sphereless

Good afternoon (pacific time),


If you were going to trade other peoples money do you need a stock brokers license to so? Is this also required for forex? Any thoughts would be appreciated. This is something that I am very far from doing but would like it to be a long term goal.

Russ

Thank

 

David Waring

Hi Russ,

For forex it depends on the firm that you are trading with. Most in the United States will require you to be licensed as a Commodity Trading Adviser (CTA) if you want to trade other people's money.

In futures you have to be registered as at CTA.

In stocks there is a lot of gray areas depending on how you are set up which you can read more about at the link below:

Forums - Need a license to trade for friends and family?

Hope that helps.

Best Regards,
Dave

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Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

Thank

 

sphereless

Hey Dave and fellow informedtrades' members,


Concerning my goal of possibly trading other peoples money... If a group of 10 people gave me 10,000 what would be some of the legal ways to trade their money in forex or futures? Is it possible to set up a corp and pay dividends? How long would it take to receive a license to trade futures or forex with other peoples pooled money?

Any help would be appreciated,

Russ

Thank

 

David Waring

Hi Russ,

I am not an expert on regulations but when I worked at FXCM if you wanted to pool other people's money you would have to register as a commodity pool operator which is a fairly involved process that you can read about at the link below:

Commodity Pool Operators and Commodity Trading Advisors

The easier and better way to do things in my opinion would be to register as a CTA. The difference between a CPO and a CTA is that CPO accept client money and CTA's have their clients send money to a registered FCM like FXCM and then trade those client accounts via a limited power of attorney.

I think there may be a loophole if you are trading less than 15 accounts however it would be best to speak to the firms that you are considering trading with about this because it is going to vary from firm to firm.

Hope that helps.

Best Regards,
Dave

__________________
InformedTrades University | IT Shopping Guide | Site Map


Disclaimer: Trading is risky and can result in substantial financial loss. As always my posts are simply one traders opinion and should not be taken as trading advice. I am not a financial adviser so everyone please do their own analysis and take responsibility for their own trades.

Thank

 

Unregistered

Look into NFA CPO Exemptions. The exemption allows you to not be a CTA and still meet your objective if you have less than 15 clients and a total not exceeding 450K.

Hope this helps. There are several other exemptions besides the ones I just mentioned.