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yehudi

How Do I Become a Professional Trader

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I just begin trading stocks online. My goal is to become a Portfolio Manager and Financial Educator. I need advice and help. How do I become this goal? What courses or professional exam do I need to take to actualize this dream? And which place will you advice that someone with this goal aspire to work to gain experience?

I need a mentor in this area pls!!!

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If you want to register as a CPO or CTA with the CFTC/NFA:

 

CFTC/NFA registration

 

Commodity Pool Operator (“CPO”)

 

A CPO is an individual or organization which operates or solicits funds for a commodity pool (i.e., an enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures contracts, options on futures, or retail off-exchange forex contracts, or to invest in another commodity pool). A CPO must register with the CFTC and become a member of the NFA unless an exemption from registration is available.

 

Private funds will typically rely on either the CFTC Rule 4.13(a)(3) exemption, which is available to funds that engage in limited futures activity, or the CFTC Rule 4.13(a)(4) exemption, which is available to funds in which all investors are certain categories of “qualified eligible persons.”

 

CFTC Rule 4.13(a)(3). A private fund will be exempt from registration under CFTC Rule 4.13(a)(3) only if it limits its futures positions so as to satisfy one of the following two tests:

 

The aggregate initial margin and premiums required to establish such positions, determined at the time the most recent position was established, will not exceed 5 percent of the liquidation value of the fund's portfolio, after taking into account unrealized profits and unrealized losses on any such positions it has entered into; or

The aggregate net notional value of such positions, determined at the time the most recent position was established, does not exceed 100 percent of the liquidation value of the fund's portfolio, after taking into account unrealized profits and unrealized losses on any such positions it has entered into.

 

CFTC Rule 4.13(a)(4). A private fund seeking to rely on the CFTC Rule 4.13(a)(4) exemption must generally ensure that (i) all natural person investors are certain types of “qualified eligible persons” and (ii) all institutional investors are “accredited investors.”

 

Commodity Trading Advisor (“CTA”)

 

A CTA is an individual or organization which, for compensation or profit, advises others as to the value of or the advisability of buying or selling futures contracts, options on futures, or retail off-exchange forex contracts. A CTA will be exempt from registration if:

 

it is registered as a CPO and its commodity trading advice is directed solely to, and for the sole use of, the pool or pools for which it is so registered;

it is exempt from registration as a CPO and its commodity trading advice is directed solely to, and for the sole use of, the pool or pools for which it is so exempt; or

during the course of the preceding 12 months, it has not furnished commodity trading advice to more than 15 persons and it does not hold itself out generally to the public as a CTA.

 

How do I register as a CPO or CTA with the CFTC/NFA?

 

Commodity Pool Operator (“CPO”)

 

A CPO registers with the CFTC and becomes a member of the NFA by filing the following::

 

A completed online Form 7-R

An application fee of $200.00

CPO Membership Dues of $750.00

 

A CPO is required to file the following in relation to its “principals” and “associated persons”:

 

A completed online Form 8-R

Fingerprint cards

A Principal Application Fee of $85.00

An Associated Person Application Fee of $85.00

 

Principals and associated persons of a CPO are generally required to have passed the Series 3 National Commodity Futures Examination.

 

Commodity Trading Advisor (“CTA”)

 

A CTA registers with the CFTC and becomes a member of the NFA by filing the following:

 

A completed online Form 7-R

An application fee of $200.00

CTA Membership Dues, if applicable, of $750.00

 

A CTA is required to file the following in relation to its “principals” and “associated persons”:

 

A completed online Form 8-R

Fingerprint cards

A Principal Application Fee of $85.00

An Associated Person Application Fee of $85.00

 

Principals and associated persons of a CTA are generally required to have passed the Series 3 National Commodity Futures Examination.

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If you want to register as a CPO or CTA with the CFTC/NFA:

 

Thanks for a useful post Obsidian.

 

So does anybody have any ideas about how one can go about sidestepping all of the above regulation (which I seem to remember is prohibitively expensive) if trading for a handful of other people?

 

For instance, what would happen if I were to establish a limited company with five shareholders, and then the company traded futures? Would the NFA intervene to prevent this?

 

And does the CFTC/NFA have any remit to intervene outside of the US?

 

BlueHorseshoe

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I just begin trading stocks online. My goal is to become a Portfolio Manager and Financial Educator.

 

 

First of all, you have to understand what each of the professions exactly is about.

 

Portfolio Manager is a profession on its own as is Financial Educator (although the latter is more of a business idea for someone starting his own business... still you can work as a coach for someone who has started a financial education business).

 

Also, your thread headline says "Professional Trader". That's again something different, although it can potentially lead to becoming a portfolio manager, but not necessarily so.

 

Not sure, whether you have gathered enough information about each of these professions or what your real motives are... (making tons of money?)

 

Go to some websites of companies working in these areas and check out their career opportunities section. There you get some idea of what background is required.

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...For instance, what would happen if I were to establish a limited company with five shareholders, and then the company traded futures? Would the NFA intervene to prevent this?

 

And does the CFTC/NFA have any remit to intervene outside of the US?

 

BlueHorseshoe

 

if you are not a U.S. citizen or conducting that business in the U.S., you have nothing to do with nfa/ctfc but the laws of your country still apply:roll eyes:

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First of all, you have to understand what each of the professions exactly is about.

 

Portfolio Manager is a profession on its own as is Financial Educator (although the latter is more of a business idea for someone starting his own business... still you can work as a coach for someone who has started a financial education business).

 

Also, your thread headline says "Professional Trader". That's again something different, although it can potentially lead to becoming a portfolio manager, but not necessarily so.

 

Not sure, whether you have gathered enough information about each of these professions or what your real motives are... (making tons of money?)

 

Go to some websites of companies working in these areas and check out their career opportunities section. There you get some idea of what background is required.

 

Thanks for this information

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when it comes to regulations and licences.....

as mentioned having them may not necessarily make you - qualified or experienced- either a portfolio manager or trader or educator....as mentioned they are three very distinct things.

Also when it comes to licences and regulations there are big distinctions that need to be made between

a...target audience, wholesale/professional or retail.

b....your residence and your place of business

c....where your customers are

d.....where your fund may be situated.

 

Your simple best approach - dependent on your education, location, age etc; may be to either approach a funds management house about starting at the bottom to aim to be a portfolio manager, learn about indexing, tracking error, performance calculations and portfolio management OR

to be an educator learn as much as you can for free or from others, then do a marketing course, presentation course etc and approach the CFD, spread betting or broking houses (or do it yourself). As often mentioned you dont need to be able to do it yourself to go down this route.

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