 30, 2012	Sep. 30, 2011
Condensed Financial Statements, Captions [Line Items]
Net asset value per unit outstanding	23,402.7554	29,685.0996
Limited Partner [Member]
Condensed Financial Statements, Captions [Line Items]
Net asset value per unit outstanding	23,402.7554	29,685.0996

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Trading Activities - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Derivative [Line Items]
Average number of futures and exchange-cleared swap contracts traded	2,236	1,673	2,056	1,614
Average number of metal forward contracts traded	449	238	322	167
Forward Contracts [Member]
Derivative [Line Items]
Average notional value of forward currency and option contract	405,896,707	660,781,804	341,579,439	615,634,709
Option Contract [Member]
Derivative [Line Items]
Average notional value of forward currency and option contract	0	39,274,753,998	0	44,099,454,339

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Financial Highlights

9 Months Ended

Sep. 30, 2012

Financial Highlights

2. Financial Highlights:

Changes in net asset value per unit for the three and nine months ended September 30, 2012 and 2011 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net realized and unrealized gains (losses) allocated from Master*	$	50.74		$	48.52		$	92.29		$	(29.48	)
Interest income allocated from Master		0.17			0.05			0.43			0.38
Expenses **		(8.07	)		(9.10	)		(27.80	)		(28.54	)
Increase (decrease) for the period		42.84			39.47			64.92			(57.64	)
Net asset value per unit, beginning of period		1,352.12			1,350.30			1,330.04			1,447.41
Net asset value per unit, end of period	$	1,394.96		$	1,389.77		$	1,394.96		$	1,389.77

* Includes Partnership brokerage fees and clearing fees allocated from the Master.

** Excludes Partnership brokerage fees and clearing fees allocated from the Master.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011***			2012			2011***
Ratio to average net assets:****
Net investment income (loss)		(8.5	)%		(8.5	)%		(8.8	)%		(8.7	)%
Incentive fees		0	%		0	%		0	%		0	%
Net investment income (loss) before incentive fees*****		(8.5	)%		(8.5	)%		(8.8	)%		(8.7	)%
Operating expenses		8.5	%		8.5	%		8.8	%		8.7	%
Incentive fees		0	%		0	%		0	%		0	%
Total expenses		8.5	%		8.5	%		8.8	%		8.7	%
Total return:
Total return before incentive fees		3.2	%		2.9	%		4.9	%		(4.0	)%
Incentive fees		0	%		0	%		0	%		0	%
Total return after incentive fees		3.2	%		2.9	%		4.9	%		(4.0	)%

*** The ratios are shown net and gross of incentive fees to conform to current period presentation.

**** Annualized (other than incentive fees).

***** Interest income allocated from the Master less total expenses.

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average net assets.

Financial Highlights of the Master:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net realized and unrealized gains (losses)*	$	71.37		$	63.24		$	149.18		$	26.92
Interest income		0.17			0.04			0.43			0.34
Expenses **		(0.71	)		(0.35	)		(2.07	)		(1.44	)
Increase (decrease) for the period		70.83			62.93			147.54			25.82
Distribution of interest income to feeder funds		(0.17	)		(0.04	)		(0.43	)		(0.34	)
Net asset value per unit, beginning of period		1,372.71			1,261.92			1,296.26			1,299.33
Net asset value per unit, end of period	$	1,443.37		$	1,324.81		$	1,443.37		$	1,324.81

* Includes clearing fees.

** Excludes clearing fees.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Ratios to Average Net Assets:***
Net investment income (loss)****		(0.5	)%		(0.4	)%		(0.5	)%		(0.4	)%
Operating expenses		0.6	%		0.4	%		0.5	%		0.4	%
Total return		5.2	%		5.0	%		11.4	%		2.0	%

*** Annualized.

**** Interest income less total expenses.

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average net assets.

XML

Statements of Financial Condition (Parenthetical)	Sep. 30, 2012	Dec. 31, 2011
General Partner, units outstanding	265.4926	337.4926
Limited Partners Redeemable Units outstanding	23,137.2628	29,349.3066

XML

General - Additional Information (Detail) (USD $)	9 Months Ended	12 Months Ended	1 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Jan. 01, 2005 Campbell Master Fund L. P [Member]
Related Party Transaction [Line Items]
Units of Partnership purchased			173,788.6446
Cash equal, partnership purchased			$ 172,205,653
Fair value,partnership purchased			$ 1,582,992
Percentage of partnership owned	100.00%	100.00%

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2012	Oct. 31, 2012
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Entity Registrant Name	POTOMAC FUTURES FUND LP
Entity Central Index Key	0001043565
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Limited Partnership Redeemable Units Outstanding		22,772.7578

XML

General - Statement of Financial Condition (Detail) (USD $)	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Equity in trading account:
Cash	$ 145,353	$ 82,623
Net unrealized appreciation	644,884	1,567,815
Total assets	33,199,035	40,398,807
Accrued expenses:
Total liabilities	553,071	914,063
Partners' Capital:
General Partner, 265.4926 and 337.4926 Unit equivalents at September 30, 2012 and December 31, 2011	370,352	448,879
Limited Partners, 23,137.2628 and 29,349.3066 units outstanding at September 30, 2012 and December 31, 2011, respectively	32,275,612	39,035,865
Total liabilities and partners' capital	33,199,035	40,398,807
Net asset value per unit	$ 1,394.96	$ 1,330.04	$ 1,389.77
Limited Partner [Member]
Equity in trading account:
Cash	26,713,022	34,085,954
Cash margin	5,743,812	4,716,760
Total assets	33,101,718	40,370,529
Accrued expenses:
Professional fees	49,409	54,345
Total liabilities	49,409	54,345
Partners' Capital:
General Partner, 265.4926 and 337.4926 Unit equivalents at September 30, 2012 and December 31, 2011	0	0
Limited Partners, 23,137.2628 and 29,349.3066 units outstanding at September 30, 2012 and December 31, 2011, respectively	33,052,309	40,316,184
Total liabilities and partners' capital	33,101,718	40,370,529
Net asset value per unit	$ 1,443.37	$ 1,296.26	$ 1,324.81
Limited Partner [Member] | Futures Contracts [Member]
Equity in trading account:
Net unrealized appreciation	252,498	591,876
Limited Partner [Member] | Forward Contracts [Member]
Equity in trading account:
Net unrealized appreciation	$ 392,386	$ 975,939

