Managed Futures

Written by Jacey Harmon
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For years, investors have been trusting money managers with their money. They readily invest in professionally-managed mutual funds in their retirement accounts. Large investors use hedge fund managers to manage their money. Investors who want to take advantage of the futures markets, but don't have the necessary knowledge or skills, can use managed futures accounts.

Managed Futures Accounts with Commodity Trading Advisors

A Commodity Trading Advisor (CTA) is a professional money manager who focuses on trading futures. A CTA can manage a diversified account that includes financial, commodity, and index futures. A CTA can also focus solely on a specific area of the futures markets. A CTA will charge a fee, as either an annual management fee or portion of profits, for managing the account.

The Commodity Exchange Act requires all CTAs to register with the Commodity Futures Trading Commission CFTC). The CFTC has in turn commissioned the National Futures Association (NFA) to receive, review, and grant registration requests. The NFA has set up a set of rules the CTAs must follow. These rules cover topics from sales practices to disclosure of all risks involved with futures.

There are several managed futures accounts an investor can choose from. These accounts vary in their risk level and purpose. Futures brokers will have a list of various managed accounts that an investor can choose from. Make sure the account you choose matches your investment goals and risk tolerance. The futures market is risky and a managed account is not a guarantee of investment success.


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