What is a Commodity Pool Operator? | Definition

Commodity Pool Operator (CPO)

I have been asked 3-4 times in the past quarter about CPOs or Commodity Pool Operator Funds. The CTA / CPO fund industry is over $350B in size and I believe it will grow to over $1 Trillion in assets over the next 7 years. Below is a Wikipedia definition of a commodity pool operator:

"A CPO is an individual or organization which operates or solicits funds for a commodity pool; that is, an enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures contracts or commodity options, or to invest in another commodity pool." National Futures Association (NFA) definition. The NFA regulates every firm or individual who conducts futures trading business with public customers.

A CPO will generally consist of an entity that accepts funds, securities or property for the purpose of trading commodity futures contracts. The CPO may also make its own trading decisions or more usually it will engage a commodity trading advisor (CTA) to do so on its behalf.

CPOs and CTAs are regulated by US federal government through the Commodity Futures Trading Commission (CFTC) with additional oversight from the National Futures Association NFA.

Related to What is a Commodity Pool Operator? | Definition

1. Sortino Ratio
2. Sharpe Ratio
3. Hedge Fund Terms & Definitions
   
4. R Squared
5. Draw Down
6. Appraisal Ratio
7. Omega Ratio
8. Treynor Ratio
9. Zero Coupon Bonds
10. Alpha
11. Portable Alpha
12. Active Premium

Tags: CPO Fund, What is a CPO Fund?, Commodity Pool Operator, Individual Managed Account, CTA Funds, Differences between a Commodity Trading Advisor vs. Commodity Pool Operator