Frequently Asked Questions

	What is a Managed Futures Account?		What are Commodity Trading Advisors?
	Is a Managed Futures Account appropriate as a short-term investment?		Why can adding futures to an investment portfolio improve its performance?
	Why is professional management necessary and does having a managed account lessen risk in futures trading?		Are Professionally Managed Futures Accounts suitable for everyone?
	How can I access the funds in my Managed Futures Account?		How do you find CTAs for clients?
	What are the fees and expenses associated with Managed Futures Accounts?		How can I track the activity and performance of my account?
	What common pitfalls of investing should I especially be aware of before opening a Managed Account?		Are the funds in my account safe and can I use retirement funds?
	How can I open an account? and How much money should I invest in Managed Futures?		I'm not new to trading futures; why do I need a Managed Futures Account?

What is a Managed Futures Account? A Professionally Managed Futures Account is a discretionary account you give permission to a Commodity Trading Advisor (CTA) to make all trading decisions on your behalf through a revocable power of attorney. Investing in a managed account relieves you of the concerns associated with trading i.e. market timing, asset allocation, stop loss protection, etc. You will review the CTAs disclosure document and trader's performance track record. Additionally, Orion Futures Group, Inc. will monitor your account. What are Commodity Trading Advisors? CTAs are a type of professional trader known as a "Commodity Trading Advisors". Traders with this designation are required by the US Government to submit a disclosure document which outlines who he or she is, states the fees and expenses charged to accounts and reveals the trader's performance track record. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. Is a Managed Futures Account appropriate as a short-term investment? Quite simply, no.. Futures investing is a speculative type of investing, and like most markets tend to be cyclical. Additionally, even the most successful professional traders experience periods of flat returns or even drawdowns. Consequently, losses will be incurred for those trading periods. The wise investor will remain steadfast to his/her investment plan and not close the account prematurely in order to allow the account to recover from those temporary losses in equity.It would not be a wise investment strategy to open an account that you do not intend to maintain for at least 3 years, ideally 5, to benefit from compounded returns for the longer term. Why can adding futures to an investment portfolio improve its performance? The foremost reason, according to research studies like Managed Account Reports and The Lintner Study, is low correlation (sometimes even negative) to the stock and bond markets. Additionally, the futures markets have demonstrated an ability to provide opportunities on a highly leveraged basis to take advantage of major price movements in the financial and commodity markets- either bull or bear. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. Why is Professional Management necessary and does having a managed account lessen risk in a portfolio? In our opinion, Professional Management is necessary because the futures markets are very complex and trading experience, as well as, trading skills are largely responsible for success in this arena. Profitable trading requires discipline and temperament to respond to movements in the market; in addition to knowing when and how to liquidate positions as a part of a predetermined trading plan. All this has to be done systematically in the face of emotion to adhere to a proprietary plan designed to return profits. Futures trading involves risk. The same leverage and market movements that can produce profits can also produce losses. This same scenario can occur in a professionally managed account; however, one characteristic investors should look for in a CTA is a demonstrated ability to successfully manage risk over the long term. You must understand that losses can occur regardless who is managing your money. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. Are Professionally Managed Futures suitable for everyone? No, they are not. We would first interview you to determine your suitability and provide you with all of the necessary information to make sure you understand both the risks and rewards of this type of investing.. Generally, in addition to having the required risk capital, an investor needs to have realistic expectations about returns on investment, tolerance to temporary drawdowns that inevitably will occur, and acceptance of the reality that the risk of loss always exists. How can I access the funds in my Managed Futures Account? A managed account offers a degree of liquidity. Excess funds are usually available on one day's notice and can be wired to you overnight, if you wish.You have complete control over your account which allows you to deposit additional funds, withdraw funds or stop trading anytime you wish. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. How do you find CTAs for clients? The basic requirements for proper client/CTA matching involve: The Investment Requirement which varies from CTA to CTA based on their trading style. The Return Potential, based on the historical performance track record from the disclosure document must be attractive to you. The Level of Risk which must be tolerable by you. Our goal is to match you with a trader who employs a trading plan that parallels your investment disposition - aggressive, less aggressive or somewhere in between. Also, we want to place you with a CTA who will make money for you, but will not cause you to have "sleepless nights" in the process because of intolerable risk. When our recommendation for a CTA is embraced by you as a good fit, only then will we set you up with an account. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. What are the fees and expenses associated with a Professionally Managed Futures Account? In summary, the entire fee structure (primarily performance based with deeply discounted commissions) in an account comprises: A one-time only administration fee of 1 - 2% of the total amount invested is charged by Orion Futures Group. (Under certain circumstances, this fee can be waived.) A monthly commission of 3/4% of the month-ending account net asset value and deeply discounted per trade transaction costs which all must be made back before the CTA is eligible to receive any incentive fees. A CTA incentive fee. CTAs share in profits generated in the account by charging an incentive fee based on the difference between each old and new profit high for the account. These fees are usually paid from the account on a monthly or quarterly basis as detailed in each CTA's Disclosure Document. The incentive fee can only be earned by producing on-going new profits for an account net of all costs. (all commission charges and per trade transaction costs must be made up before an incentive fee is applied) A CTA management fee is charged on the account balance whether the account is profitable or not.