Managed futures

A managed futures account (MFA) or managed futures fund is a type of alternative investment in the US in which trading in the futures markets is managed by another person or entity, rather than the fund's owner. Managed futures accounts include, but are not limited to, commodity pools. These funds are operated by commodity trading advisors (CTAs) or commodity pool operators (CPOs), who are generally regulated in the United States by the Commodity Futures Trading Commission and the National Futures Association. As of June 2016^[update], the assets under management held by managed futures accounts totaled $340 billion.

Managed futures accounts are operated on behalf of an individual by professional money managers such as CTAs or CPOs, trading in futures or other derivative securities. The funds can take both long and short positions in futures contracts and options on futures contracts in the global commodity, interest rate, equity, and currency markets.

Managed futures accounts may be traded using any number of strategies, the most common of which is trend following. Trend following involves buying in markets that are trending higher and selling short in markets that are trending lower. Variations in trend following managers include duration of trend captured (short term, medium term, long term) as well as definition of trend (i.e. what is considered a new high or new low) and the money management/risk management techniques. Other strategies employed by managed futures managers include discretionary strategies, fundamental strategies, option writing, pattern recognition, and arbitrage strategies, among others. However, trend following and variations of trend following are the predominant strategy.

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