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Statements of Income and Expenses and Changes in Partners' Capital (Unaudited) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Investment Income:
Interest income allocated from Master	$ 4,496		$ 1,260		$ 11,864		$ 10,146
Expenses:
Expenses allocated from Master	53,601		40,017		153,655		123,190
Brokerage fees	502,034		594,517		1,595,707		1,696,419
Management fees	181,060		214,985		575,077		613,328
Other	8,700		43,960		141,074		158,005
Total expenses	745,395		893,479		2,465,513		2,590,942
Net investment income (loss)	(740,899)		(892,219)		(2,453,649)		(2,580,796)
Trading Results:
Net realized gains (losses) on closed contracts allocated from Master	35,724		2,185,528		5,216,672		3,172,922
Change in net unrealized gains (losses) on open contracts allocated from Master	1,851,734		(169,477)		(922,931)		(2,136,724)
Total trading results allocated from Master	1,887,458		2,016,051		4,293,741		1,036,198
Net income (loss)	1,146,559		1,123,832		1,840,092		(1,544,598)
Subscriptions - Limited Partners	613,500		1,365,867		1,114,077		13,549,311
Redemptions - General Partner	(100,437)		0		(100,437)		0
Redemptions - Limited Partners	(5,238,617)		(891,479)		(9,692,512)		(6,620,319)
Net increase (decrease) in Partners' Capital	(3,578,995)		1,598,220		(6,838,780)		5,384,394
Partners' Capital, beginning of period	36,224,959		39,657,205		39,484,744		35,871,031
Partners' Capital, end of period	$ 32,645,964		$ 41,255,425		$ 32,645,964		$ 41,255,425
Net asset value per unit (23,402.7554 and 29,685.0996 units outstanding at September 30, 2012 and 2011, respectively)	$ 1,394.96		$ 1,389.77		$ 1,394.96		$ 1,389.77
Net income (loss) per unit*	$ 42.84	[1]	$ 39.47	[1]	$ 64.92	[1]	$ (57.64)	[1]
Weighted average units outstanding	25,728.3654		29,672.4321		27,573.9692		28,686.5132

[1] Based on change in net asset value per unit.

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Critical Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2012

Use of Estimates

Use of Estimates. The preparation of financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Partnership's Investments

Partnership’s Investments. The Partnership values its investment in the Master at its net asset value per unit as calculated by the Master. The Master values its investments as described in Note 2 of the Master’s notes to the annual financial statements as of December 31, 2011.

Partnership's and Master's Fair Value Measurements

Partnership’s and Master’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that based on available information in the marketplace, the Masters’s Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s and Master’s Level 2 assets and liabilities.

The Partnership will separately present purchases, sales, issuances and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

The Partnership values its investment in the Master where there are no other rights or obligations inherent within the ownership interest held by the Partnership based on the end of the day net asset value of the Master (Level 2). The value of the Partnership’s investment in the Master reflects its proportional interest in the Master. As of and for the periods ended September 30, 2012 and December 31, 2011, the Partnership did not hold any derivative instruments that were based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) or priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

The Master considers prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of non-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets and liabilities from observable inputs (Level 2). As of and for the periods ended September 30, 2012 and December 31, 2011, the Master did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

Futures Contracts

Futures Contracts. The Master trades futures contracts. A futures contract is a firm commitment to buy or sell a specified quantity of investments, currency or a standardized amount of a deliverable grade commodity, at a specified price on a specified future date, unless the contract is closed before the delivery date or if the delivery quantity is something where physical delivery cannot occur (such as the S&P 500 Index), whereby such contract is settled in cash. Payments (“variation margin”) may be made or received by the Master each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Master. When the contract is closed, the Master records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in futures contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the futures broker, directly with the exchange on which the contracts are traded. Net realized gains (losses) and changes in net unrealized gains (losses) on futures contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Forward Foreign Currency Contracts

Forward Foreign Currency Contracts. Forward foreign currency contracts are those contracts where the Master agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. Forward foreign currency contracts are valued daily, and the Master’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statements of Financial Condition. Net realized gains (losses) and changes in net unrealized gains (losses) on forward foreign currency contracts are recognized in the period in which the contract is closed or the changes occur, respectively, and are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

The Master does not isolate that portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations from changes in market prices of investments held. Such fluctuations are included in net income (loss) on investments in the Statements of Income and Expenses and Changes in Partners’ Capital.

London Metals Exchange Forward Contracts

London Metals Exchange Forward Contracts. Metal contracts traded on the London Metals Exchange (“LME”) represent a firm commitment to buy or sell a specified quantity of aluminum, copper, lead, nickel, tin or zinc. LME contracts traded by the Master are cash settled based on prompt dates published by the LME. Payments (“variation margin”) may be made or received by the Master each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Master. A contract is considered offset when all long positions have been matched with a like number of short positions settling on the same prompt date. When the contract is closed at the prompt date, the Master records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in LME contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the broker, directly with the LME. Net realized gains (losses) and changes in net unrealized gains (losses) on metal contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Options

Options. The Master may purchase and write (sell) both exchange–listed and OTC options on commodities or financial instruments. An option is a contract allowing, but not requiring, its holder to buy (call) or sell (put) a specific or standard commodity or financial instrument at a specified price during a specified time period. The option premium is the total price paid or received for the option contract. When the Master writes an option, the premium received is recorded as a liability in the Statements of Financial Condition and marked to market daily. When the Master purchases an option, the premium paid is recorded as an asset in the Statements of Financial Condition and marked to market daily. Net realized gains (losses) and changes in net unrealized gains (losses) on option contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Income Taxes

Income Taxes. Income taxes have not been provided as each partner is individually liable for the taxes, if any, on its share of the Partnership’s income and expenses.

GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions with respect to tax at the Partnership level not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. The General Partner concluded that no provision for income tax is required in the Partnership’s financial statements.

The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The 2009 through 2011 tax years remain subject to examination by U.S. federal and most state tax authorities. The General Partner does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Subsequent Events

Subsequent Events. The General Partner evaluates events that occur after the balance sheet date but before financial statements are filed. The General Partner has assessed the subsequent events through the date of filing and determined that there were no subsequent events requiring adjustment of or disclosure in the financial statements.

Net Income (Loss) per unit

Net Income (Loss) per unit. Net income (loss) per unit is calculated in accordance with investment company guidance. See Note 2, “Financial Highlights.”

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Critical Accounting Policies

9 Months Ended

Sep. 30, 2012

Critical Accounting Policies

6. Critical Accounting Policies

Use of Estimates. The preparation of financial statements and accompanying notes in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and related disclosures of contingent assets and liabilities in the financial statements and accompanying notes. As a result, actual results could differ from these estimates.

Partnership’s Investments. The Partnership values its investment in the Master at its net asset value per unit as calculated by the Master. The Master values its investments as described in Note 2 of the Master’s notes to the annual financial statements as of December 31, 2011.

Partnership’s and Master’s Fair Value Measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. The fair value hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to fair values derived from unobservable inputs (Level 3). The level in the fair value hierarchy within which the fair value measurement in its entirety falls shall be determined based on the lowest level input that is significant to the fair value measurement in its entirety. Management has concluded that based on available information in the marketplace, the Masters’s Level 1 assets and liabilities are actively traded.

