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Understanding the Managed Futures Industry Infographic


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Understanding the Managed Futures Industry gives users an easy-to-understand snapshot of this vital section of the global hedge fund industry. The managed futures industry has well over $300 billion under management, and helps investors diversify their portfolios, manage risk, and meet their investment goals.

The infographic explains how investors, businesses, and commodity producers use futures, options, or forwards to trade commodities that include gold, lean hogs, wheat, and currencies, among others. Commodity trading advisors and commodity pool operators manage money and advise investors in up to 150 global futures markets, managing funds in public and private commodity pools that are open to different levels of investors.

Learn more about the global hedge fund industry at:

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Understanding the Managed Futures Industry Infographic

  1. 1. HEDGE FUND fundamentals Understanding the MANAGED FUTURES INDUSTRY: WHAT? Commodities like gold, lean hogs, currencies and wheat are traded in financial markets, bringing together buyers and sellers who predict future prices. Businesses and commodity producers use the futures markets to hedge their price and inflation risks. Investors study the market and contract to buy or sell a commodity at a set price on a set delivery date. Wheat for example... An investor will buy a contract for 100 bushels of wheat for $8 per bushel. Three months later the price of wheat is $9.50 per bushel. The investor then sells his contract for a profit. $950 Market Price $150 Investor Profit $800 Contract Price Hundreds OF DIFFERENT COMMODITIES ARE TRADED ON FUTURES MARKETS EVERY DAY. HEDGE AGAINST INFLATION HOW? An exchange-traded contract to buy an asset, such as a lean hog on a future date at a specific price. Forwards: Options: A private, customized transaction to buy an asset such as a gold bar on a future date at a specific price. A contract allowing you to buy or sell an underlying asset at a set price. The two most common types are put options (to sell) and call options (to buy). Commodities trading on futures markets allow investors TO DIVERSIFY THEIR PORTFOLIOS AND MANAGE RISK, for example by Typical investments include: Futures: WHY? providing a hedge against inflation. WHO? COMMODITY TRADING ADVISORS (CTAS) and COMMUNITY POOL OPERATORS (CPOS) manage money and advise investors in up to 150 GLOBAL FUTURES MARKETS. Investors typically put money into “COMMODITY POOLS.” Public pools open to RETAIL investors. THE MANAGED FUTURES INDUSTRY HAS $330 Billion UNDER MANAGEMENT and is and is closely CTA Private pools open to QUALIFIED investors.1 PO C regulated by the U.S. government and self-regulatory organizations within the industry. The Managed Futures Industry is an important tool to help investors diversify their portfolios, manage risk and meet their investment goals. For more information please visit, 1) A Qualified Eligible Person (under CFTC rules) is a sophisticated investor who has investments with an aggregate market value of at least $2 million, or meets another standard as set out in CFTC rule 4.7(a). HEDGE FUND fundamentals