DEFINITION of 'Managed Futures Account'

An account that is like a mutual fund, except that positions in government securities, futures contracts and options on futures contracts are used to manage the portfolio.

BREAKING DOWN 'Managed Futures Account'

Professional money managers known as "commodity trading advisors" look after managed futures accounts, deciding on their positions based on expected profit potential. Among other advantages, managed futures offer the potential for reduced portfolio volatility and the ability to earn profit in any economic environment. Managed futures have seen increased institutional use in recent years.

RELATED TERMS
  1. Managed Account

    A managed account is customized to the needs of the individual ...
  2. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  3. Limit Move

    A limit move is the largest amount of change that the price of ...
  4. Contract Unit

    A Contract Unit is the actual amount of the underlying asset ...
  5. Cash Contract

    A cash contract is a financial arrangement that requires delivery ...
  6. ETF Futures and Options

    ETF Futures and Options are derivative products built on existing ...
Related Articles
  1. Trading

    Futures Fundamentals

    This tutorial explains what futures contracts are, how they work and why investors use them.
  2. Trading

    Beginner's Guide To Trading Futures

    An in-depth look into what futures are, and how you can build a solid base to begin trading them.
  3. Investing

    Currency futures: An introduction

    The forex market is not the only way for investors and traders to participate in foreign exchange.
  4. Trading

    Advantages Of Trading Futures Over Stocks (APPL)

    We look at the top eight advantages of trading futures over stocks.
  5. Trading

    The Difference Between Forwards and Futures

    Both forward and futures contracts allow investors to buy or sell an asset at a specific time and price.
  6. Financial Advisor

    This Is How Much Mutual Fund Managers Make

    Learn about the high-paying salaries of mutual fund managers and the low level of transparency in income reporting by mutual fund companies.
RELATED FAQS
  1. What are managed futures?

    Managed futures are futures positions entered into by professional money managers, known as commodity trading advisors, on ... Read Answer >>
  2. How are futures used to hedge a position?

    Learn how futures contracts can be used to limit risk exposure. Read Answer >>
  3. How do I set a strike price for a future?

    Find out why futures contracts don't have set strike prices like options or other derivatives, even though price change limits ... Read Answer >>
  4. Can mutual funds invest in commodities?

    Learn how investors can use commodity mutual funds to diversify their portfolios, and discover why mutual funds may be less ... Read Answer >>
Hot Definitions
  1. Return On Equity - ROE

    The profitability returned in direct relation to shareholders' investments is called the return on equity.
  2. Working Capital

    Working capital, also known as net working capital is a measure of a company's liquidity and operational efficiency.
  3. Bond

    A bond is a fixed income investment in which an investor loans money to an entity (corporate or governmental) that borrows ...
  4. Compound Annual Growth Rate - CAGR

    The Compound Annual Growth Rate (CAGR) is the mean annual growth rate of an investment over a specified period of time longer ...
  5. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  6. Price-Earnings Ratio - P/E Ratio

    The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its current share price relative ...
Trading Center