Commodity Trading Advisor CTA

An application fee for principals and APs is not required if the individual is currently registered with the CFTC in any capacity or is listed as a principal of a current CFTC registrant. Only one application fee is required if the individual is filing an application as both an AP and Principal. One principal of a forex CTA must be a forex AP. One principal of a swap CTA must be a swap AP.

Past performance is not necessarily indicative of future results. Trading commodity futures, options, and foreign exchange (“forex”) involves substantial risk of loss and is not suitable for all investors. In no way is the advisor of the month a direct recommendation of aiSource or any of its affiliates. Please carefully review the disclosure documents and any other promotional material prior to investing with any program. Managed accounts and/or managed futures are very risky and may not be suitable for all investors. Please consult with a Managed Futures specialists prior to investing.

What is a Commodity Trading Advisor?

Money managers earn a fee on transactions, and clients usually pay their money manager a percentage of the managed assets. Many money managers also have a fiduciary responsibility to act in their client’s best interest. They do not have to provide the same level of documentation that CTAs do. Our free CTA database provides comprehensive insight into the industry’s leading managed futures programs. (E) The person does not enter into the swap in connection with activity structured to evade designation as a swap dealer. (iv) Engages in any activity causing it to be commonly known in the trade as a dealer or market maker in swaps.

Topics you will be tested on include the basics of the futures and options markets, hedging, speculating, margin requirements, types of orders, spreading, and market regulations. The recommended study time for the Series 3 exam is 60 to 80 hours, although those with experience trading futures and options may find it takes fewer hours to prepare. Notwithstanding paragraph (4)(i) of this definition, a person that chooses to register with the Commission as a swap dealer shall be deemed to be a swap dealer. (4) A person seeking to rely on the exclusion in paragraph (4)(i)(B)(1) of this definition may rely on the written representations of the utility special entity that it is a utility special entity and that the swap is a utility operations-related swap, as such terms are defined in paragraphs (4)(i)(B)(2) and (3) of this definition, respectively, unless it has information that would cause a reasonable person to question the accuracy of the representation.

What’s a Commodity Trading Advisor?

Investing in commodities often involves the use of significant leverage and, therefore, requires a higher level of expertise to trade properly to avoid the potential for large losses. The CFTC has gradually expanded the requirements for CTA registration over time. It established the NFA to handle CTA registration and ensure that registered members complied with CFTC regulations and NFA rules.

This term has the meaning given to the term in section 1a(39) of the Commodity Exchange Act and includes the Board of Governors of the Federal Reserve System, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Farm Credit Administration, and the Federal Housing Finance Agency, as applicable to the swap dealer or major swap participant. The term also includes the Federal Deposit Insurance Corporation, with respect to any financial company as defined in section 201 of the Dodd-Frank Wall Street Reform and Consumer Protection Act or any insured depository institution under the Federal Deposit Insurance Act, and with respect to each affiliate of any such company or institution. This term means an instruction or authorization provided by a customer to a futures commission merchant, introducing broker or commodity trading advisor regarding trading in a commodity interest on behalf of the customer. A person who is registered as a derivatives clearing organization with the Commission pursuant to section 5b of the Act and regulations thereunder, shall not be deemed to be a major swap participant, regardless of whether the criteria in this definition otherwise would cause the person to be a major swap participant. (ii) $2 billion in aggregate uncollateralized outward exposure plus aggregate potential outward exposure (without any positions excluded from the analysis) with regard to all of the person’s swap positions. (5) The agreement, contract or transaction is not entered into by the issuer of the debt securities upon which the qualifying foreign futures contract is based or referenced (including any security used to determine the cash payment due on settlement of such agreement, contract or transaction), an affiliate (as defined in the Securities Act of 1933 (15 U.S.C. 77 et seq.) and the rules and regulations thereunder) of the issuer, or an underwriter of such issuer’s debt securities.

Commodity Pool Operator and Commodity Trading Advisor Registrations

Some managers focus exclusively on a sector or group of markets (such as energy or grains), and others simultaneously trade up to 65 markets worldwide. The number of markets in which each CTA trades will have an effect on trading strategy and overall returns. Investments placed with a CTA are referred to as Managed Futures because the CTA can manage each client’s individual account, placing trades in the client’s account directly on their behalf, similar to a personal investment manager. For librarians and administrators, your personal account also provides access to institutional account management. Here you will find options to view and activate subscriptions, manage institutional settings and access options, access usage statistics, and more.

• It may be necessary for those accounts that are subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets.
• Commodity option transaction; commodity option.
• Investors need to carefully judge the investment program, where past performance has not been indicative of future results but where research-oriented efforts have been a clear focus for managers trying to raise assets and outcompete other futures managers.
• A CPO is an individual or organization which operates and solicits funds for a commodity pool, including a hedge fund that trades futures contracts, options on futures or retail off-exchange forex contracts.

(ii) That person will be deemed a major swap participant pursuant to the timing requirements specified in paragraph (3) of this definition at the end of the next fiscal quarter if the person exceeds any of the applicable daily average thresholds in that next fiscal quarter. A person that is not registered as a major swap participant, but that meets the criteria in this rule to be a major swap participant as a result of its swap activities in a fiscal quarter, will not be deemed to be a major swap participant until the earlier of the date on which it submits a complete application for registration as a major swap participant pursuant to section commodities trading advisor 4s(a)(2) of the Act, 7 U.S.C. 6s(a)(2), or two months after the end of that quarter. (iii) Any commodity pool operator which, acting in its capacity as a commodity pool operator, solely operates commodity pools, regardless of whether that commodity pool operator is registered or exempt from registration in such capacity. This term means money, securities, or property posted by a party to a futures, option, or swap as performance bond to cover potential future exposures arising from changes in the market value of the position. (3) All money accruing to such 30.7 customers as the result of trading in foreign futures contracts or foreign options.

Commodity Trading Advisor (CTA) Members

A CTA fund is a hedge fund that uses a managed futures strategy. It invests in futures contracts and uses a variety of trading strategies. These may include systematic trading and trend following. However, fund managers can actively manage investments using discretionary strategies, as well. CTA funds offering a managed futures strategy must be registered with the CFTC and NFA. (B) The business conduct standards set forth in section 4s(h) of the Commodity Exchange Act and regulations promulgated thereunder shall apply to a swap dealer or major swap participant that is a party to a foreign exchange forward or foreign exchange swap.