Registered: Jul 2008
04-05-12 03:44 AM
Quote from cooltraderabhi:
Hi - how important is it to have third party audit for your CTA firm. If yes, can you please recommend someone and how much do they charge.
It is not important if you know how to compute performance statistics, and if you are confident about what you've calculated. Most CTA's know how to do it, but are lazy.
Hiring 3rd parties to do this for you does leave you more time to trade, but, just the same, anybody who uses 3rd parties will find potential investors want to use their own 3rd parties to perform audits, thus, it probably won't help legitimacy anyway since they'll want to use their own 3rd parties to compile performance reports than simply taking your 3rd party's word at face value.
Really, hire another employee as I did to handle this task. They can become CTA's and since you know the most important thing is the daily accounting and net of fees calculations, this would be better than hiring 3rd parties. Do it internally, as long as you know what's involved and what you're doing. Your broker will send you daily statements, and you compute the net change percentage wise from those and that will give you VAMI and monthly performance figures.