UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly period ended September 30, 2001
Commission File Number: 2-73692
The Balanced Opportunity Fund L.P.
(Exact name of registrant as specified in its charter)
Illinois 36-3655854
(State or other jurisdiction of (I.R.S Employer
incorporation or organization) Identification No.)
Registrant's telephone number, including area code: (312) 460-9200
Indicate by check mark whether the registrant (1) 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_____
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The Balanced Opportunity Fund L.P.
Index
Page
Part I - Financial Information
Item 1. Financial Statements
Statements of Financial Condition
as of September 30, 2001 and June 30, 2001 3
Statements of Operations for the three
month period ended September 30, 2001 and 2000 4
Note to unaudited Financial Statements - September 30, 2001 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
Part II - Other Information 7
Item 3. Exhibits and Reports on Form 8-K 7
Signatures 8
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Part I. Financial Information
Item 1. Financial Statements
The Balanced Opportunity Fund
Statement of Financial Condition
September 30June 30
2001 2001
Assets
Equity in futures and forward trading accounts:
Cash $ 41,534 $ 150,979
Net unrealized gain/(loss) on open contracts 74,812 (11,530)
Total equity in futures and forward
trading account 116,346 139,449
Guaranteed yield pool, at market 1,314,563 1,271,109
Other receivable 235 402
Total Assets $1,431,144 $1,410,960
Liabilities and Partners' Capital
Liabilities:
Accrued administrative expenses $ 17,103 $ 17,883
Accrued brokerage commission and fees 4,205 2,892
Accrued management fees 2,328 1,174
Redemption Payable - 3,842
23,636 25,791
Partners' Capital
Limited Partners (units outstanding: 610) 1,190,630 1,171,733
General Partner (units outstanding: 111.1141) 216,878 213,436
1,407,508 1,385,169
Total Liabilities and Partners' Capital $1,431,144 $1,410,960
Net Asset Value per Unit - Limited Partners $1,951.85 $1,920.84
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Net Asset Value per Unit - General Partners $1,951.85 $1,921.31
See note to the audited financial statements
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The Balanced Opportunity Fund L.P.
Statement of Operations
Three Months Ended
September 30
2001 1999
Revenues
Trading profit/(loss):
Realized $ (72,227) $47,643
Change in unrealized 86,342 (50,100)
Foreign currency gain/(loss) (280) (664)
Total trading profit and
foreign currency gain/(loss) 13,835 (3,121)
Guaranteed yield pool:
Accrued Interest $ 20,779 25,927
Unrealized market value gain (loss) 22,855 (1,906)
Total guaranteed yield pool revenue 43,634 24,021
Interest Income 842 3,240
Total Revenues 58,311 24,140
Expenses
Brokerage commissions $ 14,481 $18,076
Management fees 3,491 4,420
Other administrative expenses 18,000 18,000
35,972 40,496
Net Income/(Loss) $ 22,339 $(16,356)
Net Income/(Loss) Allocated To:
Limited Partners $ 18,897 $ (14,411)
General Partners $ 3,442 $ (1,945)
Net Income/(Loss) per unit
outstanding for entire period:
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Limited Partners $ 31.01 $ 22.91
General Partners $ 30.54 $ 20.21
See note to the audited financial statements
The Balanced Opportunity Fund L.P.
Note to Unaudited Financial Statements
September 30, 2001
Note - Basis of Presentation
The unaudited financial statements of The Balanced Opportunity Fund L.P.
(the _Partnership) have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they
do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of management, all adjustments, consisting only of normal reoccurring
adjustments, necessary for a fair presentation of the financial condition and
results of operations of the Partnership for the periods presented have been
included. For further information, refer to the financial statements and
footnotes thereto included in the Partnership's annual report on Form 10-K for
the year ended June 30, 2001. Due to the nature of commodity trading, the
results of operations for the interim period presented should not be considered
indicative of the results that may be expected for the entire year.
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Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
Capital Resources
The purpose of the Partnership is to trade commodity interests; as such,
the Partnership does not have, nor does it expect to make, any capital
expenditures or have any capital assets that are not operating capital or
assets. The Partnership's use of assets is solely to provide necessary margin
or premiums for, and to pay any losses incurred in connection with, its trading
activity. The Net Asset Values are calculated and equity reports are reviewed
by the General Partner on a daily basis to monitor the trading advisors'
activity to maximize the market and credit risks of the Fund. The General
Partner also monitors the trading advisors' compliance with investment
objectives as set forth in the prospectus. Redemption of additional units in
the future will impact the amount of funds available for trading commodity
interest. There were no redemptions of units during the quarter ended
September 30, 2001.
Liquidity
Most United States commodity exchanges limit fluctuations in commodity
futures contract prices during a single day by regulations referred to as
_daily price fluctuation limits_ or _daily limits_. During a single trading
day, no trades may be executed at a price beyond the daily limit. Once the
price of a futures contract has reached the daily limit for that day, positions
in that contract can neither be taken nor liquidated. Commodity futures prices
have occasionally reached the daily limit for several consecutive days with
little or no trading. Similar occurrences could prevent the Partnership from
promptly liquidation unfavorable positions and subject the Partnership to
substantial losses which could exceed the margin initially committed to such
trades. In addition, even if commodity futures prices have not reached the
daily limit, the Partnership may not be able to execute futures trades at
favorable prices if little trading in such contracts is taking place. Other
than these limitations on liquidity, which are inherent in the Partnership's
trading of commodity interests, the Partnership's assets are highly liquid and
are expected to remain so. The counterparty for all exchange traded and over-
the counter contracts was Rosenthal Collins Group LP. A portion of the Fund's
assets have been invested in certain United States treasury obligations. This
investment is designed to provide ultimate repayment of the investors' initial
contributions. These securities are not used for trading purposes.
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Results of Operations
Given the volatility of the markets in which the Partnership trades, its
quarterly results can fluctuate significantly and are not indicative of the
expected results for the fiscal year.
In the three months period ending September 30, 2001, the Fund experienced
trading gains of $13,835 compared to trading losses of $3,121 for the same
period in 2000. In the three month period September 30, 2001, the total
guaranteed yield pool revenue was $43,634 compared to $24,021 for the same
period in 2000. At September 30, 2001, there was no material credit risk
exposure exceeding 10% of total assets for either exchange traded or over-the-
counter contracts.
The decline in brokerage commissions is due to less dollar volume in
trading. Management fees, which are based on the net assets of the Fund,
declined as a result of redemptions, which resulted in lower net assets of the
Fund.
Part II - Other Information
Item 1. Legal Proceedings
None
Item 2. Change in Securities and Use of Proceeds
None
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Securities Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
No reports were filed on Form 8-K during the three months ended September
30, 2001.
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Signatures
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934 and to the extent possible due to the acquisition of the
registrant by the undersigned on April 24, 1999; the registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto duly
authorized.
The Balanced Opportunity Fund L.P.
(Registrant)
By: Rosenthal Collins Futures Management, Inc., General Partner
By: ______________________________________
J. Robert Collins, President
Date: October 10, 2001
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