Today's Commodity Trading Advisor is no longer to be thought of only as a Portfolio Manager. https://www.fxcm.my/komoditi/ His role has expanded considerably as investment products become more complex.
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Commodity Trading Advisor, Genuine Trading Solutions, a registered CTA with the CFTC, says the role today of a CTA is constantly evolving.
Dwayne Strochen, the President of Genuine Trading Solutions, says that a Commodity Trading Advisor used to be satisfied with being known as a portfolio manager trading commodities and futures in a managed fund. There is no question today's investor has become more sophisticated. In response, today's selection of investment products has become ever more complex and varied, the need for the CTA to understand the uses and management of these products becomes even more acute.
So what exactly is the role of today's Commodity Trading Advisor. Certainly trading of derivative products for a managed futures fund continues to be as important as before. A CTA has also become more involved with derivative analytics. This role is focused on becoming an analyst who can structure and analyze more complex requirements from hedge funds, pensions funds and structured products.
The use of derivative analytics to manage the adverse risk of an equity or bond portfolio brought about by adverse market conditions is critical in preserving asset growth. Hedging is a proven way to reduce volatility. The largest institutions have known this for years, but now it's available to smaller companies and individual investors. As products continue to develop, the CTA will also evolve to meet the needs of today's professional manager.
Derivatives are not limited to commodities exchange traded futures and options. There continues to be an ever expanding list of over-the-counter derivative products. SWAPS are SWAPS. SWAPS and privately transacted products transacted without the use of a recognized exchange. It is not always easy to find a buyer and a seller who are willing to enter into such an agreement. Second, there is no liquidity. If one party wants to cancel the deal before the agreed date, there is no one else to sell it to.
The role of a commodity trading advisor is not limited to just trading. It is now imperative to understand the industry in a new light so to understand the changing investment environment. Analysis now becomes the catalyst to include a value added service to retain customers. Structured products, risk management, and OTC derivatives are all included. Continuing education has been and continues to be the hallmark of the best in the industry.