GAAP also requires the use of judgment in determining if a formerly active market has become inactive and in determining fair values when the market has become inactive. Management has concluded that based on available information in the marketplace, there has not been a significant decrease in the volume and level of activity in the Partnership’s and Master’s Level 2 assets and liabilities.

The Partnership will separately present purchases, sales, issuances and settlements in its reconciliation of Level 3 fair value measurements (i.e., to present such items on a gross basis rather than on a net basis), and make disclosures regarding the level of disaggregation and the inputs and valuation techniques used to measure fair value for measurements that fall within either Level 2 or Level 3 of the fair value hierarchy as required under GAAP.

The Partnership values its investment in the Master where there are no other rights or obligations inherent within the ownership interest held by the Partnership based on the end of the day net asset value of the Master (Level 2). The value of the Partnership’s investment in the Master reflects its proportional interest in the Master. As of and for the periods ended September 30, 2012 and December 31, 2011, the Partnership did not hold any derivative instruments that were based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1) or priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

The Master considers prices for exchange-traded commodity futures, forwards and options contracts to be based on unadjusted quoted prices in active markets for identical assets and liabilities (Level 1). The values of non-exchange-traded forwards, swaps and certain options contracts for which market quotations are not readily available are priced by broker-dealers who derive fair values for those assets and liabilities from observable inputs (Level 2). As of and for the periods ended September 30, 2012 and December 31, 2011, the Master did not hold any derivative instruments that were priced at fair value using unobservable inputs through the application of management’s assumptions and internal valuation pricing models (Level 3). During the nine months ended September 30, 2012, there were no transfers of assets or liabilities between Level 1 and Level 2.

Futures Contracts. The Master trades futures contracts. A futures contract is a firm commitment to buy or sell a specified quantity of investments, currency or a standardized amount of a deliverable grade commodity, at a specified price on a specified future date, unless the contract is closed before the delivery date or if the delivery quantity is something where physical delivery cannot occur (such as the S&P 500 Index), whereby such contract is settled in cash. Payments (“variation margin”) may be made or received by the Master each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Master. When the contract is closed, the Master records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in futures contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the futures broker, directly with the exchange on which the contracts are traded. Net realized gains (losses) and changes in net unrealized gains (losses) on futures contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Forward Foreign Currency Contracts. Forward foreign currency contracts are those contracts where the Master agrees to receive or deliver a fixed quantity of foreign currency for an agreed-upon price on an agreed future date. Forward foreign currency contracts are valued daily, and the Master’s net equity therein, representing unrealized gain or loss on the contracts as measured by the difference between the forward foreign exchange rates at the dates of entry into the contracts and the forward rates at the reporting date, is included in the Statements of Financial Condition. Net realized gains (losses) and changes in net unrealized gains (losses) on forward foreign currency contracts are recognized in the period in which the contract is closed or the changes occur, respectively, and are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

The Master does not isolate that portion of the results of operations arising from the effect of changes in foreign exchange rates on investments from fluctuations from changes in market prices of investments held. Such fluctuations are included in net income (loss) on investments in the Statements of Income and Expenses and Changes in Partners’ Capital.

London Metals Exchange Forward Contracts. Metal contracts traded on the London Metals Exchange (“LME”) represent a firm commitment to buy or sell a specified quantity of aluminum, copper, lead, nickel, tin or zinc. LME contracts traded by the Master are cash settled based on prompt dates published by the LME. Payments (“variation margin”) may be made or received by the Master each business day, depending on the daily fluctuations in the value of the underlying contracts, and are recorded as unrealized gains or losses by the Master. A contract is considered offset when all long positions have been matched with a like number of short positions settling on the same prompt date. When the contract is closed at the prompt date, the Master records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed. Transactions in LME contracts require participants to make both initial margin deposits of cash or other assets and variation margin deposits, through the broker, directly with the LME. Net realized gains (losses) and changes in net unrealized gains (losses) on metal contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Options. The Master may purchase and write (sell) both exchange–listed and OTC options on commodities or financial instruments. An option is a contract allowing, but not requiring, its holder to buy (call) or sell (put) a specific or standard commodity or financial instrument at a specified price during a specified time period. The option premium is the total price paid or received for the option contract. When the Master writes an option, the premium received is recorded as a liability in the Statements of Financial Condition and marked to market daily. When the Master purchases an option, the premium paid is recorded as an asset in the Statements of Financial Condition and marked to market daily. Net realized gains (losses) and changes in net unrealized gains (losses) on option contracts are included in the Statements of Income and Expenses and Changes in Partners’ Capital.

Income Taxes. Income taxes have not been provided as each partner is individually liable for the taxes, if any, on its share of the Partnership’s income and expenses.

GAAP provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements and requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Partnership’s financial statements to determine whether the tax positions are “more-likely-than-not” to be sustained by the applicable tax authority. Tax positions with respect to tax at the Partnership level not deemed to meet the “more-likely-than-not” threshold would be recorded as a tax benefit or expense in the current year. The General Partner concluded that no provision for income tax is required in the Partnership’s financial statements.

The Partnership files U.S. federal and various state and local tax returns. No income tax returns are currently under examination. The 2009 through 2011 tax years remain subject to examination by U.S. federal and most state tax authorities. The General Partner does not believe that there are any uncertain tax positions that require recognition of a tax liability.

Subsequent Events. The General Partner evaluates events that occur after the balance sheet date but before financial statements are filed. The General Partner has assessed the subsequent events through the date of filing and determined that there were no subsequent events requiring adjustment of or disclosure in the financial statements.

Recent Accounting Pronouncements. In October 2011, FASB issued a proposed ASU intended to improve and converge financial reporting by setting forth consistent criteria for determining whether an entity is an investment company. Under longstanding GAAP, investment companies carry all of their investments at fair value, even if they hold a controlling interest in another company. The primary changes being proposed by FASB relate to which entities would be considered investment companies as well as certain disclosure and presentation requirements. In addition to the changes to the criteria for determining whether an entity is an investment company, FASB also proposes that an investment company consolidate another investment company if it holds a controlling financial interest in the entity. In August 2012, FASB updated the proposed ASU to state that entities regulated under the Investment Company Act of 1940 should qualify to be investment companies within the proposed investment company guidance. The Partnership will evaluate the impact that this proposed update would have on the financial statements once the pronouncement is issued.

In December 2011, FASB issued ASU 2011-11, “Disclosures about Offsetting Assets and Liabilities,” which creates a new disclosure requirement about the nature of an entity’s rights of setoff and the related arrangements associated with its financial instruments and derivative instruments. Entities are required to disclose both gross information and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting arrangement. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of GAAP and those entities that prepare their financial statements on the basis of IFRS. The disclosure requirements are effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Partnership should also provide the disclosures retrospectively for all comparative periods presented. The Partnership is currently evaluating the impact that the pronouncement would have on the financial statements.

Net Income (Loss) per unit. Net income (loss) per unit is calculated in accordance with investment company guidance. See Note 2, “Financial Highlights.”

