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Trader's Tip
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There is no such thing as too much research or background work that can be done when contemplating a managed futures account.
- Santo Nudo |
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Are you listening? You should be!
Walsh Trading is pleased to announce the Walsh Trade Voice (WTV) 2008 Cornbelt Snapshot Tour report has begun. With quality first hand information you cannot get anywhere else, the Cornbelt Snapshot can be heard live at 7:35 AM, CST on WTV and in its recorded version once the live broadcast is completed. The 2008 Cornbelt Snapshot Tour features input from 8 diverse locations throughout the entire U.S. Cornbelt. Listen now!
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Today's Featured Article
If you are currently trading futures you should consider adding managed futures to your portfolio. Managed futures are professionally managed futures accounts. A managed futures account is managed by a Commodity Trading Advisor (CTA) who is registered with the Commodity Futures Trade Commission (CFTC) and with National Futures Association (NFA). The NFA is an industry self-regulatory agency. CTA's must submit to the NFA for review disclosure documents. The CTA does the actual trading for a managed futures account. In return for this the CTA will receive some combination of a management fee, an incentive fee (percentage of the profits), and a share of the commissions.
To better understand the why you should consider managed futures, it is helpful to review some common reasons why people lose money trading futures:
- Unable to devote enough time to trading
- Seriously under capitalized
- Lack of money management techniques
- Poor trading discipline
- Trading for the action and not to make money
- Over trading
- Fight the market instead of going with it
- Make trades to satisfy margin calls
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By using managed futures we can attempt to eliminate the reasons that the average trader loses. As noted in the Chicago Board of Trade's Guide to Managed Futures, managed futures, by their very nature, are a diversified investment opportunity. The CBOT guide states that benefits of managed futures within a well-balanced portfolio include:
- Opportunity for reduced portfolio volatility risk
- Potential for enhanced portfolio returns
- Ability to profit in any economic environment
- Opportunity to participate easily in global markets
Disadvantages of managed futures:
- No participation in trading decisions
- Management fees and administrative costs
- Incentive fees
- Potential trading losses
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The main concern of most investors will probably be turning over the trading decisions to another person, if you are able to do this, managed futures maybe an alternative investment worth considering.
Many firms provide customers access to managed futures. This access is designed to assist institutions and individuals with portfolio diversification, construction and to introduce them to alternative investments. Through licensed representatives, firms are able to offer clients private and public managed fund products such as commodity trading advisor programs and systems trading programs.
Many, if not most, firms that provide access to managed futures also track and execute trading systems and CTA products covering a wide range of markets and trading styles. Make sure you do your homework and contact people that have the expertise to help place you in the program or combination of programs to meet your specific goals based on your trading profile. Managed futures products can be used by all type of Futures accounts including IRA, Pension and Trust accounts.
The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. In no event should the content of this market letter be construed as an express or an implied promise, assurance or implication by or from Walsh Trading Inc.,or Walsh Asset Management,LLC, that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future performance. | |
About the Author
| Santo Nudo
is President of Walsh Asset Management, LLC an Illinois corporation that is registered with the CFTC and the NFA. Walsh Asset Management, LLC, is designed to assist institutions and individuals with portfolio diversification, construction and to introduce them to alternative investments. Through our licensed representatives, we are able to offer clients private and public managed fund products such as commodity trading advisor programs and systems trading programs. |
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Special Message from Our Author
Are you listening? You should be!
Walsh Trading is pleased to announce the Walsh Trade Voice (WTV) 2008 Cornbelt Snapshot Tour report has begun. With quality first hand information you cannot get anywhere else, the Cornbelt Snapshot can be heard live at 7:35 AM, CST on WTV and in its recorded version once the live broadcast is completed. The 2008 Cornbelt Snapshot Tour features input from 8 diverse locations throughout the entire U.S. Cornbelt. Listen now!
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