5. Trading Activities

The Partnership’s objective is to profit from speculative trading in Futures Interests. Therefore, the Trading Advisor for the Partnership will take speculative positions in Futures Interests where it feels the best profit opportunities exist for its trading strategy. As such, the average number of contracts outstanding in absolute quantities (the total of the open long and open short positions) has been presented as a part of the volume disclosure, as position direction is not an indicative factor in such volume disclosures.

All of the commodity interest owned by the Partnership are held for trading purposes. The monthly average number of futures contracts traded during the three months ended March 31, 2016 and 2015 were 924 and 1,373, respectively. The month average of commodity forward contracts traded during the three months ended March 31, 2016 and 2015 were 245 and 360, respectively. The average notional value of currency forward contracts during the three months ended March 31, 2016 and 2015 was $233,240,803 and $300,996,370, respectively.

The following tables summarize the gross and net amounts recognized relating to the assets and liabilities of the Partnership’s derivative instruments and transactions eligible for offset subject to master netting agreements or similar agreements as of March 31, 2016 and December 31, 2015, respectively.


			Gross Amounts		Amounts
			Offset in the		Presented in the		Gross Amounts Not Offset in the
	Gross		Statements of		Statements of		Statements of Financial Condition
	Amounts		Financial		Financial		Financial		Cash Collateral
March 31, 2016	Recognized		Condition		Condition		Instruments		Received/Pledged*		Net Amount
Assets
Futures	$	566,916	$	(187,609)	$	379,307	$	-	$	-	$	379,307
Forwards		1,366,917		(1,363,598)		3,319		-		-		3,319

Total assets	$	1,933,833	$	(1,551,207)	$	382,626	$	-	$	-	$	382,626

Liabilities
Futures	$	(187,609)	$	187,609	$	-	$	-	$	-	$	-
Forwards		(1,363,598)		1,363,598		-		-		-		-

Total liabilities	$	(1,551,207)	$	1,551,207	$	-	$	-	$	-	$	-

Net fair value											$	382,626	*


			Gross Amounts		Amounts
			Offset in the		Presented in the		Gross Amounts Not Offset in the
	Gross		Statements of		Statements of		Statements of Financial Condition
	Amounts		Financial		Financial		Financial		Cash Collateral
December 31, 2015	Recognized		Condition		Condition		Instruments		Received/Pledged*		Net Amount
Assets
Futures	$	269,891	$	(269,891)	$	-	$	-	$	-	$	-
Forwards		1,264,408		(1,264,408)		-		-		-		-

Total assets	$	1,534,299	$	(1,534,299)	$	-	$	-	$	-	$	-

Liabilities
Futures	$	(460,830)	$	269,891	$	(190,939)	$	-	$	-	$	(190,939)
Forwards		(1,322,225)		1,264,408		(57,817)		-		-		(57,817)

Total liabilities	$	(1,783,055)	$	1,534,299	$	(248,756)	$	-	$	-	$	(248,756)

Net fair value											$	(248,756)	*

In the event of default by the Partnership, MS&Co., the Partnership’s commodity futures broker and/or the sole counterparty to the Partnership’s off-exchange-traded contracts, as applicable, has the right to offset the Partnership’s obligation with the Partnership’s cash and/or U.S. Treasury bills held by MS&Co., thereby minimizing MS&Co.’s risk of loss. There is no collateral posted by MS&Co. and as such, in the event of default by MS&Co., the Partnership is exposed to the amount shown in the Statements of Financial Condition. In the case of exchange-traded contracts, the Partnership’s exposure to counterparty risk may be reduced since the exchange’s clearinghouse interposes its credit between buyer and seller and the clearinghouse’s guarantee fund may be available in the event of a default.

The following tables indicate the Partnership’s gross fair values of derivative instruments of futures and forward contracts as separate assets and liabilities as of March 31, 2016 and December 31, 2015, respectively.


	March 31, 2016
Assets
Futures Contracts
Commodity	$	159,359
Equity		102,141
Interest rate		305,416

Total unrealized appreciation on open futures contracts		566,916

Liabilities
Futures Contracts
Commodity		(78,364)
Equity		(64,023)
Interest rate		(45,222)

Total unrealized depreciation on open futures contracts		(187,609)

Net unrealized appreciation on open futures contracts	$	379,307	*


Assets
Forward Contracts
Commodity	$	55,289
Foreign currency		1,311,628

Total unrealized appreciation on open forward contracts		1,366,917

Liabilities
Forward Contracts
Commodity		(44,741)
Foreign currency		(1,318,857)

Total unrealized depreciation on open forward contracts		(1,363,598)

Net unrealized appreciation on open forward contracts	$	3,319	**

This amount is included in “Net unrealized appreciation on open futures contracts” in the Statements of Financial Condition.

This amount is included in “Net unrealized appreciation on open forward contracts” in the Statements of Financial Condition.


	December 31, 2015
Assets
Futures Contracts
Commodity	$	175,711
Equity		26,772
Interest rate		67,407

Total unrealized appreciation on open futures contracts		269,890

Liabilities
Futures Contracts
Commodity		(351,218)
Equity		(40,237)
Interest rate		(69,374)

Total unrealized depreciation on open futures contracts		(460,829)

Net unrealized depreciation on open futures contracts	$	(190,939)	*


Assets
Forward Contracts
Commodity	$	26,107
Foreign currency		1,238,301

Total unrealized appreciation on open forward contracts		1,264,408

Liabilities
Forward Contracts
Commodity		(135,773)
Foreign currency		(1,186,452)

Total unrealized depreciation on open forward contracts		(1,322,225)

Net unrealized depreciation on open forward contracts	$	(57,817)	**

*	This amount is included in “Net unrealized depreciation on open futures contracts” in the Statements of Financial Condition.

**	This amount is included in “Net unrealized depreciation on open forward contracts” in the Statements of Financial Condition.

The following table indicates the trading gains and losses, by market sector, on derivative instruments for the three months ended March 31, 2016 and 2015, respectively.


	Three Months Ended
	March 31,
Sector	2016			2015
Commodity	$	(484,450)		$	110,109
Equity		(198,923)			761,162
Foreign currency		277,766			803,465
Interest rate		617,900			951,232

Total	$	212,293	*	$	2,625,968	*

*	This amount is included in “Total trading results” in the Statements of Income and Expenses.