CERES ORION L.P. Annual Report Summary

Welcome to your friendly guide to CERES ORION L.P.'s latest annual report. Think of me as your personal interpreter, cutting through financial jargon. I'll give you the lowdown on how this company performed last year. Our goal is simple: help you understand what CERES ORION does, how they're doing, and if they fit your investment goals. All in plain English.

We'll break down the report into key areas that matter most to you. These include their financial health, big wins, and what the future might hold.

1. What does this company do and how did they perform this year? CERES ORION L.P. is an investment company. It actively trades to make money. They focus on betting on future prices of various goods and investments. This means they predict price changes without owning the actual items. For example, they might bet on crude oil, natural gas, gold, silver, corn, or wheat. They also trade major currencies like the Euro or Japanese Yen. They even trade broader market indexes and interest rate products. This active approach aims to profit from market trends and volatility.

   They make these trades through main brokers like Morgan Stanley (MS&Co.) and JPMorgan Chase Bank. These brokers provide the tools and access to global markets. They also handle the trades and hold the company's trading money. As an investment company, their results depend on how profitable these trades are. This can be very unpredictable.

2. Financial health - cash, debt, liquidity Let's look at their financial health and available cash. A key sign is the cash they hold in trading accounts with their main broker, Morgan Stanley (MS&Co.). As of December 31, 2025, CERES ORION held about $199.5 million in these accounts. This is a big drop from the $230.5 million reported on December 31, 2024. Specifically, their cash with Morgan Stanley fell by $31 million, or about 13.45%, over the year.

   For an investment company that makes complex trading bets, having lots of cash is vital. It helps them meet money needed for trades, cover potential losses, and have enough cash for new positions. This decrease could come from several things. These include big trading losses, paying out a lot of money to investors, or moving funds to other investments or brokers. Investors should watch this reduction in available trading cash closely.

3. Key risks that could hurt the stock price An important risk for CERES ORION comes from its trading partners. This is called "counterparty risk." It means a partner might not meet its agreements. This risk is higher with their private, custom agreements, also known as OTC derivatives. These are direct deals between CERES ORION and its brokers or other partners like Morgan Stanley and JPMorgan. They are not like standardized trades on exchanges, which a central system guarantees.

   If a major broker faces financial trouble or can't pay, CERES ORION could lose a lot. This includes not being able to complete profitable trades. They could also lose money they put up as security. The good news is brokers often use CERES ORION's cash or U.S. Treasury bills to cover defaults. This helps brokers reduce their own risk. However, sometimes a partner might not put up security. This leaves CERES ORION more exposed if that partner defaults. For trades on exchanges, the risk is usually lower. The exchange's clearinghouse acts as a middleman. It guarantees trades and has funds to cover defaults, greatly reducing this risk.

   Beyond partner risk, CERES ORION faces significant market risk. This includes big swings in commodity prices, interest rates, and foreign exchange rates. They also face "leverage risk" from futures and options trading. This means small price changes can lead to big gains or losses compared to the money first invested.