I'm looking into ways to expand my trading career, and was wondering if anyone could give me some pointers as to which path I should look into... RIA or CTA? Here's my detail... I'm an equity options trader (premium seller), been trading my own account full-time for 2 years. I have basic knowledge about futures trading, but don't usually trade the instrument since my focus is mainly on trading options on broad-based indices and maybe a handful of individual stocks that I feel I could take advantage of vol skew. I want to give the money management business a try, but having trouble deciding whether I need to set up as a CTA or RIA. I like CTA for many reasons: easy to get started, transparency, cftc regulation, hedgefund-like structure (performance + mgmt fee), etc... BUT, I probably won't be trading futures or futures options, just equity options... so from that stand point, does it even make sense to set up as CTA? Also, can RIA charge a performance fee AND mgmt fee?? I see many RIA seem to charge only a standard 1% mgmt fee. Any info you can pitch in would be much appreciated. -RM
Just wondering if anyone has any comment on this topic? What's the difference between managing money as a Commodities Trading Advisor (CTA) versus Registered Investment Advisor (RIA)? Any input would be much appreciated.
RIA's are prohibited from charging a performance fee and if you want to operate as a CTA or a CPO you can only charge an accredited investor a performance fee. You can accept up to 35 non-accredited investors but you can't charge them a performance fee. Edit: Oh man, just realized this thread is a year old. :eek:
It doesn't matter. That was still a valuable tidbit. It helped me alot. It is just one more reason to pick up the Series 3 and build a business based upon that first.