A Commodity Trading Advisor, or CTA, is a professional futures investor and is registered as such with the Commodity Futures Trading Commission, the regulatory agency with jurisdiction over the futures market in the United States. Most CTAs have spent a great deal of time studying, analyzing and trading commodity futures covering everything from pork bellies to foreign currencies. Some had their start in the futures pit, others in the academic halls, and others still in mixed and varied occupations. Despite these different beginnings, all are alike in that they demonstrate an aptitude for trading futures.commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.
CTA Investment Services
CTAs provide several services. Some author periodic newsletters that describe the futures market and recommend specific investment strategies for their clients. Others specialize in designing computer trading or analytic programs. Still others tour the countryside hosting educational seminars. Because of their experience in trading and analyzing futures markets, CTAs are regarded very highly in the futures investment arena..commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.
Managed Accounts
CTAs can legally trade futures for you in the event that you have neither the desire nor the time to trade yourself. In this case, the customer opens a futures trading account and gives the CTA explicit authority to transact on their behalf. A substantial sum of money is usually required to participate in a managed account, often over $250,000, which precludes many people from benefitting from the expertise of a CTA.

Generally, CTAs receive a management fee and an incentive fee for managing customer funds. The management fee is expressed as a percentage of the amount of customer funds that is managed. These fees are due and payable regardless of the investment performance of the CTA. Management fees are typically small and usually range anywhere from one to five percent. As an example, a customer who contributed $1,000,000 to a CTA having a 2.5% management fee would pay $25,000 annually.

CTAs also receive an incentive fee consisting of a percentage of the profits that they generate by their trading. The incentive fee constitutes the main payment to the CTA for services rendered. Incentive fees can range anywhere from fifteen to forty percent and are paid to the CTA only if profits are earned. If a CTA incurs a loss in one year, no incentive fees are paid for that year and, typically, incentive fees will not be paid thereafter until all loss has been fully recouped. As an example, a CTA charging a 30% incentive fee and who earns 60% in profits for a customer over the year would keep 18% for themselves.

Before a customer can make an educated decision over whether or not to invest funds with a particular CTA, they need to be given sufficient information about the candidate CTA. All such information is provided in the Disclosure Document which a CTA must have prepared and have had inspected by the Commodity Futures Trading Commission prior to soliciting any customer funds.commodity futures broker, futures trader, commodities futures trading, financial and commodity futures markets, paper trading, full service broker assisted accounts.
The disclosure document includes information on:

• personal history of traders,
• schedule of fees,
• trading style and methodology,
• investment track record,
• minimum capital contributions, and
• any other pertinent information.