Who are Commodity Trading Advisors and how can they be helpful? In layman’s terms Commodity Trading Advisors are individuals well-versed in the trading of commodities. To be more specific and just a tad technical, they are Asset Managers who follow a set of systematic investment strategies to attain the highest yield possible per trade
What is Commodity Trading?
Commodity trading is trading that is done in the form of raw goods that are interchangeable or exchangeable. Like the trading of gold, silver, crude oil, copper, etc. This trading is usually done by people to safeguard their investment and diversify their portfolios so that they are exposed to decreased risk and face the minimum loss.
What is a CTA’s job and how can they help?
What exactly is a CTA’s job? A Commodity Trading Advisor is an expert trading guide who is certified by the National Futures Association (NFA). His job is primarily to guide a firm or an individual investor on how to trade in commodities and commodities futures. A CTA is required by firms to handle their commodities trading departments specifically, as commodities trading is quite distinctive in of itself and set apart from normal trading.
Commodity trades are generally taken on future trading contracts or in options trading, which, quite simply put is just not everyone’s cup of tea. In commodity trading, the risk is higher because of liquidations and high-risk high reward ratios. That’s why a CTA is required to advise to the best of their ability so as to minimize risks and maximize returns.
We hope the above answers your questions pertaining to a CTA’s job and how they can be of service to an organization.
Is a CTA a finance advisor?
Moving on to our final point. A financial advisor is a financial expert who manages a firm or an individual investor’s portfolio. They manage the portfolio so as to maximize gains and minimize losses by managing risk.
In this regard, a CTA can most definitely be considered as a financial advisor, as they manage investments and provide financial advice and guidance on what economic assets should be retained and which should be divested for maximum returns.
In closing it can be summarized that Commodity Trading Advisors are experts in their field who provide relevant advice and guidance on what commodities a company or individual should invest in so as to generate the maximum returns. To learn more and about CTA’s feel free to visit our website and learn more from the resources we have available on them and many more subjects of interest!