Commodity Trading Advisors are no longer viewed as just Portfolio Managers. click site His role has expanded considerably as investment products become more complex.
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Commodity Trading Advisor at Genuine Trading Solutions is a CTA registered with the CFTC. He says that the role of a CTA today is always changing.
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.
What is the exact role of a commodity trading advisor today? Trading derivatives for a managed fund of futures continues to be important. A CTA has also become more involved with derivative analytics. This role is essentially focused upon becoming an analyst to structure and analyze the more multi-faceted requirements demanded by hedge funds, pension 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. These are SWAPS. SWAPS are privately traded products that are not transacted through a recognized exchange. It is not always easy to find a buyer and a seller who are willing to enter into such an agreement. The second problem is no liquidity. If one party wants to cancel the deal before the agreed date, there is no one else to sell it to.
A Commodity Trading Advisor's role is no longer sufficient to be limited to trading. Understanding the industry from a different perspective is essential to understanding the changing investment climate. The analysis is now the catalyst for adding a value-added service to retain clients. This includes structured products, risk management and OTC derivatives. The best in the business have always been known for their commitment to continuing education.