Managed Futures Trading Accounts

Managed futures accounts are futures trading accounts which are managed by professional money managers on behalf of their customers. These money managers are known as Commodity Trading Advisors (CTAs), who are registered under Commodity Futures Trading Commission (CFTC). They buy and sell futures contracts in a discretionary or predefined basis.

There are a wide range of managed futures trading programs offered by CTAs. Some programs concentrate only on one or two futures contract types – like metals (gold & silver), equity futures (S&P & Dow futures), grains (wheat & soybeans) or soft futures (cotton & sugar). Other programs concentrate on trading a mixture of futures types. Some CTAs are trend followers, some are market neutral traders (or option writers), while some others are long-term traders. Fees that CTAs charge for managing accounts can also vary considerably; usually includes management fee and performance incentives.

• Managed futures trading accounts are considered as a good investment option because of a variety of reasons. They are an easy way of diversifying portfolio.
• They are good hedging tools against portfolio risk.
• They are professionally managed, and do not require any investing/trading knowledge from clients.
• These accounts can be opened with relatively low capital investment.

Things to consider when choosing a CTA for Managed futures trading include their futures trading plan, types of futures they are trading, drawdowns, past performance, fees involved, annualized rate of return and risk adjusted return.

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