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Financial Highlights - Changes in Net Asset Value Per Unit (Detail) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Campbell Master Fund L. P [Member]
Ratio to average net assets:
Net investment income (loss)	(0.50%)	[1],[2]	(0.40%)	[1],[2]	(0.50%)	[1],[2]	(0.40%)	[1],[2]
Operating expenses	0.60%	[1]	0.40%	[1]	0.50%	[1]	0.40%	[1]
Total return	5.20%		5.00%		11.40%		2.00%
Total return:
Net realized and unrealized gains (losses)	71.37	[3]	63.24	[3]	149.18	[3]	26.92	[3]
Interest income	$ 0.17		$ 0.04		$ 0.43		$ 0.34
Expenses	$ (0.71)	[4]	$ (0.35)	[4]	$ (2.07)	[4]	$ (1.44)	[4]
Increase (decrease) for the period	70.83		62.93		147.54		25.82
Distribution of interest income to feeder funds	$ (0.17)		$ (0.04)		$ (0.43)		$ (0.34)
Net asset value per unit, beginning of period	1,372.71		1,261.92		1,296.26		1,299.33
Net asset value per unit, end of period	1,443.37		1,324.81		1,443.37		1,324.81
Limited Partner [Member]
Ratio to average net assets:
Net investment income (loss)	(8.50%)	[5]	(8.50%)	[5],[6]	(8.80%)	[5]	(8.70%)	[5],[6]
Incentive fees	0.00%	[5]	0.00%	[5],[6]	0.00%	[5]	0.00%	[5],[6]
Net investment income (loss) before incentive fees	(8.50%)	[5],[7]	(8.50%)	[5],[6],[7]	(8.80%)	[5],[7]	(8.70%)	[5],[6],[7]
Operating expenses	8.50%	[5]	8.50%	[5],[6]	8.80%	[5]	8.70%	[5],[6]
Incentive fees	0.00%	[5]	0.00%	[5],[6]	0.00%	[5]	0.00%	[5],[6]
Total expenses	8.50%	[5]	8.50%	[5],[6]	8.80%	[5]	8.70%	[5],[6]
Total return:
Total return before incentive fees	3.20%		2.90%	[6]	4.90%		(4.00%)	[6]
Incentive fees	0.00%	[5]	0.00%	[5],[6]	0.00%	[5]	0.00%	[5],[6]
Total return after incentive fees	3.20%		2.90%	[6]	4.90%		(4.00%)	[6]
Net realized and unrealized gains (losses)	50.74	[8]	48.52	[8]	92.29	[8]	(29.48)	[8]
Interest income	$ 0.17		$ 0.05		$ 0.43		$ 0.38
Expenses	$ (8.07)	[9]	$ (9.10)	[9]	$ (27.80)	[9]	$ (28.54)	[9]
Increase (decrease) for the period	42.84		39.47		64.92		(57.64)
Net asset value per unit, beginning of period	1,352.12		1,350.30		1,330.04		1,447.41
Net asset value per unit, end of period	1,394.96		1,389.77		1,394.96		1,389.77

[1] Annualized.

[2] Interest income less total expenses.

[3] Includes clearing fees.

[4] Excludes clearing fees.

[5] Annualized (other than incentive fees).

[6] The ratios are shown net and gross of incentive fees to conform to current period presentation.

[7] Interest income allocated from the Master less total expenses.

[8] Includes Partnership brokerage fees and clearing fees allocated from the Master.

[9] Excludes Partnership brokerage fees and clearing fees allocated from the Master.

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General - Statement of Financial Condition (Parenthetical) (Detail)	Sep. 30, 2012	Dec. 31, 2011
Summary of Investment Holdings [Line Items]
General Partner	265.4926	337.4926
Limited Partners Outstanding units	23,137.2628	29,349.3066
Limited Partner [Member]
Summary of Investment Holdings [Line Items]
General Partner	0.0000	0.0000
Limited Partners Outstanding units	22,899.3596	31,102.0434

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Trading Activities (Tables)

9 Months Ended

Sep. 30, 2012

Gross Fair Values of Derivative Instruments of Futures, Forward and Options Contracts as Separate Assets and Liabilities

the gross fair values of derivative instruments of futures, forward and options contracts as separate assets and liabilities as of September 30, 2012 and December 31, 2011.

Assets	September 30, 2012
Futures Contracts
Energy	$	138,307
Grains		31,394
Indices		26,597
Interest Rates Non-U.S.		285,983
Interest Rates U.S.		79,189
Livestock		8,100
Metals		119,695
Softs		8,545
Total unrealized appreciation on open futures contracts	$	697,810
Liabilities
Futures Contracts
Energy	$	(9,187	)
Grains		(65,035	)
Indices		(280,691	)
Interest Rates Non-U.S.		(19,039	)
Interest Rates U.S.		(25,055	)
Livestock		(17,520	)
Metals		(7,317	)
Softs		(21,468	)
Total unrealized depreciation on open futures contracts	$	(445,312	)
Net unrealized appreciation on open futures contracts	$	252,498	*
Assets
Forward Contracts
Currencies	$	1,615,422
Metals		461,497
Total unrealized appreciation on open forward contracts	$	2,076,919
Liabilities
Forward Contracts
Currencies	$	(1,227,374	)
Metals		(457,159	)
Total unrealized depreciation on open forward contracts	$	(1,684,533	)
Net unrealized appreciation on open forward contracts	$	392,386	**

* This amount is in “Net unrealized appreciation on open futures contracts” on the Master’s Statements of Financial Condition.

** This amount is in “Net unrealized appreciation on open forward contracts” on the Master’s Statements of Financial Condition.

Assets	December 31, 2011
Futures Contracts
Energy	$	120,537
Grains		9,843
Indices		145,602
Interest Rates Non-U.S.		494,099
Interest Rates U.S.		195,796
Livestock		700
Metals		53,895
Softs		45,714
Total unrealized appreciation on open futures contracts	$	1,066,186
Liabilities
Futures Contracts
Energy	$	(22,122	)
Grains		(284,500	)
Indices		(13,348	)
Interest Rates Non-U.S.		(66,339	)
Interest Rates U.S.		(15,441	)
Livestock		(10,930	)
Softs		(61,630	)
Total unrealized depreciation on open futures contracts	$	(474,310	)
Net unrealized appreciation on open futures contracts	$	591,876	*
Assets
Forward Contracts
Currencies	$	1,317,888
Metals		211,388
Total unrealized appreciation on open forward contracts	$	1,529,276
Liabilities
Forward Contracts
Currencies	$	(500,123	)
Metals		(53,214	)
Total unrealized depreciation on open forward contracts	$	(553,337	)
Net unrealized appreciation on open forward contracts	$	975,939	**
*       This amount is in “Net unrealized appreciation on open futures contracts” on the Master’s Statements of Financial Condition. **     This amount is in “Net unrealized appreciation on open forward contracts” on the Master’s Statements of Financial Condition.