( fee normally ranges between 3%- 6% annually - see individual CTA Disclosure Document). We are pleased to offer our clients a discounted CTA management fee of 1% - 2 % annually. Many CTAs also charge a monthly accounting fee that is applicable to all accounts. [All fees are explained in detail in each CTA's Disclosure Document. Prospective investors should always refer to that document to know of all of the account fees associated with a particular CTA] Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. How can I track the activity and performance of my account? All complete listing of all the activity in your account with your previous day's balance can be securely viewed  24 hours a day worldwide with internet access at Vision Financials web site. You will also be provided the same timely reports you would receive if you were trading your own account. This includes immediate mailed reports of all purchases and sales, and a month end summary of transactions, gains, losses, open positions, and current account value. You may call us at 888-769-9399 to obtain an up-to-date status of your account(s). Orion Futures will have the same account information updated daily. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. What common pitfalls of investing should I be especially aware of before opening a Managed Account? Foremost, Managed Accounts are not suitable for everyone in spite of their potentially attractive returns! Risk of loss is ever present even with professional management. Therefore, unless you are confident it's appropriate for you, it would not be wise to invest at all. Second, don't chase returns. By that we mean, do not invest with a particular CTA because he or she is currently hot. All traders will inevitably experience drawdowns or periods of flat returns. A wise investor will select a CTA based on being comfortable with the money management skills and trading style that have been employed in the past to achieve consistent returns. Finally, have an investment plan and stick with it. Investors, who prematurely close accounts out of panic and fear when they have encountered a period of flat returns or drawdown, will inevitably experience losses. Patience and perseverance is required to 'weather the storm'. Managed accounts should not be looked upon as quick fixes to an ailing portfolio, but as a long term portfolio component designed to help balance overall risk while adding diversification. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. Are the funds in my account safe and can I use retirement funds in a Managed Account? Clients are reassured to know that their money is held in a Customer Segregated Account at Vision Financial Markets, a well established and strongly capitalized Futures Commission Merchant (FCM). Vision currently holds the equity and is the FCM of choice for over 125 Introducing Brokers like Orion Futures Group as well as, numerous professional traders and CTAs. Vision has maintained substantially more regulatory capital than it is required to maintain. Vision's auditors are the national accounting firm of Grant Thornton. Yes, you can use IRA, trust, 401k rollover funds and other retirement monies to invest in a Managed Account. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. How can I open an account and how much money should I invest in a Managed Futures Account? Only risk capital should be used in managed futures or any speculative investment. Risk capital is defined as capital that you do not want to lose, but if you did, your lifestyle would not be affected. We recommend that the amount of money you invest depends on your own temperament, financial goals and risk tolerance and should usually be approximately 5% to 25% of your overall portfolio. Each CTA trading program has different account minimums as detailed in their disclosure documents. Before opening an account you must be supplied with a copy of the CTA's disclosure document. Read it carefully and go over any questions you have with us here at Orion Futures Group before you invest. After your questions have been answered and you feel this type of investing is appropriate for you, we will help you to complete the CTA management agreement and Vision Financial Markets Customer Agreement Forms which will need to be returned to our offices for processing. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. I'm not new to trading futures. Why do I need a Managed Futures Account? Trading your own account limits your returns to your own ability and system. By employing CTAs who have a good performance record, you are developing a diversified CTA portfolio of your own. Thus you can gain the potential benefits of adding futures to your portfolio. See the research section below. Return to Top Past Performance is not indicative of future results. The risk of loss exists in futures/option trading. Research The Lintner Study refers to a landmark paper presented in 1983 by the late Prof. John K. Lintner of Harvard University entitled, "The Potential Role of Managed Commodity-Financial Futures Accounts (and/or Funds) in Portfolios of Stocks and Bonds," to the Financial Analysts Federation. Using a composite performance of 15 trading advisors, Lintner showed that the return/risk ratio of a portfolio of trading advisors (or futures funds) is higher than a well-diversified stock/bond portfolio. Furthermore, he found a low correlation between the returns of trading advisors and those of stock, bonds, or a combined stock/bond portfolio. Lintner examined the period July 1979 through 1982. Managed Account Reports (MAR) is widely recognized by investment professionals as a primary source for Commodity Trading Advisor (CTA) performance statistics. Their performance analyses of CTAs and futures funds are often quoted in such financial publications as Barron's, The Wall Street Journal, Forbes, Futures Magazine, and other leading financial publications. The studies cited were conducted to specifically examine the effect of managed futures in an overall portfolio. A detailed 52-page study on "The Role of Managed Futures in Investment Portfolios" can be purchased for $10 dollars from MAR. They can be reached at 220 Fifth Avenue, New York, NY 10001.