Commodity Futures Trading Commission

The U.S. Commodity Futures Trading Commission (CFTC) is an independent agency of the US government created in 1974, that regulates futures and option markets. The Commodities Exchange Act (“CEA”), 7 U.S.C. § 1 et seq., prohibits fraudulent conduct in the trading of futures contracts. The stated mission of the CFTC is to foster open, transparent, competitive, and financially sound markets, to avoid systemic risk, and to protect the market users and their... Read More

What is Regulatory compliance

In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Regulatory compliance describes the goal that organizations aspire to achieve in their efforts to ensure that they are aware of and take steps to comply with relevant laws, policies, and regulations. Due to the increasing number of regulations and need for operational transparency, organizations are increasingly adopting the use of consolidated and... Read More

What is a Futures Exchange?

A futures exchange or futures market is a central financial exchange where people can trade standardized futures contracts; that is, a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. These types of contracts fall into the category of derivatives. The opposite of the futures market is the spots market, where trades will occur immediately (2 business days) after a transaction... Read More

Calendar Anomalies and Arbitrage the book

This book discusses calendar or seasonal anomalies in worldwide equity markets as well as arbitrage and risk arbitrage. A complete update of Us anomalies such as the January turn-of-the year, turn-of-the-month, January barometer, sell in May and go away, holidays, days of the week, options expiry and other effects is given concentrating on the futures markets where these anomalies can... Read More

What is Nonfarm Payrolls?

Nonfarm payroll employment is a compiled name for goods, construction and manufacturing companies in the US. It does not include farm workers, private household employees, or non-profit organization employees. It is an influential statistic and economic indicator released monthly by the United States Department of Labor as part of a comprehensive report on the state of the labor market. The financial assets most affected by the nonfarm payroll... Read More

What is Volatility?

In finance, volatility (symbol σ) is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns. Historic volatility is derived from time series of past market prices. An implied volatility is derived from the market price of a market traded derivative (in particular an option). Volatility as described here refers to the actual volatility, more specifically: actual current volatility of a... Read More

What is an Option?

In finance, an option is a contract which gives the buyer (the owner or holder of the option) the right, but not the obligation, to buy or sell an underlying asset or instrument at a specified strike price on a specified date, depending on the form of the option. The strike price may be set by reference to the spot price (market price) of the underlying security or commodity on the day an... Read More

A brief history of the CTA

From Wikipedia: In the United States, trading of futures contracts for agricultural commodities dates back to at least the 1850s. The first Federal regulation aimed at futures trading was proposed in the early 1920s, leading to the passage of the Grain Futures Act in 1922. In 1936, this law was replaced by an amended version named the Commodity Exchange Act. The “commodity trading advisor” was... Read More

What is a Fund of Funds

From Wikipedia: A “fund of funds” (FOF) is an investment strategy of holding a portfolio of other investment funds rather than investing directly in stocks, bonds or other securities. This type of investing is often referred to as multi-manager investment. A fund of funds may be “fettered”, meaning that it invests only in funds managed by the same investment company, or “unfettered”, meaning that it can invest in external... Read More

Commodity pool operator

A Commodity pool operator (CPO) is an individual or organization that solicits or receives funds to use in the operation of a commodity pool, syndicate, investment trust, or other similar fund, specifically for trading in commodity interests. Such interests include commodity futures, swaps, options and/or leverage transactions. A commodity pool may refer to funds that trade in commodities and can include hedge funds. A CPO may make trading decisions for a... Read More