The Profitable Commodity Trading Advisor

Some commodity trading advisors don’t manage accounts for their customers. Rather, they sell trading signals. They tell their customers where to buy, sell, take profits and place stops. In this episode, we discuss why this route is often riskier than many CTAs realize, and why it’s generally an impediment to profitability.

CTA’s often struggle to create promotional materials. They’d rather just trade. This episode explains why fancy tear sheets and pitch books are unnecessary. We also discuss common problems that render most CTA promotional materials ineffective, and when to put promotional material to work in your business.

A 2X program happens when a customer wants to double his position size, but he doesn’t want to increase his trading level. Listen to this episode to find out why this kind of customization presents profitability problems for CTAs, and how to give your customer the increased exposure he wants without experiencing these problems.

Many commodity trading advisors would like to forego registration in the early stages of their business. They want to operate as exempt CTAs at first, but they simply don’t know how. Listen to this episode for answers to questions about how to operate an unregistered or exempt CTA.

CTAs often wonder if they should offer a performance hurdle in their incentive fee calculations, but performance hurdles are illogical given the performance expectations placed on CTAs. Listen to this episode to find out why performance hurdles unnecessarily and unfairly undermine CTA profitability, and what to do instead.

If your customers can’t deduct their advisory fees, they’ll pay tax on trading gains that they don’t get to keep. Listen to this episode to learn why customers might not be able to deduct the advisory fees they pay to you, three strategies that can help your customers avoid this situation, and why these strategies may or may not work for your business.

CTAs who market “diversification through managed futures” often struggle with sales because they overcomplicate the message and require customers to make multiple decisions before they can buy. Listen to this episode to learn an easier and more effective approach.

At some point, every commodity trading advisor wonders if they should set up a pool. Most CTAs who set up commodity pools live to regret it, because investors overwhelmingly tend to prefer separate accounts. Listen to this episode to find out why, and also the few situations where a pool might make more sense.

Some CTAs won’t allow their customers to use notional funding, or they set restrictions on which customers may use it. These restrictions inhibit CTA profitability and make it more difficult for CTAs to attract customers. Listen to this episode to find out why profitable CTAs don’t set restrictions on their customers’ use of notional funding.

New CTAs often trade for their customers without a written agreement. This is called “Trading Naked” and it presents a profitability problem for CTAs. One reason is because it can hurt your track record. Listen to this episode to find out how, and what you can do about it.