Cftc trade options faq
The Commodity Futures Trading Commission CFTC has jurisdiction to regulate the futures markets with oversight over the entire industry.
National Futures Association regulates every firm or individual that conducts futures trading business with the investing public. Government regulations require the strict handling of customer funds used to participate in U. Funds that customers have deposited in an individual account with their futures commission merchant FCM to trade on futures exchanges located in the United States are required to be segregated held separately from any of the firm's own funds.
The amount segregated will increase or diminish as the customer makes or loses money from trading.
Trading Futures, Options on Futures and Forex FAQs
Customer funds are not subject to creditor claims against an FCM should it become financially unstable or insolvent, and customer funds can be transferred to another FCM if necessary. Finally, even though an FCM is required to segregate customer funds, customers still may not be able to recover the full amount of any funds in their account if the firm becomes insolvent and there are insufficient funds available to cover the obligations to all of its customers.
CFTC Responds to FAQ on Commodity Options | Dodd-Frank and the Law
Customer accounts are not insured. Customers should ask their broker about account protection and should be aware of the limitations imposed on the protection of the funds in their futures trading accounts.
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To learn about trading futures and options on futures, read NFA's booklet, " Opportunity and Risk: An Educational Guide to Trading Futures and Options on Futures.
To learn more about foreign currency forex trading, read NFA's brochure " Trading in the Retail Off-Exchange Foreign Market — What Investors Need to Know.
On exchange trading is the trading of commodities and contracts that are listed on an exchange. Off-exchange trading, also known as over-the-counter trading is the trading of commodities, contracts or other financial instruments that are not listed on exchange.
Off-exchange trading can occur electronically or over the phone.
Some foreign currency forex contracts are traded off-exchange. Visit NFA's Investor Information section of the NFA's website. NFA is the premier independent provider of efficient and innovative regulatory programs that safeguard the integrity of the derivatives markets. Disclaimer and Privacy Policy.