Trading Gains and Losses, by Market Sector, on Derivative Instruments

The following table indicates the trading gains and losses, by market sector, on derivative instruments for the three and nine months ended September 30, 2012 and 2011.

	Three Months Ended September 30,						Nine Months Ended September 30,
Sector	2012			2011			2012			2011
Currencies	$	238,122		$	(1,683,768	)	$	(271,416	)	$	(1,166,638	)
Energy		117,288			(552,413	)		720,115			(428,277	)
Grains		718,121			(470,666	)		569,227			(881,655	)
Indices		834,805			(745,242	)		943,831			(2,131,747	)
Interest Rates U.S.		250,328			1,682,966			746,316			2,517,194
Interest Rates Non-U.S.		124,096			3,937,196			1,600,256			3,697,786
Livestock		(177,390	)		(100,880	)		(264,940	)		(249,630	)
Metals		(14,512	)		343,462			(325,329	)		8,029
Softs		(203,400	)		(394,604	)		575,681			(328,864	)
Total	$	1,887,458	***	$	2,016,051	***	$	4,293,741	***	$	1,036,198	***

***  This amount is in “Total trading results” on the Master’s Statements of Income and Expenses and Changes in Partners’ Capital.

XML

General (Tables)

9 Months Ended

Sep. 30, 2012

Statements of Financial Condition

CMF Campbell Master Fund L.P.

Statements of Financial Condition

	(Unaudited) September 30, 2012		December 31, 2011
Assets:
Equity in trading account:
Cash	$	26,713,022	$	34,085,954
Cash margin		5,743,812		4,716,760
Net unrealized appreciation on open futures contracts		252,498		591,876
Net unrealized appreciation on open forward contracts		392,386		975,939
Total assets	$	33,101,718	$	40,370,529
Liabilities and Partners’ Capital:
Liabilities:
Accrued expenses:
Professional fees	$	49,409	$	54,345
Total liabilities		49,409		54,345
Partners’ Capital:
General Partner, 0.0000 Unit equivalents at September 30, 2012 and December 31, 2011		0		0
Limited Partners, 22,899.3596 and 31,102.0434 units outstanding at September 30, 2012 and December 31, 2011, respectively		33,052,309		40,316,184
Total liabilities and partners’ capital	$	33,101,718	$	40,370,529
Net asset value per unit	$	1,443.37	$	1,296.26

Condensed Schedule of Investments

CMF Campbell Master Fund L.P.

Condensed Schedule of Investments

September 30, 2012

(Unaudited)

	Notional ($)/ Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Energy		74	$	130,890			0.40	%
Grains		69		(33,641	)		(0.10	)
Indices		331		(254,094	)		(0.77	)
Interest Rates Non-U.S.		989		271,264			0.82
Interest Rates U.S.		322		54,134			0.16
Metals		45		112,378			0.34
Total futures contracts purchased				280,931			0.85
Futures Contracts Sold
Energy		2		(1,770	)		(0.01	)
Interest Rates Non-U.S.		33		(4,320	)		(0.01	)
Livestock		45		(9,420	)		(0.03	)
Softs		32		(12,923	)		(0.04	)
Total futures contracts sold				(28,433	)		(0.09	)
Unrealized Appreciation on Open Forward Contracts
Currencies	$	153,618,926		1,615,422			4.89
Metals		211		461,497			1.39
Total unrealized appreciation on open forward contracts				2,076,919			6.28
Unrealized Depreciation on Open Forward Contracts
Currencies	$	139,362,724		(1,227,374	)		(3.71	)
Metals		128		(457,159	)		(1.38	)
Total unrealized depreciation on open forward contracts				(1,684,533	)		(5.09	)
Net fair value			$	644,884			1.95	%

CMF Campbell Master Fund L.P.

Condensed Schedule of Investments

December 31, 2011

	Notional ($)/ Number of Contracts		Fair Value			% of Partners’ Capital
Futures Contracts Purchased
Energy		48	$	(533	)		(0.00	)%*
Grains		9		9,843			0.02
Indices		73		94,631			0.24
Interest Rates Non-U.S.		1,131		418,802			1.04
Interest Rates U.S.		185		194,093			0.48
Livestock		7		(2,750	)		(0.01	)
Total futures contracts purchased				714,086			1.77
Futures Contracts Sold
Energy		67		98,948			0.25
Grains		121		(284,500	)		(0.70	)
Indices		77		37,623			0.09
Interest Rates Non-U.S.		29		8,957			0.02
Interest Rates U.S.		123		(13,737	)		(0.03	)
Livestock		9		(7,480	)		(0.02	)
Metals		13		53,895			0.13
Softs		74		(15,916	)		(0.04	)
Total futures contracts sold				(122,210	)		(0.30	)
Unrealized Appreciation on Open Forward Contracts
Currencies	$	86,978,000		1,317,888			3.27
Metals		89		211,388			0.52
Total unrealized appreciation on open forward contracts				1,529,276			3.79
Unrealized Depreciation on Open Forward Contracts
Currencies	$	53,420,743		(500,123	)		(1.24	)
Metals		34		(53,214	)		(0.13	)
Total unrealized depreciation on open forward contracts				(553,337	)		(1.37	)
Net fair value			$	1,567,815			3.89	%

Statements of Income and Expenses and Changes in Partners' Capital

CMF Campbell Master Fund L.P.

Statements of Income and Expenses and Changes in Partners’ Capital

(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Investment Income:
Interest income	$	4,496		$	1,260		$	11,864		$	10,146
Expenses:
Clearing fees		35,758			28,959			96,480			78,686
Professional fees		17,843			11,058			57,175			44,504
Total expenses		53,601			40,017			153,655			123,190
Net investment income (loss)		(49,105	)		(38,757	)		(141,791	)		(113,044	)
Trading Results:
Net gains (losses) on trading of commodity interests:
Net realized gains (losses) on closed contracts		35,724			2,185,528			5,216,672			3,172,922
Change in net unrealized gains (losses) on open contracts		1,851,734			(169,477	)		(922,931	)		(2,136,724	)
Total trading results		1,887,458			2,016,051			4,293,741			1,036,198
Net income (loss)		1,838,353			1,977,294			4,151,950			923,154
Subscriptions — Limited Partners		613,500			1,365,867			1,114,077			13,549,311
Redemptions — Limited Partners		(6,882,649	)		(2,093,191	)		(12,518,038	)		(9,015,200	)
Distribution of interest income to feeder funds		(4,496	)		(1,260	)		(11,864	)		(10,146	)
Net increase (decrease) in Partners’ capital		(4,435,292	)		1,248,710			(7,263,875	)		5,447,119
Partners’ Capital, beginning of period		37,487,601			40,574,401			40,316,184			36,375,992
Partners’ Capital, end of period	$	33,052,309		$	41,823,111		$	33,052,309		$	41,823,111
Net asset value per unit (22,899.3596 and 31,569.1481 units outstanding at September 30, 2012 and 2011, respectively)	$	1,443.37		$	1,324.81		$	1,443.37		$	1,324.81
Net income (loss) per unit*	$	70.83		$	62.93		$	147.54		$	25.82
Weighted average units outstanding		26,778.5546			32,038.1060			28,530.8988			31,825.4520

* Based on change in net asset value per unit.

