2.4.0.8060400 - Disclosure - Financial Instrumentstruefalsefalse1falsefalsefalsec20130101to20130630http://www.sec.gov/CIK0001169749duration2013-01-01T00:00:002013-06-30T00:00:001true1us-gaap_InvestmentsAllOtherInvestmentsAbstractus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalse1falsefalsefalse00falsefalsefalsexbrli:stringItemTypestringfalse02false2us-gaap_FinancialInstrumentsDisclosureTextBlockus-gaap_truenadurationfalsefalsefalsefalsefalsefalsefalsefalseverboseLabel1falsefalsefalse00<div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt;">4.  <u>Financial Instruments</u></div><div style="text-align: justify; font-family: Times New Roman; color: #000000; font-size: 12pt; margin-right: 12pt;"> </div><div style="text-align: justify; font-family: Times New Roman; color: #000000; font-size: 12pt; margin-right: 12pt;"><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">The Partnership trades Futures Interests.  Futures and forwards represent contracts for delayed delivery of an instrument at a specified date and price.  Futures Interests are open commitments until settlement date, at which time they are realized.  They are valued at fair value, generally on a daily basis, and the unrealized gains and losses on open contracts (the difference between contract trade price and market price) are reported in the Statements of Financial Condition as a net unrealized gain or loss on open </font><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">contracts.  The resulting net change in unrealized gains and losses is reflected in the "Net change in unrealized" trading profit (loss) on open contracts from one period to the next on the Statements of </font><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">Income and Expenses.  The fair value of exchange-traded futures, options and forward contracts is determined by the various futures exchanges, and reflects the settlement price for each contract as of the close of business on the last business day of the reporting period.</font></div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"> </div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 12pt;">The fair value of foreign currency forward contracts is extrapolated on a forward basis from the spot prices quoted as of approximately 3:00 P.M. (E.T.) of the last business day of the reporting period from various exchanges.  The fair value of non-exchange-traded foreign currency option contracts is calculated by applying an industry standard model application for options valuation of foreign currency options, using as input the spot prices, interest rates, and option implied volatilities quoted as of approximately 3:00 P.M. (E.T.) on the last business day of the reporting period.  Risk arises from changes in the value of these contracts and the potential inability of counterparties to perform under the terms of the contracts.  There are numerous factors which may significantly influence the fair value of these contracts, including interest rate volatility.</div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; font-family: Times New Roman; color: #000000; font-size: 12pt; margin-right: 12pt;"><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">The Partnership may buy or write put and call options through listed exchanges and the over-the-counter market.  The buyer of an option has the right to purchase (in the case of a call option) or sell (in the case of a put option) a specified quantity of a specific Futures Interest on the underlying assets at a specified price prior to or on a specified expiration date.  The writer of an option is exposed to the risk of loss if the fair value of the Futures Interest on the underlying asset declines (in the case of a put option) or increases (in </font><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">the case of a call option).  The writer of an option can never profit by more than the premium paid by the buyer but can potentially lose an unlimited amount.</font></div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"> </div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 12pt;">Premiums received/premiums paid from writing/purchasing options are recorded as liabilities/assets on the Statements of Financial Condition and are subsequently adjusted to fair values.  The difference between the fair value of the option and the premiums received/premiums paid is treated as an unrealized gain or loss within the Statements of Income and Expenses.</div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; font-family: Times New Roman; color: #000000; font-size: 12pt; margin-right: 12pt;"><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">The fair value of exchange-traded contracts is based on the settlement price quoted by the exchange on the day with respect to which fair value is being determined.  If an exchange-traded contract could not have </font><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">been liquidated on such day due to the operation of daily limits or other rules of the exchange, the settlement price will be equal to the settlement price on the first subsequent day on which the contract could be liquidated.   The fair value of off-exchange-traded contracts is based on the fair value quoted by the counterparty.</font></div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 9.6pt;">The Partnership's contracts are accounted for on a trade-date basis.  The Partnership accounts for its derivative investments as described in Note 5. <u>Derivatives and Hedging</u> as required by the Financial Accounting Standards Board ("FASB") <font style="font-style: italic;">Accounting Standards Codification </font>("ASC").  