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Trading for others in the US

  • #1
  • First Post: Sep 28, 2013 7:33pm Sep 28, 2013 7:33pm
Am I legally allowed to trade other people's capital in the United States?

Do I have to be licensed as a CTA? Series 3 and 34?

What are the legal limitations for trading for others?
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  • #2
  • Sep 28, 2013 10:03pm Sep 28, 2013 10:03pm
  •  FerruFx
  • Joined May 2007 | Status: MT4/MT5 EAs/Indicators/Alerts coder | 6,542 Posts | Online Now
Quoting emanontrader
Am I legally allowed to trade other people's capital in the United States? Do I have to be licensed as a CTA? Series 3 and 34? What are the legal limitations for trading for others?
Your status says "Student" ... and you are going to trade other's capital.

My question: are you sure to have enough knowledge and experience to do so ? Do you have enough background in trading ?
MT4/MT5 EAs/Indicators/Alerts coder
  • #3
  • Sep 28, 2013 10:13pm Sep 28, 2013 10:13pm
Quoting emanontrader
Am I legally allowed to trade other people's capital in the United States? Do I have to be licensed as a CTA? Series 3 and 34? What are the legal limitations for trading for others?
Requirements are strict, Background checks for criminal past, and I think you need $200,000 or more in the bank for proof of financial responsibility.............
Many Tests..........
The More You Learn, The More You Earn.....
  • #4
  • Sep 30, 2013 1:39pm Sep 30, 2013 1:39pm
Quoting FerruFx
{quote} Your status says "Student" ... and you are going to trade other's capital. My question: are you sure to have enough knowledge and experience to do so ? Do you have enough background in trading ?
No longer a student. The status "Student" is simply there because I feel like you can never stop learning about the market. I assume most people on this forum are here to learn or teach others, so we are all students in some sense.

I don't have enough background to be trading others capital confidently but I just wanted to get other's opinions. Think it would be foolish to ask a question like this right before I'm ready to trade for others. Should be a question asked far before taking on that responsibility.

I get why you answered like that though. Most traders delve into their trading ventures too early and get burned. Obviously you've been here long enough to be slightly jaded by "newcomer" questions.

Thanks for the input though!
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  • #5
  • Sep 30, 2013 2:36pm Sep 30, 2013 2:36pm
It has a lot of if, ands, and buts determining what you do and do not need. also depends on what you want to trade. I would suggest looking up some regulatory organizations such as CFTC, SEC, NASD, NFA...........

If you want to do it, researching it first hand would be a great way to stat
A woman drove me to drink, and I forgot to thank her
  • #6
  • Sep 30, 2013 5:11pm Sep 30, 2013 5:11pm
Quoting simpleguy
It has a lot of if, ands, and buts determining what you do and do not need. also depends on what you want to trade. I would suggest looking up some regulatory organizations such as CFTC, SEC, NASD, NFA........... If you want to do it, researching it first hand would be a great way to stat
Nice! Thanks for the advice.

I've contacted a few hedge fund firms and lawyers. Seems like most of the licenses are required just to speak to clients and give advice on the market. Getting your CTA requires the series 3, 30 and 34 as well. (These apply to the U.S. Not sure about outside of the U.S.)

Obviously having institutional experience helps as well.
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  • #7
  • Sep 30, 2013 5:28pm Sep 30, 2013 5:28pm
Quoting emanontrader
{quote} No longer a student. The status "Student" is simply there because I feel like you can never stop learning about the market. I assume most people on this forum are here to learn or teach others, so we are all students in some sense. I don't have enough background to be trading others capital confidently but I just wanted to get other's opinions. Think it would be foolish to ask a question like this right before I'm ready to trade for others. Should be a question asked far before taking on that responsibility. I get why you answered like...
Students become Traders, and Traders become Teachers, and the Teachers then become Master Traders................IMO
The More You Learn, The More You Earn.....
  • #8
  • Sep 30, 2013 6:29pm Sep 30, 2013 6:29pm
Quoting forexalien
{quote} Students become Traders, and Traders become Teachers, and the Teachers then become Master Traders................IMO
Even a "Master Trader" should always be a student of his craft. The day you believe you have completely mastered something is usually the day you are humbled with a new lesson. Just my opinion.

I've studied the the financial markets for a few years now and plan on continuing the learn new lessons everyday for the rest of my career.

Back to the topic of the thread:

These 2 law firms were able to give me most of the information I needed. Very informative and polite.

Ruddy Law Office, PLLC
Cott Law Group, P.C.

Bart Mallon from Cole-Frieman & Mallon LLP was also very helpful. He runs a hedge fund law blog. He also provides a free Series 34 Study guide that he wrote. Most likely getting the official study guide as well but it's always nice to get free study material.

Here is the link to his law blog:

http://www.hedgefundlawblog.com/
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  • #9
  • Sep 30, 2013 9:36pm Sep 30, 2013 9:36pm
Quoting emanontrader
{quote} Even a "Master Trader" should always be a student of his craft. The day you believe you have completely mastered something is usually the day you are humbled with a new lesson. Just my opinion. I've studied the the financial markets for a few years now and plan on continuing the learn new lessons everyday for the rest of my career. Back to the topic of the thread: These 2 law firms were able to give me most of the information I needed. Very informative and polite. Ruddy Law Office, PLLC Cott Law Group, P.C. Bart Mallon from Cole-Frieman...
Agree..............

If you are not always learning......................Your Dead..............!
The More You Learn, The More You Earn.....
  • #10
  • Sep 30, 2013 10:03pm Sep 30, 2013 10:03pm
I wouldn't let anyone touch my money if they didn't know if they were aloud to touch it.
  • #11
  • Last Post: Sep 30, 2013 11:32pm Sep 30, 2013 11:32pm
Quoting Sonofsin5
I wouldn't let anyone touch my money if they didn't know if they were aloud to touch it.
Kind of sad that you missed the point of the thread and all the follow ups but I guess that's just what you get when you're dealing with online forums.

This is a learning experience and starting this thread doesn't mean I am taking on investments right at this moment. I'm fairly young and this is something I want to potentially take on in 10-15 years. I was just wondering if there were people with knowledge of this at FF.

If anyone would like the Series 34 Study guide provided by the Cole-Frieman & Mallon LLP law firm then just PM me!
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