Are There Special Risks Associated with Managed Futures?
A. Yes. Investing in managed futures carries certain specific risks of which every managed futures investor should be aware. In particular, it is important to understand that the high degree of leverage often obtainable with managed futures investing, can work both for and against a managed futures investor. The use of leverage can lead to large losses as well as gains in managed futures investing. In some cases, managed futures accounts are also subject to substantial charges for management and advisory fees. There are many other risks to consider with managed futures and with trading in the commodity markets. Investors should carefully study the disclosure document of the CTA before making any investment in a managed futures product.