A derivative is defined as a financial instrument or other contract that has all three of the following characteristics:</div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 9.6pt;"> </div><div><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 36pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: top; align: right;"><div style="text-align: left; color: #000000; margin-left: 18pt;">1)</div></td><td style="width: auto; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: top;"><div style="text-align: justify; color: #000000;">a) One or more "underlyings" and b) one or more "notional amounts" or payment provisions or both;</div><div style="text-align: justify; color: #000000;"> </div></td></tr></table></div><div><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 36pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: top; align: right;"><div style="text-align: left; color: #000000; margin-left: 18pt;">2)</div></td><td style="width: auto; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: top;"><div style="text-align: justify; color: #000000;">Requires no initial net investment or a smaller initial net investment than would be required for other types of contracts that would be expected to have a similar response relative to changes in market factors; and</div><div style="text-align: justify; color: #000000;"> </div></td></tr></table></div><div><table cellpadding="0" cellspacing="0" class="DSPFListTable" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 36pt; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: top; align: right;"><div style="text-align: left; color: #000000; margin-left: 18pt;">3)</div></td><td style="width: auto; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: top;"><div style="text-align: justify; color: #000000;">Terms that require or permit net settlement.</div></td></tr></table></div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 9.6pt;">Generally, derivatives include futures, forward, swaps or options contracts, and other financial instruments with similar characteristics such as caps, floors, and collars.</div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 12pt;">The net unrealized gains (losses) on open contracts, reported as a component of "Trading Equity" on the Statements of Financial Condition, and their longest contract maturities were as follows:</div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 12pt;"> </div><table cellpadding="0" cellspacing="0" style="width: 100%; font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><tr><td style="width: 16.27%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div> </div></td><td colspan="3" style="border-bottom: black 2px solid; width: 46.99%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Net Unrealized Gains/(Losses) on Open Contracts</div></td><td colspan="2" style="border-bottom: black 2px solid; width: 36.74%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Longest Maturities</div></td></tr><tr><td style="border-bottom: black 2px solid; width: 16.27%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: left; color: #000000;">Date</div></td><td style="border-bottom: black 2px solid; width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Exchange-Traded</div></td><td style="border-bottom: black 2px solid; width: 18.3%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;"> Off-Exchange-Traded</div></td><td style="border-bottom: black 2px solid; width: 11.53%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Total</div></td><td style="border-bottom: black 2px solid; width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Exchange-Traded</div></td><td style="border-bottom: black 2px solid; width: 19.57%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Off-Exchange-Traded</div></td></tr><tr><td style="width: 16.27%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div> </div></td><td style="width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">$</div></td><td style="width: 18.3%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">$</div></td><td style="width: 11.53%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">$</div></td><td style="width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div> </div></td><td style="width: 19.57%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div> </div></td></tr><tr style="height: 13px;"><td style="background-color: #cceeff; width: 16.27%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: left; color: #000000;">Jun. 30, 2013</div></td><td style="background-color: #cceeff; width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">(1,534,184)</div></td><td style="background-color: #cceeff; width: 18.3%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">(441,507)</div></td><td style="background-color: #cceeff; width: 11.53%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; text-indent: 3.55pt; color: #000000;">(1,975,691)</div></td><td style="background-color: #cceeff; width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Sep. 2014</div></td><td style="background-color: #cceeff; width: 19.57%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Sep. 2013</div></td></tr><tr><td style="background-color: #ffffff; width: 16.27%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: left; color: #000000;">Dec. 31, 2012</div></td><td style="background-color: #ffffff; width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">(2,010,679)</div></td><td style="background-color: #ffffff; width: 