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Financial Highlights (Tables)

9 Months Ended

Sep. 30, 2012

Changes in the Net Asset Value per Unit

Changes in net asset value per unit for the three and nine months ended September 30, 2012 and 2011 were as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net realized and unrealized gains (losses) allocated from Master*	$	50.74		$	48.52		$	92.29		$	(29.48	)
Interest income allocated from Master		0.17			0.05			0.43			0.38
Expenses **		(8.07	)		(9.10	)		(27.80	)		(28.54	)
Increase (decrease) for the period		42.84			39.47			64.92			(57.64	)
Net asset value per unit, beginning of period		1,352.12			1,350.30			1,330.04			1,447.41
Net asset value per unit, end of period	$	1,394.96		$	1,389.77		$	1,394.96		$	1,389.77

* Includes Partnership brokerage fees and clearing fees allocated from the Master.

** Excludes Partnership brokerage fees and clearing fees allocated from the Master.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011***			2012			2011***
Ratio to average net assets:****
Net investment income (loss)		(8.5	)%		(8.5	)%		(8.8	)%		(8.7	)%
Incentive fees		0	%		0	%		0	%		0	%
Net investment income (loss) before incentive fees*****		(8.5	)%		(8.5	)%		(8.8	)%		(8.7	)%
Operating expenses		8.5	%		8.5	%		8.8	%		8.7	%
Incentive fees		0	%		0	%		0	%		0	%
Total expenses		8.5	%		8.5	%		8.8	%		8.7	%
Total return:
Total return before incentive fees		3.2	%		2.9	%		4.9	%		(4.0	)%
Incentive fees		0	%		0	%		0	%		0	%
Total return after incentive fees		3.2	%		2.9	%		4.9	%		(4.0	)%

*** The ratios are shown net and gross of incentive fees to conform to current period presentation.

**** Annualized (other than incentive fees).

***** Interest income allocated from the Master less total expenses.

The above ratios may vary for individual investors based on the timing of capital transactions during the period. Additionally, these ratios are calculated for the limited partner class using the limited partners’ share of income, expenses and average net assets.

Financial Highlights of the Master:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net realized and unrealized gains (losses)*	$	71.37		$	63.24		$	149.18		$	26.92
Interest income		0.17			0.04			0.43			0.34
Expenses **		(0.71	)		(0.35	)		(2.07	)		(1.44	)
Increase (decrease) for the period		70.83			62.93			147.54			25.82
Distribution of interest income to feeder funds		(0.17	)		(0.04	)		(0.43	)		(0.34	)
Net asset value per unit, beginning of period		1,372.71			1,261.92			1,296.26			1,299.33
Net asset value per unit, end of period	$	1,443.37		$	1,324.81		$	1,443.37		$	1,324.81

* Includes clearing fees.

** Excludes clearing fees.

	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Ratios to Average Net Assets:***
Net investment income (loss)****		(0.5	)%		(0.4	)%		(0.5	)%		(0.4	)%
Operating expenses		0.6	%		0.4	%		0.5	%		0.4	%
Total return		5.2	%		5.0	%		11.4	%		2.0	%

*** Annualized.

**** Interest income less total expenses.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Value of the Partnership's Investments in the Master

	September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Master	$	33,053,682	$	—	$	33,053,682	$	—
Net fair value	$	33,053,682	$	—	$	33,053,682	$	—
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Investment in Master	$	40,316,184	$	—	$	40,316,184	$	—
Net fair value	$	40,316,184	$	—	$	40,316,184	$	—

Derivative Instrument Fair Value based on Hierarchy

	September 30, 2012		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Futures	$	697,810	$	697,810	$	—	$	—
Forwards		2,076,919		461,497		1,615,422		—
Total assets		2,774,729		1,159,307		1,615,422		—
Liabilities
Futures	$	445,312	$	445,312	$	—	$	—
Forwards		1,684,533		457,159		1,227,374		—
Total liabilities		2,129,845		902,471		1,227,374		—
Net fair value	$	644,884	$	256,836	$	388,048	$	—
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets
Futures	$	1,066,186	$	1,066,186	$	—	$	—
Forwards		1,529,276		211,388		1,317,888		—
Total assets		2,595,462		1,277,574		1,317,888		—
Liabilities
Futures	$	474,310	$	474,310	$	—	$	—
Forwards		553,337		53,214		500,123		—
Total liabilities		1,027,647		527,524		500,123		—
Net fair value	$	1,567,815	$	750,050	$	817,765	$	—

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General - Statements of Income and Expenses and Changes in Partners' Capital (Detail) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011		Dec. 31, 2011
Investment Income:
Interest income	$ 4,496		$ 1,260		$ 11,864		$ 10,146
Expenses:
Total expenses	745,395		893,479		2,465,513		2,590,942
Net investment income (loss)	(740,899)		(892,219)		(2,453,649)		(2,580,796)
Net gains (losses) on trading of commodity interests:
Net realized gains (losses) on closed contracts	35,724		2,185,528		5,216,672		3,172,922
Change in net unrealized gains (losses) on open contracts	1,851,734		(169,477)		(922,931)		(2,136,724)
Total trading results	1,887,458		2,016,051		4,293,741		1,036,198
Net income (loss)	1,146,559		1,123,832		1,840,092		(1,544,598)
Subscriptions - Limited Partners	613,500		1,365,867		1,114,077		13,549,311
Redemptions - Limited Partners	(5,238,617)		(891,479)		(9,692,512)		(6,620,319)
Net increase (decrease) in Partners' Capital	(3,578,995)		1,598,220		(6,838,780)		5,384,394
Partners' Capital, beginning of period	36,224,959		39,657,205		39,484,744		35,871,031
Partners' Capital, end of period	32,645,964		41,255,425		32,645,964		41,255,425
Net asset value per unit (23,402.7554 and 29,685.0996 units outstanding at September 30, 2012 and 2011, respectively)	$ 1,394.96		$ 1,389.77		$ 1,394.96		$ 1,389.77		$ 1,330.04
Net income (loss) per unit*	$ 42.84	[1]	$ 39.47	[1]	$ 64.92	[1]	$ (57.64)	[1]
Weighted average units outstanding	25,728.3654		29,672.4321		27,573.9692		28,686.5132
Limited Partner [Member]
Investment Income:
Interest income	4,496		1,260		11,864		10,146
Expenses:
Clearing fees	35,758		28,959		96,480		78,686
Professional fees	17,843		11,058		57,175		44,504
Total expenses	53,601		40,017		153,655		123,190
Net investment income (loss)	(49,105)		(38,757)		(141,791)		(113,044)
Net gains (losses) on trading of commodity interests:
Net realized gains (losses) on closed contracts	35,724		2,185,528		5,216,672		3,172,922
Change in net unrealized gains (losses) on open contracts	1,851,734		(169,477)		(922,931)		(2,136,724)
Total trading results	1,887,458		2,016,051		4,293,741		1,036,198
Net income (loss)	1,838,353		1,977,294		4,151,950		923,154
Subscriptions - Limited Partners	613,500		1,365,867		1,114,077		13,549,311
Redemptions - Limited Partners	(6,882,649)		(2,093,191)		(12,518,038)		(9,015,200)
Distribution of interest income to feeder funds	(4,496)		(1,260)		(11,864)		(10,146)
Net increase (decrease) in Partners' Capital	(4,435,292)		1,248,710		(7,263,875)		5,447,119
Partners' Capital, beginning of period	37,487,601		40,574,401		40,316,184		36,375,992
Partners' Capital, end of period	$ 33,052,309		$ 41,823,111		$ 33,052,309		$ 41,823,111
Net asset value per unit (23,402.7554 and 29,685.0996 units outstanding at September 30, 2012 and 2011, respectively)	$ 1,443.37		$ 1,324.81		$ 1,443.37		$ 1,324.81		$ 1,296.26
Net income (loss) per unit*	$ 70.83	[1]	$ 62.93	[1]	$ 147.54	[1]	$ 25.82	[1]
Weighted average units outstanding	26,778.5546		32,038.1060		28,530.8988		31,825.4520

