A commodity trading advisor is basically just what you’d think; someone with professional experience who advises others about investing in commodities. He or she can provide their personal, professional opinion to clients about futures, forex contracts and overall market trends based on their experience. The advisor can also manage accounts and funds for clients.
But not just anyone can hang a sign and be a commodity trading advisor. According to this article, you either have to be registered or limit the quantity and type of advice you give.
If you have given commodity trading advice to 15 or less people in the past year and don’t advertise yourself as a CTA, you aren’t required to be registered.
If you are giving general advice in a bulk means of communication, like emails, a website, newsletters, books or lectures, you don’t have to be registered.
However, if you give personalized advice that is tailored to individual customers, then you have to be registered. There are proficiency requirements that you have to pass, application fees, CTA membership dues and if you are involved in forex activities that are off-exchange, you must apply to be a forex firm as well as have a minimum of one principal Forex Associated Person, according to the article.
Whether you’re an experienced or novice commodity trader, enlisting the aid of a commodity trading advisor may be something you have considered. General advice can be useful, but if you are letting someone give you specific investing advice or thinking about letting them invest for you, make sure he or she is a registered CTA.
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