How to Be a Commodity Trading Advisor

If you are planning a career in finance, perhaps being a commodity trading advisor (CTA) is the job for you. A CTA is, in most cases, a registered person who advises individuals on the purchase and sale of commodity futures and option contracts. This is a detailed, specialized area of finance requiring knowledge about investment vehicles. If trading and contracts are for you, consider being a CTA.

Difficulty: Moderately Challenging

Instructions

1. Obtain at least a bachelor's degree in finance from an accredited college or university. A master's degree is helpful as well.

2. Register as a commodity trading advisor with the U.S. Commodity Futures Trading Commission. Do this through the National Futures Association. Registration is required under the federal Commodity Exchanges Act passed in 1936.

3. Advise no fewer than 15 persons over a 12-month period to be considered an active CTA. You can work at an investment firm or be a self-employed CTA.

4. Maintain documents required by National Futures Association regulations. These include daily transaction records, client files, employment history, intended charges for service and marketing information.

5. Pay a yearly registration fee of $200 and maintain at least 15 clients over every 12-month period to continue your status as a registered CTA.

Tips & Warnings

• It is advisable to obtain the services of a lawyer when submitting the required disclosure documents to the National Futures Association when registering.
• Disclosure documents must include details of your trading program, performance history, risk detail and any previous disciplinary actions.
• Registration is not required if you're advising less than 15 persons over a 12-month period.
• Disclosure documents must be on file with the U.S. Commodity Futures Trading Commission for 21 days prior to taking on clients.
• The fee for registering as a CTA is $200, which is non-refundable.
• There are heavy fines and penalties for not adhering to National Futures Association rules and regulations.

Resources

• Find out about registering as a CTA through the National Futures Association.
• Learn more about CTA registration requirements here.

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