Question about Managing Money

Q

qtip

I was looking into becoming a CTA and looking to build a Forex Trading Program.

I was wondering if I wanted to pool money together, do I have to be a designated CPO to do with the the FOREX markets?

I know with Futures & Commodities, you need to be a CPO.

Just not sure about the FOREX markets.

Any information would be greatly appreciated.

Thanks in advance!

apurva
 
qtip/apurva not yet....

There is not any regulation...but be careful not to advise someone how to allocate their portfolio or give financial advise in the managment of their money.

They keep the funds in their account and issue you a power of atty, that your dealer provides. You will need to send them an invoice for your management fees.

Michael B.
 
Quote from ElectricSavant:

qtip/apurva not yet....

There is not any regulation...but be careful not to advise someone how to allocate their portfolio or give financial advise in the managment of their money.

They keep the funds in their account and issue you a power of atty, that your dealer provides. You will need to send them an invoice for your management fees.

Michael B.
More...

Right, the main question is if I should be a registered CPO. Since the amount of money is small, I was hoping I could get the CTA and that would be sufficient for pooling customer accounts for a Forex Trading Program.

Again, I know if you pool customer accounts for a Futures and Commodities program, you MUST be a CPO.
 
Quote from qtip:

Right, the main question is if I should be a registered CPO. Since the amount of money is small, I was hoping I could get the CTA and that would be sufficient for pooling customer accounts for a Forex Trading Program.

Again, I know if you pool customer accounts for a Futures and Commodities program, you MUST be a CPO.
More...

My read is that Electric has answered your main question: "not yet." ES, correct me if I'm wrong. Incidentally, I agree with that answer, for a US-based manager.

Second, I am worried about your "Right...", qtip. Right what? Electric and you are talking about 2 very different approaches / structures. Using a LPOA (limited power of attorney) trading authorization on any number of separate client accouints in their names (which is a far simpler, more transparent approach I've always selected, so far)... vs. one account / investment pool, representing commingled client funds. World of difference, in so many ways.

Even though you don't need to register as a CPO to form a de facto investment pool for forex-only trading, how are you going to deal with routine issues such as:

1) keeping track of each client's ownership share
2) client deposits and withdrawals
3) each client's gain / loss, interest income and year-end tax forms
4) your (manager's) compensation, payable by each client

Wouldn't that be asking for trouble / headaches down the road?

Why not keep it simple and use a broker offering a multi-client interface, combined with LPOAs? Especially since you say "the amount of money is small." After you build a certain track record over a year or two, a CPO entity could make a lot more sense.
 
late apex..I seem to have trouble communicating...you seem to understand what I write..I agree with everything you state...carry on as I am not competent...

what can I say?...I try to write clearly and succinctly...I make a great effort at it and people just want to hear what they want to hear...


Quote from late apex:

My read is that Electric has answered your main question: "not yet." ES, correct me if I'm wrong. Incidentally, I agree with that answer, for a US-based manager.

Second, I am worried about your "Right...", qtip. Right what? Electric and you are talking about 2 very different approaches / structures. Using a LPOA (limited power of attorney) trading authorization on any number of separate client accouints in their names (which is a far simpler, more transparent approach I've always selected, so far)... vs. one account / investment pool, representing commingled client funds. World of difference, in so many ways.

Even though you don't need to register as a CPO to form a de facto investment pool for forex-only trading, how are you going to deal with routine issues such as:

1) keeping track of each client's ownership share
2) client deposits and withdrawals
3) each client's gain / loss, interest income and year-end tax forms
4) your (manager's) compensation, payable by each client

Wouldn't that be asking for trouble / headaches down the road?

Why not keep it simple and use a broker offering a multi-client interface, combined with LPOAs? Especially since you say "the amount of money is small." After you build a certain track record over a year or two, a CPO entity could make a lot more sense.
More...
 
Quote from ElectricSavant:

late apex..I seem to have trouble communicating...you seem to understand what I write..I agree with everything you state...carry on as I am not competent...

what can I say?...I try to write clearly and succinctly...I make a great effort at it and people just want to hear what they want to hear...
More...

Sorry I do apologize. Both of you are correct in that sometimes we do read what we want to hear. From your suggestions, here is what I could do.

1. Form a limited partnership and have the investors pool the money and then trade.
2. Become a registered a CPO.
3. Use technology to trade each account to streamline the headaches of accounting.

The main reason I was asking was asking to find a way to have smaller min. accounts to put together. I could do managed accounts seperatly, howeve I would require a larger min. investments.

Just my way of possibly raising more money based on smaller min. accounts.
 
I've been looking into registering as a CTA and starting my own small firm. Anyone out there recently start a small fund?

Which broker are you using? I am currently with IBFX but looking to move elsewhere especially for the small fund.
 
Quote from iice74:

I've been looking into registering as a CTA and starting my own small firm. Anyone out there recently start a small fund?

Which broker are you using? I am currently with IBFX but looking to move elsewhere especially for the small fund.
More...

Why not just stay where you are and use their Friends & Family Advisor? Funds are apparantly covered by SiPC although I'm not sure how effective the cover is!
 
Quote from cabletrader:

Why not just stay where you are and use their Friends & Family Advisor? Funds are apparantly covered by SiPC although I'm not sure how effective the cover is!
More...

Hey cable -

IBFX has been good and their website is really cool. For CTAs they'll actually set up login screens and everything for clients to check on their accounts which is a very nice feature but I've been having problems with re-quotes and slippage. I can never place a trade at market, it just never happens and often time my TP don't get triggered if the market is active which is really disappointing.
 
Quote from iice74:

Hey cable -

IBFX has been good and their website is really cool. For CTAs they'll actually set up login screens and everything for clients to check on their accounts which is a very nice feature but I've been having problems with re-quotes and slippage. I can never place a trade at market, it just never happens and often time my TP don't get triggered if the market is active which is really disappointing.
More...

Sounds like the same problems I had when I traded at IB, I couldn't get on with it at all.

Plenty of brokers offer PAMM nowadays but I guess it's a matter of finding a good deal and as you point out more importantly good execution!

I'm with a bucketshop (Oanda) so I can't really suggest anything, sorry, but good luck in the search.
 
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