Commodity Trading Advisor – CTA | Free Enterprise Advisors

/// Commodity Trading Advisor – CTA

Welcome to André Luiz Ferreira da Costa – Commodity Trading Advisor (CTA)’s Website.
This CTA is a Sole Proprietorship Company organized in 2017. The CTA is registered with the Commodity Futures and Trading Commission (CFTC) and Member of National Futures Association (NFA).

 

TRADING FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS. THERE ARE NO GUARANTEES OF PROFIT NO MATTER WHO IS MANAGING YOUR MONEY. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. IN CONSIDERING WHETHER TO TRADE OR TO AUTHORIZE SOMEONE ELSE TO TRADE FOR YOU, YOU SHOULD BE AWARE OF THE FOLLOWING: IF YOU PURCHASE A COMMODITY OPTION YOU MAY SUSTAIN A TOTAL LOSS OF THE PREMIUM AND OF ALL TRANSACTION COSTS. IF YOU PURCHASE OR SELL A COMMODITY FUTURES CONTRACT OR SELL A COMMODITY OPTION YOU MAY SUSTAIN A TOTAL LOSS OF THE INITIAL MARGIN FUNDS OR SECURITY DEPOSIT AND ANY ADDITIONAL FUNDS THAT YOU DEPOSIT WITH YOUR BROKER TO ESTABLISH OR MAINTAIN YOUR POSITION. IF THE MARKET MOVES AGAINST YOUR POSITION, YOU MAY BE CALLED UPON BY YOUR BROKER TO DEPOSIT A SUBSTANTIAL AMOUNT OF ADDITIONAL MARGIN FUNDS, ON SHORT NOTICE, IN ORDER TO MAINTAIN YOUR POSITION. IF YOU DO NOT PROVIDE THE REQUESTED FUNDS WITHIN THE PRESCRIBED TIME, YOUR POSITION MAY BE LIQUIDATED AT A LOSS, AND YOU WILL BE LIABLE FOR ANY RESULTING DEFICIT IN YOUR ACCOUNT.

UNDER CERTAIN MARKET CONDITIONS, YOU MAY FIND IT DIFFICULT OR IMPOSSIBLE TO LIQUIDATE A POSITION. THIS CAN OCCUR, FOR EXAMPLE, WHEN THE MARKET MAKES A ‘‘LIMIT MOVE.’’

THE PLACEMENT OF CONTINGENT ORDERS BY YOU OR YOUR TRADING ADVISOR, SUCH AS A ‘‘STOP-LOSS’’ OR ‘‘STOP-LIMIT’’ ORDER, WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS, SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.

A ‘‘SPREAD’’ POSITION MAY NOT BE LESS RISKY THAN A SIMPLE ‘‘LONG’’ OR ‘‘SHORT’’ POSITION.

THE HIGH DEGREE OF LEVERAGE THAT IS OFTEN OBTAINABLE IN COMMODITY INTEREST TRADING CAN WORK AGAINST YOU AS WELL AS FOR YOU. THE USE OF LEVERAGE CAN LEAD TO LARGE LOSSES AS WELL AS GAINS.

IN SOME CASES, MANAGED COMMODITY ACCOUNTS ARE SUBJECT TO SUBSTANTIAL CHARGES FOR MANAGEMENT AND ADVISORY FEES. IT MAY BE NECESSARY FOR THOSE ACCOUNTS THAT ARE SUBJECT TO THESE CHARGES TO MAKE SUBSTANTIAL TRADING PROFITS TO AVOID DEPLETION OR EXHAUSTION OF THEIR ASSETS. THE CTA DISCLOSURE DOCUMENT CONTAINS A COMPLETE DESCRIPTION OF THE PRINCIPAL RISK FACTORS AND EACH FEE TO BE CHARGED TO YOUR ACCOUNT BY THE COMMODITY TRADING ADVISOR (“CTA”).

Managed Accounts

Brokerage firms registered as a futures commission merchant (FCMs) create brokerage accounts known as managed accounts. Investors open and fund the accounts and give limited power of attorney to CTA managers who make trades. The advantages of the arrangement are numerous. It provides complete control of the account to the investor, not the fund manager. The investor is provided with complete transparency and can view all the account details whenever desired. The investor may liquidate the account at any time because there are no lock-up provisions. As well, the investor may restrict the trading of the manager, which substantially reduces the risk of fraud or unwanted leverage.

 

 

TRADING FUTURES AND OPTIONS INVOLVES SUBSTANTIAL RISK OF LOSS AND IS NOT SUITABLE FOR ALL INVESTORS. THERE ARE NO GUARANTEES OF PROFIT NO MATTER WHO IS MANAGING YOUR MONEY. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

Positive Risk-Return Tradeoffs Provided by CTAs

 

Risk-return benefits that CTAs provide when investing in managed futures include:

  1. Diversification. Managed futures have historically exhibited low correlation with traditional asset classes. As a result, when combined with a portfolio of traditional assets, they can reduce risk while increasing the portfolio’s return potential.
  2. Performance. Managed futures tend to provide better risk-adjusted returns and, therefore, have higher Sharpe ratios than traditional asset classes.
  3. Access to multiple markets. CTAs can currently invest globally in more than 150 liquid futures products on equities, bonds, indices, currencies, interest rates, metals, energy, and agricultural products. Given the number of available products, managed futures can increase the information ratio (risk-return profile) of an investment by increasing the breadth of investments.
  4. Transparency. Managed futures provide transparency through daily mark-to-market valuations by using recent prices, using a more reliable and accurate limit order book that is visible to everyone, not using liquidity dark pools (like those for equity), not using models (like those used for structured products), and not using interpolation methods (like those for bonds).
  5. Liquidity. Transaction costs for futures are typically low, resulting in little drag from market impact. In fact, futures transaction costs are typically lower than those of the assets underlying the futures contract.
  6. Size. The size of the futures market was estimated to exceed $330 billion in 2015. This substantial market size has allowed institutional investors to become regular participants in the managed futures market.
  7. No withholding taxes. Domestic investors can pass on the tax benefits to investors in futures via cash/futures arbitrage.
  8. Low foreign exchange risk. Given that futures do not have liquidating values, foreign exchange exposure is limited to the margin amount that is posted (which is typically very low).

 

Burkett, Derek,  CFA,  FRM,  CAIA. CAIA® 2017 September Level II

 

 

André Luiz Ferreira da Costa – Commodity Trading Advisor ( CTA ) trading program. (The Advisor)

 

The following description of AC1’s investment strategies is only intended to provide an overview of potential strategies that may be used in the CTA’s trading program. These strategies are subject to change as market conditions may warrant. The Advisor cannot guarantee that its investment objectives will be achieved or that a Client will not incur substantial losses.

 

The Advisor´s trading methods and philosophy are proprietary and confidential and therefore thefollowing description is of necessity and is not intended to be exhaustive.

 

This program is adaptive and may be tailored to fit each investor´s portfolio objectives or to provide strategic and/or tatical asset alocation strategies for portfolio managers and/or investment advisors.

 

The program focuses primarily on financial, currencies and energy markets with particular emphasis on the futures on indices, but may trade other markets outside of this primary focus.

 

The program uses Directional and Relative Value Commodity Strategies. The Advisor may use fundamental and/or quantitative directional strategies in The Advisor´s sector expertise to trade relative price difference between commodities in one or more risk dimensions.

 

The program may trade synthetic weather derivatives strategies.

 

( REQUEST COPY OF THE DISCLOSURE DOCUMENT AND ASSET MANAGEMENT  AGREEMENT HERE )


Scroll Up