Note 9. TRADING ACTIVITIES AND RELATED RISKS

The Fund engages in the speculative trading of U.S. and foreign futures contracts and forward currency contracts (collectively, “derivatives”). Specifically, the Fund trades a portfolio focused on futures and forward contracts, which are instruments designed to hedge changes in interest rates, currency exchange rates, stock index values, metals, energy and agriculture values. The Fund is exposed to both market risk, the risk arising from changes in the fair value of the contracts, and credit risk, the risk of failure by another party to perform according to the terms of a contract.

Market Risk

For derivatives, risks arise from changes in the fair value of the contracts. Market movements result in frequent changes in the fair value of the Fund’s open positions and, consequently, in its earnings and cash flow. The Fund’s market risk is influenced by a wide variety of factors, including the level and volatility of exchange rates, interest rates, equity price levels, the fair value of financial instruments and contracts, the diversification effects among the Fund’s open positions and the liquidity of the markets in which it trades. Theoretically, the Fund is exposed to a market risk equal to the notional contract value of futures and forward currency contracts purchased and unlimited liability on such contracts sold short. See Note 1.C. for an explanation of how the Fund determines its valuation for derivatives as well as the netting of derivatives.

The Fund adopted the provisions of ASC 815, Derivatives and Hedging, (“ASC 815”). ASC 815 provides enhanced disclosures about how and why an entity uses derivative instruments, how derivative instruments are accounted for, and how derivative instruments affect an entity’s financial position, financial performance and cash flows.

The following tables summarize quantitative information required by ASC 815. The fair value of the Fund’s derivatives by instrument type, as well as the location of those instruments on the Statements of Financial Condition, as of December 31, 2018 and 2017 is as follows:

Type of Instrument *	Statements of Financial Condition Location	Asset Derivatives at December 31, 2018 Fair Value		Liability Derivatives at December 31, 2018 Fair Value			Net
Agriculture Contracts	Net unrealized gain (loss) on open futures contracts	$	1,930,551	$	(34,165	)	$	1,896,386
Energy Contracts	Net unrealized gain (loss) on open futures contracts		577,340		(902,016	)		(324,676	)
Metal Contracts	Net unrealized gain (loss) on open futures contracts		2,645,961		(1,905,242	)		740,719
Stock Indices Contracts	Net unrealized gain (loss) on open futures contracts		727,473		(731,682	)		(4,209	)
Short-Term Interest Rate Contracts	Net unrealized gain (loss) on open futures contracts		1,094,862		(16,160	)		1,078,702
Long-Term Interest Rate Contracts	Net unrealized gain (loss) on open futures contracts		1,313,742		(1,278,601	)		35,141
Forward Currency Contracts	Net unrealized gain (loss) on open forward currency contracts		12,839,236		(8,162,834	)		4,676,402
Totals		$	21,129,165	$	(13,030,700	)	$	8,098,465

*	Derivatives not designated as hedging instruments under ASC 815

Type of Instrument *	Statements of Financial Condition Location	Asset Derivatives at December 31, 2017 Fair Value		Liability Derivatives at December 31, 2017 Fair Value			Net
Agriculture Contracts	Net unrealized gain (loss) on open futures contracts	$	1,818,426	$	(149,358	)	$	1,669,068
Energy Contracts	Net unrealized gain (loss) on open futures contracts		2,109,057		(1,007,528	)		1,101,529
Metal Contracts	Net unrealized gain (loss) on open futures contracts		3,286,448		(1,313,045	)		1,973,403
Stock Indices Contracts	Net unrealized gain (loss) on open futures contracts		3,234,375		(1,296,601	)		1,937,774
Short-Term Interest Rate Contracts	Net unrealized gain (loss) on open futures contracts		262,561		(245,676	)		16,885
Long-Term Interest Rate Contracts	Net unrealized gain (loss) on open futures contracts		432,750		(2,794,166	)		(2,361,416	)
Forward Currency Contracts	Net unrealized gain (loss) on open forward currency contracts		8,539,995		(6,988,482	)		1,551,513
Totals		$	19,683,612	$	(13,794,856	)	$	5,888,756

