What does a typical CTA charge for managing futures accounts?
Typically CTAs do not participate in the commission payout for trades. CTAs charge two types of fees; management fee and an incentive fee. Management fee is typically 1/6th of 1% charged monthly to the ending account balance under management. Incentive fee is usually charged quarterly and it is 20% of net new profits. For an incentive fee to be payable, the new account balance at the end of the quarter must exceed the account balance of any previous quarters, adjusted for any deposits or withdrawals.
