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Frequently Asked Questions


What are managed futures?
Managed futures are a class of “alternative investments” exclusively investing in futures and futures options by a professional manager, providing a valuable diversification from bonds and equities.




What are managed futures accounts?
Managed futures accounts are discretionary futures accounts professionally managed by a CTA. The investor gives permission to the CTA to make all the trading decisions on behalf of the investor through a revocable power of attorney.



Who is a CTA?
A “Commodity Trading Advisor” (CTA) is a professional money manager investing in futures markets. CTAs are typically registered with Commodity Futures Trading Commission (CFTC), a federal body and National Futures Association (NFA), a self regulatory organization. CTAs are subject to oversight and monitoring of these authorities, and are required to provide adequate disclosure to the investors.



What are the benefits of using a CTA?
CTAs develop and employ a variety of investing techniques that are tested in the marketplace to minimize risks and achieve profits. CTAs typically trade on technical and/or fundamental information. The results and the quality of the results of the accounts vary from CTA to CTA.



What does a typical CTA charge for managing futures accounts?
Typically CTAs do not participate in the commission payout for trades. CTAs charge two types of fees; management fee and an incentive fee. Management fee is typically 1/6th of 1% charged monthly to the ending account balance under management. Incentive fee is usually charged quarterly and it is 20% of net new profits. For an incentive fee to be payable, the new account balance at the end of the quarter must exceed the account balance of any previous quarters, adjusted for any deposits or withdrawals.



Are managed futures suitable for every one?
No. Managed futures are suitable for accredited investors only. An accredited investor is an individual whose net worth exceeds $1 million, or whose income in the last 2 calendar years exceeds $200,000/yr, and who expects more of the same. Managed futures are also suitable for entities with assets exceeding $5 million.





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