[1] Based on change in net asset value per unit.

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Trading Activities - Trading Gains and Losses, by Market Sector, on Derivative Instruments (Detail) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Derivative [Line Items]
Trading gains and losses	$ 1,887,458	[1]	$ 2,016,051	[1]	$ 4,293,741	[1]	$ 1,036,198	[1]
Currencies [Member]
Derivative [Line Items]
Trading gains and losses	238,122		(1,683,768)		(271,416)		(1,166,638)
Energy [Member]
Derivative [Line Items]
Trading gains and losses	117,288		(552,413)		720,115		(428,277)
Grains [Member]
Derivative [Line Items]
Trading gains and losses	718,121		(470,666)		569,227		(881,655)
Indices [Member]
Derivative [Line Items]
Trading gains and losses	834,805		(745,242)		943,831		(2,131,747)
Interest Rates U. S. [Member]
Derivative [Line Items]
Trading gains and losses	250,328		1,682,966		746,316		2,517,194
Interest Rates Non - U.S. [Member]
Derivative [Line Items]
Trading gains and losses	124,096		3,937,196		1,600,256		3,697,786
Livestock [Member]
Derivative [Line Items]
Trading gains and losses	(177,390)		(100,880)		(264,940)		(249,630)
Metals [Member]
Derivative [Line Items]
Trading gains and losses	(14,512)		343,462		(325,329)		8,029
Softs [Member]
Derivative [Line Items]
Trading gains and losses	$ (203,400)		$ (394,604)		$ 575,681		$ (328,864)

[1] This amount is in "Total trading results" on the Master's Statements of Income and Expenses and Changes in Partners' Capital.

XML

Statements of Income and Expenses and Changes in Partners' Capital (Unaudited) (Parenthetical)	Sep. 30, 2012	Sep. 30, 2011
Net asset value per unit outstanding	23,402.7554	29,685.0996

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Financial Instrument Risks

9 Months Ended

Sep. 30, 2012

Financial Instrument Risks

5. Financial Instrument Risks:

In the normal course of business, the Partnership, through its investment in the Master, is party to financial instruments with off-balance sheet risk, including derivative financial instruments and derivative commodity instruments. These financial instruments may include forwards, futures, options and swaps, whose values are based upon an underlying asset, index, or reference rate, and generally represent future commitments to exchange currencies or cash balances, or to purchase or sell other financial instruments at specific terms at specified future dates, or, in the case of derivative commodity instruments, to have a reasonable possibility to be settled in cash, through physical delivery or with another financial instrument. These instruments may be traded on an exchange or over-the-counter (“OTC”). Exchange-traded instruments are standardized and include futures and certain forward and option contracts. OTC contracts are negotiated between contracting parties and include swaps and certain forwards and option contracts. Specific market movements of commodities or futures contracts underlying an option cannot accurately be predicated. Each of these instruments is subject to various risks similar to those related to the underlying financial instruments including market and credit risk. In general, the risks associated with OTC contracts are greater than those associated with exchange-traded instruments because of the greater risk of default by the counterparty to an OTC contract. The General Partner estimates that at any given time approximately 21.5% to 40.0 % of the Partnership’s/Master’s contracts are traded OTC.

The risk to the limited partners that have purchased Redeemable Units is limited to the amount of their share of the Partnership’s net assets and undistributed profits. This limited liability is a result of the organization of the Partnership as a limited partnership under New York law.

Market risk is the potential for changes in the value of the financial instruments traded by the Partnership/Master due to market changes, including interest and foreign exchange rate movements and fluctuations in commodity or security prices. Market risk is directly impacted by the volatility and liquidity in the markets in which the related underlying assets are traded. The Partnership/Master is exposed to a market risk equal to the value of futures and forward contracts purchased and unlimited liability on such contracts sold short.

Credit risk is the possibility that a loss may occur due to the failure of a counterparty to perform according to the terms of a contract. The Partnership’s/Master’s risk of loss in the event of a counterparty default is typically limited to the amounts recognized in the Statements of Financial Condition and is not represented by the contract or notional amounts of the instruments. The Partnership’s/Master’s risk of loss is reduced through the use of legally enforceable master netting agreements with counterparties that permit the Partnership/Master to offset unrealized gains and losses and other assets and liabilities with such counterparties upon the occurrence of certain events. The Partnership/Master has credit risk and concentration risk as CGM or a CGM affiliate is the sole counterparty or broker with respect to the Partnership’s/Master’s assets. Credit risk with respect to exchange-traded instruments is reduced to the extent that, through CGM, the Partnership’s/Master’s counterparty is an exchange or clearing organization.

As both a buyer and seller of options, the Partnership/Master pays or receives a premium at the outset and then bears the risk of unfavorable changes in the price of the contract underlying the option. Written options expose the Partnership/Master to potentially unlimited liability; for purchased options, the risk of loss is limited to the premiums paid. Certain written put options permit cash settlement and do not require the option holder to own the reference asset. The Partnership/Master does not consider these contracts to be guarantees.

