Abstract:
Managed futures is a popular investment vehicle which enables the traders to access the futures market through some professionals, called Commodity Trading Advisors. Trading with the managed futures is more advantageous than with the traditional one. In this paper, we will discuss about these things briefly.Managed futures can be referred as an alternative investment tool that allows the traders to access the futures market through money manager. The managed futures refers to an asset class which can provide returns like any other investment vehicle, for example stocks, bonds etc.
The money managers who govern the managed futures accounts are termed as Commodity Trading Advisors. The traders run their managed futures trading by using their own managed futures account, although the commodity trading advisors are completely responsible for the trading functionalities.
In America, the advisors have to register themselves with the Commodity Futures Trading Commission. They have also taken the membership of the National Futures Association. However, the price of the managed futures is directly proportional with the value of stock market.
The managed futures take the real value when the value of the standard stock markets go down. Then the managed futures' value increases and thereby, offsets the losses.
The main advantage of managed futures trading is that it enables the traders to diversify their investment portfolios. Therefore, the traders can reduce the risks to a large extent thereby the profits get increased. Managed futures are valuable as a "Stand alone investment" as well, for it increases the growth opportunities.
