Registered: Oct 2010
08-24-12 08:39 AM
Quote from Maverick74:
Yes, CTA's allocate capital to outside CTA's all the time but not without a track record. You need to have your own CTA and usually a 3 year track record. I can't think of any CTA that would just hire a guy to trade for him because the CTA is tied to his name. Which means if you blow it up, your simply an AP (associated person) to the CTA. He is stuck with the track record and he CANNOT get rid of it. All CTA's must report their most recent 5 years of performance to investors. No CTA will take that risk. So what he would do it allocate capital to your existing CTA which you set up. Hope that makes sense.
Yes, that makes sense. The CTA might sub-contract out to you, but as the "general contractor", he wants to see a 3-year track record of your own CTA.
Now, can you be a CTA without actually advising anyone, just trading your own capital? If I set up a CTA structure, but only trade my own account, rather than go through the hassle of raising money, that still gives me the ability to report a 3-year track record, right? Can I set up a CTA and then use prior year's records?
I'm sure there's a web link which explains all this, but if you know the answer off-hand (or have a good link), that would be helpful.