Managed Futures Account

If you are an investor with some experience and want to break into the futures market, consider opening a managed futures account. There are some advantages that come with this type of account. One is the expertise of a professional investment manager. Futures trading can result in big profits or big losses, however with an investment pro to help you the chances of making money are better than they would be if you were on your own. This account often uses a number of different investment types. As with futures and all other types of investments, there is a potential for high risk.

You can look at a managed futures account as being similar to a mutual fund. The difference is the type of securities. When you invest in a managed futures account, you and other investors will have their money handled and decisions made by an investment professional. Like with a mutual fund, money is combined together and expertly managed forĀ  the investors. The goal of course is to optimize returns while minimizing risk. There are reasons to consider a managed futures account, even if you have some experience with the stock market.

Futures contracts can be complex investments. Even investors who have years of experience trading stocks may not feel experienced enough to enter the world of futures trading. With a managed account, an investor can enter the market and not worry about making mistakes, because all decisions and transactions are made and executed by the account manager, who has ample education and experience with futures trading. This can be a good thing for individual investors who do not have equivalent education and/or experience but want to get into the futures market.

As previously mentioned, a managed futures account uses money from a group of investors rather than money from a single investor. The money is invested into a futures contract or futures option. In some cases, government securities are purchased as well to help balance out the risk. Futures have a lot to do with commodities, which are natural resources like precious metals, fuel, livestock, produce, coffee and more. Any type of commodity trading is risky and based on speculation, there are no guarantees on how the market is going to go.

Commodities and futures are by nature risky investments. The experts who manage such accounts are very skilled and knowledgeable, but they cannot prevent unexpected occurrences. Commodity values can change dramatically from one day to the next, and often the change is due to circumstances beyond human control such as weather conditions, for example. Even if you read the weather reports, there is no guarantee that they will be 100% accurate. Therefore, before you decide to invest in a managed futures account, make sure you understand and accept the possibility of losing your investment.

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