is an investment structure where many individual investors combine their moneys and trade infutures contractsas a single entity in order to gain leverage. They are analogous tomutual fundswherein a fund is similarly set up expressly for trading inequity, except that mutual funds are open to public subscription whereas commodity pools andhedge fundsare private.
Commodity pools are also called managed futures funds. The name commodity pool is aNational Futures Association(NFA) legal term. In theUnited States, theCommodity Futures Trading Commission(CFTC) and the NFA, as opposed to theSecurities and Exchange Commission, regulate commodity pools.
Many hedge funds are commodity pools. Funds that trade in commodities, which include many of the largest funds engaged in macro-strategies, are registered with the Commodity Futures Trading Commission as commodity pools and ascommodity trading advisors(CTAs). In an address to the Securities Industry Association in 2004, Sharon Brown-Hruska, acting director of the CFTC, said that 65 of the top 100 funds in 2003 were commodity pools, and 50 out of the 100 largest hedge funds were CTAs in addition to being commodity pools.1
Capital asset pricing modelalphabetasecurity characteristic line)
This page was last edited on 26 March 2014, at 02:57