*	Derivatives not designated as hedging instruments under ASC 815

The trading gains and losses of the Fund’s derivatives by instrument type, as well as the location of those gains and losses on the Statements of Operations, for the years ended December 31, 2018, 2017 and 2016 is as follows:

Type of Instrument	Trading Gains/(Losses) for the Year Ended December 31, 2018			Trading Gains/(Losses) for the Year Ended December 31, 2017			Trading Gains/(Losses) for the Year Ended December 31, 2016
Agriculture Contracts	$	(5,771,645	)	$	(11,531,115	)	$	(13,356,428	)
Energy Contracts		6,250,244			(6,159,544	)		(28,402,841	)
Metal Contracts		(6,296,571	)		32,529			(13,161,193	)
Stock Indices Contracts		(21,337,033	)		67,385,104			2,224,293
Short-Term Interest Rate Contracts		4,514,708			(2,171,497	)		(3,042,015	)
Long-Term Interest Rate Contracts		146,933			(11,990,475	)		20,940,454
Forward Currency Contracts		6,987,480			(17,079,419	)		(3,935,336	)
Total	$	(15,505,884	)	$	18,485,583		$	(38,733,066	)

Line Item in the Statements of Operations	Trading Gains/(Losses) for the Year Ended December 31, 2018			Trading Gains/(Losses) for the Year Ended December 31, 2017			Trading Gains/(Losses) for the Year Ended December 31, 2016
Futures trading gains (losses):
Realized**	$	(21,578,184	)	$	33,125,198		$	(44,786,874	)
Change in unrealized		(915,180	)		2,439,804			9,989,144
Forward currency trading gains (losses):
Realized		3,862,591			(15,599,266	)		(5,536,450	)
Change in unrealized		3,124,889			(1,480,153	)		1,601,114
Total	$	(15,505,884	)	$	18,485,583		$	(38,733,066	)

**	Amounts differ from the amounts on the Statements of Operations as the amounts above do not include gains and losses on foreign currency cash balances at the futures brokers.

For the years ended December 31, 2018, 2017 and 2016, the monthly average of futures contracts bought and sold was approximately 21,400, 29,700 and 51,500, respectively, and the monthly average of notional value of forward currency contracts was $1,062,700,000, $1,238,000,000 and $2,607,000,000, respectively.

Open contracts generally mature within three months; as of December 31, 2018, the latest maturity date for open futures contracts is March 2020 and the latest maturity date for open forward currency contracts is March 2019. However, the Fund intends to close all futures and offset all forward currency contracts prior to maturity.

Credit Risk

The Fund trades futures contracts on exchanges that require margin deposits with the futures brokers. Additional deposits may be necessary for any loss on contract value. The Commodity Exchange Act requires a futures broker to segregate all customer transactions and assets from such futures broker’s proprietary activities. A customer’s cash and other property (for example, U.S. Treasury Bills) deposited with a futures broker are considered commingled with all other customer funds subject to the futures broker’s segregation requirements. In the event of a futures broker’s insolvency, recovery may be limited to a pro rata share of segregated funds available. It is possible that the recovered amount could be less than total cash and other property deposited.

The Fund trades forward currency contracts in unregulated markets between principals and assumes the risk of loss from counterparty nonperformance. Accordingly, the risks associated with forward currency contracts are generally greater than those associated with exchange traded contracts because of the greater risk of counterparty default. Additionally, the trading of forward currency contracts typically involves delayed cash settlement.

The Fund has a portion of its assets on deposit with PNC Bank. In the event of a financial institution’s insolvency, recovery of the Fund’s assets on deposit may be limited to account insurance or other protection afforded such deposits.

The Fund has entered into ISDA Agreements with UBS AG and NatWest. Under the terms of each ISDA Agreement, upon the designation of an Event of Default, as defined in each ISDA Agreement, the non-defaulting party may set-off any sum or obligation owed by the defaulting party to the non-defaulting party against any sum or obligation owed by the non-defaulting party to the defaulting party. If any sum or obligation is unascertained, the non-defaulting party may in good faith estimate that sum or obligation and set-off in respect to that estimate, accounting to the other party when such sum or obligation is ascertained.

