Discussion in 'Professional Trading' started by rmtrader, Jul 8, 2010.

  1. rmtrader


    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.

  2. rmtrader


    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.
  3. the1


    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:
  4. drjmpc


    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.