The General Partner monitors and attempts to control the Partnership’s/Master’s risk exposure on a daily basis through financial, credit and risk management monitoring systems, and accordingly believes that it has effective procedures for evaluating and limiting the credit and market risks to which the Partnership/Master may be subject. These monitoring systems generally allow the General Partner to statistically analyze actual trading results with risk adjusted performance indicators and correlation statistics. In addition, online monitoring systems provide account analysis of futures, forwards and options positions by sector, margin requirements, gain and loss transactions and collateral positions.

The majority of these financial instruments mature within one year of the inception date. However, due to the nature of the Partnership’s/Master’s business, these instruments may not be held to maturity.

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Fair Value Measurements - Value of Partnership's Investment in Master (Detail) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Derivative [Line Items]
Investment in Master	$ 33,053,682	$ 40,316,184
Net fair value	33,053,682	40,316,184
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Derivative [Line Items]
Investment in Master
Net fair value
Significant Other Observable Inputs (Level 2) [Member]
Derivative [Line Items]
Investment in Master	33,053,682	40,316,184
Net fair value	33,053,682	40,316,184
Significant Unobservable Inputs (Level 3) [Member]
Derivative [Line Items]
Investment in Master
Net fair value

XML

General - Condensed Schedule of Investments (Detail) (USD $)	Sep. 30, 2012	Dec. 31, 2011
Schedule of Investments [Line Items]
Investment in Master, at fair value	$ 33,053,682	$ 40,316,184
% of Partners Capital	1.95%	3.89%
Net fair value	644,884	1,567,815
Futures Contracts Purchased [Member]
Schedule of Investments [Line Items]
Investment in Master, at fair value	280,931	714,086
% of Partners Capital	0.85%	1.77%
Futures Contracts Purchased [Member] | Energy [Member]
Schedule of Investments [Line Items]
Number of Contracts	74	48
Investment in Master, at fair value	130,890	(533)
% of Partners Capital	0.40%	0.00%	[1]
Futures Contracts Purchased [Member] | Grains [Member]
Schedule of Investments [Line Items]
Number of Contracts	69	9
Investment in Master, at fair value	(33,641)	9,843
% of Partners Capital	(0.10%)	0.02%
Futures Contracts Purchased [Member] | Indices [Member]
Schedule of Investments [Line Items]
Number of Contracts	331	73
Investment in Master, at fair value	(254,094)	94,631
% of Partners Capital	(0.77%)	0.24%
Futures Contracts Purchased [Member] | Interest Rates Non - U.S. [Member]
Schedule of Investments [Line Items]
Number of Contracts	989	1,131
Investment in Master, at fair value	271,264	418,802
% of Partners Capital	0.82%	1.04%
Futures Contracts Purchased [Member] | Interest Rates U. S. [Member]
Schedule of Investments [Line Items]
Number of Contracts	322	185
Investment in Master, at fair value	54,134	194,093
% of Partners Capital	0.16%	0.48%
Futures Contracts Purchased [Member] | Livestock [Member]
Schedule of Investments [Line Items]
Number of Contracts		7
Investment in Master, at fair value		(2,750)
% of Partners Capital		(0.01%)
Futures Contracts Purchased [Member] | Metals [Member]
Schedule of Investments [Line Items]
Number of Contracts	45
Investment in Master, at fair value	112,378
% of Partners Capital	0.34%
Futures Contracts Sold [Member]
Schedule of Investments [Line Items]
Investment in Master, at fair value	(28,433)	(122,210)
% of Partners Capital	(0.09%)	(0.30%)
Futures Contracts Sold [Member] | Energy [Member]
Schedule of Investments [Line Items]
Number of Contracts	2	67
Investment in Master, at fair value	(1,770)	98,948
% of Partners Capital	(0.01%)	0.25%
Futures Contracts Sold [Member] | Grains [Member]
Schedule of Investments [Line Items]
Number of Contracts		121
Investment in Master, at fair value		(284,500)
% of Partners Capital		(0.70%)
Futures Contracts Sold [Member] | Indices [Member]
Schedule of Investments [Line Items]
Number of Contracts		77
Investment in Master, at fair value		37,623
% of Partners Capital		0.09%
Futures Contracts Sold [Member] | Interest Rates Non - U.S. [Member]
Schedule of Investments [Line Items]
Number of Contracts	33	29
Investment in Master, at fair value	(4,320)	8,957
% of Partners Capital	(0.01%)	0.02%
Futures Contracts Sold [Member] | Interest Rates U. S. [Member]
Schedule of Investments [Line Items]
Number of Contracts		123
Investment in Master, at fair value		(13,737)
% of Partners Capital		(0.03%)
Futures Contracts Sold [Member] | Livestock [Member]
Schedule of Investments [Line Items]
Number of Contracts	45	9
Investment in Master, at fair value	(9,420)	(7,480)
% of Partners Capital	(0.03%)	(0.02%)
Futures Contracts Sold [Member] | Metals [Member]
Schedule of Investments [Line Items]
Number of Contracts		13
Investment in Master, at fair value		53,895
% of Partners Capital		0.13%
Futures Contracts Sold [Member] | Softs [Member]
Schedule of Investments [Line Items]
Number of Contracts	32	74
Investment in Master, at fair value	(12,923)	(15,916)
% of Partners Capital	(0.04%)	(0.04%)
Unrealized Appreciation On Open Forward Contracts [Member]
Schedule of Investments [Line Items]
Unrealized Appreciation on Open Forward Contracts	2,076,919	1,529,276
% of Partners Capital	6.28%	3.79%
Unrealized Appreciation On Open Forward Contracts [Member] | Metals [Member]
Schedule of Investments [Line Items]
Number of Contracts	211	89
Unrealized Appreciation on Open Forward Contracts	461,497	211,388
% of Partners Capital	1.39%	0.52%
Unrealized Appreciation On Open Forward Contracts [Member] | Currencies [Member]
Schedule of Investments [Line Items]
Unrealized Appreciation on Open Forward Contracts	1,615,422	1,317,888
% of Partners Capital	4.89%	3.27%
Investment Owned, Balance, Principal Amount	153,618,926	86,978,000
Unrealized Depreciation On Open Forward Contracts [Member]
Schedule of Investments [Line Items]
Unrealized Depreciation on Open Forward Contracts	(1,684,533)	(553,337)
% of Partners Capital	(5.09%)	(1.37%)
Unrealized Depreciation On Open Forward Contracts [Member] | Metals [Member]
Schedule of Investments [Line Items]
Number of Contracts	128	34
Unrealized Depreciation on Open Forward Contracts	(457,159)	(53,214)
% of Partners Capital	(1.38%)	(0.13%)
Unrealized Depreciation On Open Forward Contracts [Member] | Currencies [Member]
Schedule of Investments [Line Items]
Unrealized Depreciation on Open Forward Contracts	(1,227,374)	(500,123)
% of Partners Capital	(3.71%)	(1.24%)
Investment Owned, Balance, Principal Amount	$ 139,362,724	$ 53,420,743

[1] Due to rounding.