18.3%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">905,178</div></td><td style="background-color: #ffffff; width: 11.53%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">(1,105,501)</div></td><td style="background-color: #ffffff; width: 17.16%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Sep. 2014</div></td><td style="background-color: #ffffff; width: 19.57%; font-family: 'Times New Roman', Times, serif; font-size: 10pt; vertical-align: bottom;"><div style="text-align: center; color: #000000;">Mar. 2013</div></td></tr></table><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; margin-right: 12pt;"><font style="font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt;">In general, the risks associated with off-exchange-traded contracts are greater than those associated with exchange-traded contracts because of the greater risk of default by the counterparty to an off-exchange-traded contract.  The Partnership has credit risk associated with counterparty nonperformance.  As of the date of the financial statements, the credit risk associated with the instruments in which the Partnership trades is limited to the unrealized gains (losses) amounts reflected in the Partnership's Statements of Financial Condition.  The </font>net unrealized gains (losses) on open contracts are further disclosed gross by type of contract and corresponding fair value level in Note 6. <u>Fair Value Measurements and Disclosures</u>.</div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; margin-right: 12pt;"><font style="font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt;">The Partnership also has credit risk because MS&Co. acts as the futures commission merchant or the counterparty with respect to most of the Partnership's assets. Exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts are fair valued on a daily basis, with variations in value settled on a daily basis. MS&Co. which is acting as a commodity futures broker for the Partnership's exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, is required, pursuant to regulations of the Commodity Futures Trading Commission ("CFTC"), to segregate from its own assets, and for the sole benefit of its commodity customers, total cash held by it with respect to exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, including an amount equal to the net unrealized losses on all open exchange-traded futures, exchange-traded forward, and exchange-traded futures-styled options contracts, which in the aggregate, totaled $42,491,342 and $43,297,414 at June 30, 2013, and December 31, 2012, respectively.  With respect to the Partnership's off-exchange-traded forward currency contracts and forward currency options contracts, there are no daily settlements of variation in value, nor is there any requirement that an amount equal to the net unrealized gains (losses) on such contracts be segregated.  However, the Partnership is required to meet margin requirements equal to the net unrealized loss on open forward currency contracts in the Partnership accounts with the counterparty, which is accomplished by daily maintenance of the cash balance in a custody account held </font>at MS&Co. for the benefit of MS&Co.  With respect to those off-exchange-traded forward currency contracts, the Partnership is at risk to the ability of MS&Co., the sole counterparty on all such contracts, to perform.  The Partnership has a master netting agreement with MS&Co.  The primary terms are based on industry standard master agreements.  This agreement, which seeks to reduce both the Partnership's and the MS&Co.'s exposure on off-exchange-traded forward currency contracts, including options on such contracts, should materially decrease the Partnership's credit risk in the event of MS&Co.'s bankruptcy or insolvency.</div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt; margin-right: 12pt;">The General Partner monitors and attempts to control the Partnership'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 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.</div><div style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;"><br /></div><div style="text-align: justify; margin-right: 12pt;"><font style="font-family: 'Times New Roman', Times, serif; color: #000000; font-size: 10pt;">The futures, forwards and options traded by the Partnership involve varying degrees of related market risk.  Market risk is often dependent upon changes in the level or volatility of interest rates, exchange rates, and </font><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">prices of financial instruments and commodities, factors that result in frequent changes in the fair value of the </font><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">Partnership's open positions, and consequently in its earnings, whether realized or unrealized, and cash flow.  Gains and losses on open positions of exchange-traded futures, exchange-traded forward, and </font><font style="font-family: 'Times New Roman', Times, serif; font-size: 10pt;">exchange-traded futures-styled options contracts are settled daily through variation margin.  Gains and losses on off-exchange-traded forward currency contracts are settled upon termination of the contract.  Gains and losses on off-exchange-traded forward currency options contracts are settled on an agreed-upon settlement date.</font></div></div>falsefalsefalsenonnum:textBlockItemTypenaThe entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures.No definition available.false0falseFinancial InstrumentsUnKnownUnKnownUnKnownUnKnowntruefalsefalseSheethttp://stanleymorgan.com/role/FinancialInstruments12