Under the terms of each master netting agreement with UBS Securities and Goldman, upon occurrence of a default by the Fund, as defined in respective account documents, UBS Securities and Goldman have the right to close out any or all open contracts held in the Fund’s account; sell any or all of the securities held; and borrow or buy any securities, contracts or other property for the Fund’s account. The Fund would be liable for any deficiency in its account resulting from such transactions.

The amount of required margin and good faith deposits with the futures brokers and interbank market makers usually range from 10% to 30% of Net Asset Value. The fair value of securities held to satisfy such requirements at December 31, 2018 and December 31, 2017 was $30,663,072 and $54,020,003, respectively, which equals approximately 16% and 20% of Net Asset Value, respectively. The cash deposited with the interbank market makers at December 31, 2018 and December 31, 2017 was $11,033,052 and $186,271, respectively, which equals approximately 6% and 0% of Net Asset Value, respectively. These amounts are included in cash and cash equivalents. Included in cash deposits with the futures brokers and interbank market makers at December 31, 2018 and December 31, 2017 was restricted cash for margin requirements of $4,424,114 and $409,892, respectively, which equals approximately 2% and 0% of Net Asset Value, respectively.

Set forth below are tables which disclose both gross information and net information about instruments and transactions eligible for offset in the Statements of Financial Condition and instruments and transactions that are subject to a master netting agreement as well as amounts related to financial collateral (including U.S. Treasury Bills and cash collateral) held at clearing brokers and counterparties. Margin reflected in the collateral tables is limited to the net amount of unrealized loss at each counterparty. Actual margin amounts required at each counterparty are based on the notional amounts or the number of contracts outstanding and may exceed the margin presented in the collateral tables.

Offsetting of Derivative Assets by Counterparty
As of December 31, 2018
Type of Instrument	Counterparty	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Financial Condition			Net Amounts of Unrealized Gain Presented in the Statements of Financial Condition
Futures contracts	UBS Securities LLC	$	4,153,364	$	(2,429,240	)	$	1,724,124
Futures contracts	Goldman Sachs		4,136,565		(2,438,626	)		1,697,939
Total futures contracts			8,289,929		(4,867,866	)		3,422,063
Forward currency contracts	UBS AG		6,419,618		(4,081,417	)		2,338,201
Forward currency contracts	NatWest Markets PLC		6,419,618		(4,081,417	)		2,338,201
Total forward currency contracts			12,839,236		(8,162,834	)		4,676,402
Total derivatives		$	21,129,165	$	(13,030,700	)	$	8,098,465

Derivative Assets and Collateral Received by Counterparty
As of December 31, 2018
	Net Amounts of Unrealized Gain in the Statements of Financial Condition		Gross Amounts Not Offset in the Statements of Financial Condition
Counterparty			Financial Instruments		Cash Collateral Received		Net Amount
UBS Securities LLC	$	1,724,124	$	0	$	0	$	1,724,124
Goldman Sachs		1,697,939		0		0		1,697,939
UBS AG		2,338,201		0		0		2,338,201
NatWest Markets PLC		2,338,201		0		0		2,338,201
Total	$	8,098,465	$	0	$	0	$	8,098,465

Offsetting of Derivative Liabilities by Counterparty
As of December 31, 2018
Type of Instrument	Counterparty	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Financial Condition			Net Amounts of Unrealized Loss Presented in the Statements of Financial Condition
Futures contracts	UBS Securities LLC	$	2,429,240	$	(2,429,240	)	$	0
Futures contracts	Goldman Sachs		2,438,626		(2,438,626	)		0
Total futures contracts			4,867,866		(4,867,866	)		0
Forward currency contracts	UBS AG		4,081,417		(4,081,417	)		0
Forward currency contracts	NatWest Markets PLC		4,081,417		(4,081,417	)		0
Total forward currency contracts			8,162,834		(8,162,834	)		0
Total derivatives		$	13,030,700	$	(13,030,700	)	$	0

Derivative Liabilities and Collateral Pledged by Counterparty
As of December 31, 2018
	Net Amounts of Unrealized Loss in the Statements of Financial Condition		Gross Amounts Not Offset in the Statements of Financial Condition
Counterparty			Financial Instruments		Cash Collateral Pledged		Net Amount
UBS Securities LLC	$	0	$	0	$	0	$	0
Goldman Sachs		0		0		0		0
UBS AG		0		0		0		0
NatWest Markets PLC		0		0		0		0
Total	$	0	$	0	$	0	$	0

