Trading systems don’t care what the answers are: we will let the market tell us the answers by what it does.
A hedge fund manager
Inappropriately, this strategy is also called CTA, from the name of the type of management company adopting it. A Commodity Trading Advisor (CTA) is any individual or firm that for compensation or profit, directly or indirectly, advises others on the opportunity to buy or sell commodity futures or options contracts. Under the Commodity Exchange Act of the United States, all individuals and firms that intend to operate in the field of futures contracts, albeit with some exceptions, are required to be registered with the Commodity Futures Trading Commission (CFTC, www.cftc.gov
) and be members of the National Futures Association (NFA, www.nfa.futures.org
Some CTAs exercise a discretionary management over hedge funds that invest in options and futures. Initially, they restricted their activities to commodity futures or options trading, which is clearly why they were called Commodity Trading Advisors.
A Commodity Pool Operator (CPO) is an organization soliciting funds from a variety of investors for the purpose of investing in commodity futures or options. With the exception of a few special exemptions, a CPO must be registered with the CFTC. In the United States, CPOs are organized as Limited Partnerships or Limited Liabilities Companies: both types of organizations protect investors from a loss exceeding the original investment.