CTA Startup Costs

Discussion in 'Professional Trading' started by BGB, Mar 23, 2005.

  1. BGB


    I would like to restart an old discussion on the costs associated with starting a CTA business and any pitfalls to be aware of. I am considering this move and would appreciate any experienced advice on the subject. Thanks alot, BGB
  2. Truff


    Your main start up costs are lawyer fees for your disclosure documents and managed accout documents. You need good accounting software. NFA registration has fees but they are not to bad. Your biggest fees will be your lawyer fees.
  3. Yes, attorney fees. But one thing nice about CTA/CPO is that the NFA has to approve your docs. If you find some good boilerplate you can reduce your costs. If you do go this route I would say:

    1. don't make anything that smells like a indication of future returns
    2. do not use any historical (hypothetical performance)
    3. disclaim everything you can think of

    If you do a google search you can find some disclosure docs online...

    Otherwise I can PM you name of someone who says they can do the docs for about $6k.

    Also, for accounting software, TradeDepot is one of the less expensive ways to go, but if you're just doing futures, you can also do it in excel or access....
  4. Truff


    Yeah, thats what i did, my documents cost nothing.
  5. Tell an existing CTA that you might be interested in investing in their fund. They will give you a disclosure document. Use that one as basis for your own disclosure document. This eliminates a big chunk of the lawyer fees.
  6. Truff


  7. Truff


  8. For anyone who's done this and applied to trade interbank forex via ebs prime.What sum was required to get a credit line established in the prime bank?
  9. To be totally honest with you it is pretty cheap.

    My costs were
    1) the cost of taking the series 3 and study materials
    2) the registration fees to the NFA for myself, CPO, and CTA
    3) the state costs to start two LLCs (one for my management company and a separate one for the Pool)

    I wrote and continue to write my own disclosure documents so I saved the cost of a lawyer.

    All in all my total costs were around $2500. Also keep in mind you have to pay yearly dues to the NFA.
  10. refco fx protrader requires 250 K usd , 25-30 dollars commish per million
    #10     Mar 23, 2005