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Legal Q Regarding Trading Other People's Money


Hi all. I am wondering if anybody knows of any legal ramifications if I were to go out today and start offering to trade for either friends or family. I know absolutely zilch in the area so any advice would be good.

I am considering it because I am undercapitalised and despite a decent % performance the actual amount is too small to be useful for anything.

Thanks all.
That $500.00 for RTH and O/N
Hi Feng,
I'm going to disagree with mypvtofvo with respect to trading for 14 people. My counsel said that an unlicensed commodities trader may trade only for friends and family, with a Disclosure Agreement and a Power Of Attorney, for up to 12 accounts in aggregate. In aggregate, in this situation, includes your accountant, his / spouse, your attorney (and according to the law, maybe his / her spouse), you (possibly your spouse) and you can count the remaining. According to the CFTC guidelines, you may trade up to $500k. Any compensation arrangements are between you and the account holder, and do not include the brokerage firm. In other words, if they don't pay you it's a civil suit. Pay an attorney to write a strong Trader's Fee Agreement. Most accountants and attorneys won't work with you unless you have performed profitably for two - three years.
It is better for to read some more thoughts about the field that you would like to enter. In trading, you be wise in making decisions. Potentials are necessary on this field.
Originally posted by joshuabelanger

It is better for to read some more thoughts about the field that you would like to enter. In trading, you be wise in making decisions. Potentials are necessary on this field.

Cool Zen koan dude ... sounds like we drew from the same batch of fortune cookies at P.F. Changs last night.
I asked my broker how many accounts one may in reality trade without a CTA license ... he said his clearing typically allows 3-4 without asking questions and after that it's harder... the maximum they would allow is about 8, not more, due to increased risk. Ha, that's way below the 14 that the law says!!