Professionally Managed Futures Accounts may be a valuable investment alternative. However, like any investment decision, prudent research and consideration should be made before investing. This series of articles will introduce you to managed futures. Your decision to invest in a managed futures program should only be made after a thorough research and analysis of managed futures and the risks and rewards this alternative investment presents.


What is a Managed Futures Account?

A professionally Managed Futures Account is a discretionary trading account where you give permission to a Commodity Trading Advisor (CTA) to make all trading decisions on your behalf through a revocable power of attorney or a third party trading authorization.

Investing in a managed account relieves you of the concerns associated with the trading facet of investing i.e. market timing, asset allocation, stop loss protection, etc. You make the large decisions of who to authorize to manage your account and how much risk capital to invest. To facilitate this, you review ranking, profile, and performance measurement reports and of course the individual CTAs disclosure document to screen and qualify the investment for your particular circumstances.

What is a CTA?

A CTA is professional trader known as a "Commodity Trading Advisor". A CTA is an individual or firm who, for pay, trades accounts for individual clients or for commodity pools and/or who provides analysis, reports or advice concerning futures and options trading. Traders with this designation are generally required by the US Government to submit a disclosure document which outlines who he or she is, states the fees and expenses charged to accounts and reveals the trader's performance track record. Additionally, information on the Advisor's trading program is explained, as well as any conflicts of interest or disciplinary history that may be material.

 Next Article: Why Managed Futures?