Managed Futures

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Introduction to Managed Futures

A CTA, or Commodity Trading Advisor, is a professional money manager who trades global futures markets. The National Futures Association has regulatory authority over CTAs in the United States.

Selecting a Managed Futures Program

Based upon your individual needs and risk tolerance, efutures.com will show investors CTA's that fit their requirements. Some of the criteria we use include strategy, experience, drawdown, volatility, assets under management (AUM), minimum investment, track record, markets traded, and margin-to-equity ratio.

Notional Funds & Leverage

Most CTAs have minimum investment amounts that allow them to trade their strategies without sacrificing return. This initial investment will require you to complete new account documentation with efutures.com, who process trades at the direction of the CTA. The assets you invest are deposited with efutures.com, are only accessible by you, and prelims are viewable intraday. efutures.com is regulated by both the NFA and CFTC.

FAQ

In addition to commission, regulatory and exchange fees, typically there are two fees associated with investing in Managed Futures: management fees and incentive fees. A management fee is charged by the CTA to manage the assets they trade. An incentive fee is the percentage a CTA will charge on any new trading profits on the account. The incentive fee is paid on performance: if the CTA does not make a profit you do not pay an incentive fee. Generally management fees are 2% of AUM/yr, and incentive fees are 20% of new trading profits.

Risks of Futures Trading

There are risks with every type of investment. Make sure you have collected the correct information to measure CTAs, and that you are comfortable with their strategy.

CME Managed Futures Resource Center

CME Group is a trademark of CME Group, Inc. The Globe logo, CME, Chicago Mercantile Exchange, E-mini and Globex are trademarks of Chicago Mercantile Exchange Inc. All other trademarks are the property of their respective owners. Copyright © 2011 CME Group. All rights reserved.

CME Group is the world's leading and most diverse derivatives marketplace. The company is comprised of four Designated Contract Markets (DCMs). Further information on each exchange's rules and product listings can be found by clicking on the links to CME, CBOT, NYMEX and COMEX.

efutures.com is a trade name used by the Knight Futures division of Knight Capital Americas LLC ("KCA"). KCA is a futures commission merchant and registered broker-dealer, member FINRA/SIPC. Futures customers should be aware that futures accounts, including options on futures, are not protected under the Securities Investor Protection Act. Past results are not necessarily indicative of future results. Because the risk of loss in trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.