Offsetting of Derivative Assets by Counterparty
As of December 31, 2017
Type of Instrument	Counterparty	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Financial Condition			Net Amounts of Unrealized Gain Presented in the Statements of Financial Condition
Futures contracts	UBS Securities LLC	$	5,564,291	$	(3,407,630	)	$	2,156,661
Futures contracts	Goldman Sachs		5,579,326		(3,398,744	)		2,180,582
Total futures contracts			11,143,617		(6,806,374	)		4,337,243
Forward currency contracts	UBS AG		4,269,997		(3,494,241	)		775,756
Forward currency contracts	NatWest Markets PLC		4,269,998		(3,494,241	)		775,757
Total forward currency contracts			8,539,995		(6,988,482	)		1,551,513
Total derivatives		$	19,683,612	$	(13,794,856	)	$	5,888,756

Derivative Assets and Collateral Received by Counterparty
As of December 31, 2017
	Net Amounts of Unrealized Gain in the Statements of Financial Condition		Gross Amounts Not Offset in the Statements of Financial Condition
Counterparty			Financial Instruments		Cash Collateral Received		Net Amount
UBS Securities LLC	$	2,156,661	$	0	$	0	$	2,156,661
Goldman Sachs		2,180,582		0		0		2,180,582
UBS AG		775,756		0		0		775,756
NatWest Markets PLC		775,757		0		0		775,757
Total	$	5,888,756	$	0	$	0	$	5,888,756

Offsetting of Derivative Liabilities by Counterparty
As of December 31, 2017
Type of Instrument	Counterparty	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Financial Condition			Net Amounts of Unrealized Loss Presented in the Statements of Financial Condition
Futures contracts	UBS Securities LLC	$	3,407,630	$	(3,407,630	)	$	0
Futures contracts	Goldman Sachs		3,398,744		(3,398,744	)		0
Total futures contracts			6,806,374		(6,806,374	)		0
Forward currency contracts	UBS AG		3,494,241		(3,494,241	)		0
Forward currency contracts	NatWest Markets PLC		3,494,241		(3,494,241	)		0
Total forward currency contracts			6,988,482		(6,988,482	)		0
Total derivatives		$	13,794,856	$	(13,794,856	)	$	0

Derivative Liabilities and Collateral Pledged by Counterparty
As of December 31, 2017
	Net Amounts of Unrealized Loss in the Statements of Financial Condition		Gross Amounts Not Offset in the Statements of Financial Condition
Counterparty			Financial Instruments		Cash Collateral Pledged		Net Amount
UBS Securities LLC	$	0	$	0	$	0	$	0
Goldman Sachs		0		0		0		0
UBS AG		0		0		0		0
NatWest Markets PLC		0		0		0		0
Total	$	0	$	0	$	0	$	0

Campbell & Company has established procedures to actively monitor market risk and minimize credit risk, although there can be no assurance that it will, in fact, succeed in doing so. Campbell & Company’s basic market risk control procedures consist of continuously monitoring open positions, diversification of the portfolio and maintenance of a margin-to-equity ratio that rarely exceeds 30%. Campbell & Company’s attempt to manage the risk of the Fund’s open positions is essentially the same in all market categories traded. Campbell & Company applies risk management policies to its trading which generally limit the total exposure that may be taken per “risk unit” of assets under management. In addition, Campbell & Company follows diversification guidelines (often formulated in terms of the balanced volatility between markets and correlated groups), as well as reducing position sizes dynamically in response to trading losses. Campbell & Company controls the risk of the Fund’s non-trading fixed income instruments by limiting the duration of such instruments and requiring a minimum credit quality of the issuers of those instruments.

Campbell & Company seeks to minimize credit risk primarily by depositing and maintaining the Fund’s assets at financial institutions and brokers which Campbell & Company believes to be credit worthy. The limited partners bear the risk of loss only to the extent of the market value of their respective investments and, in certain specific circumstances, distributions and redemptions received.