Insights & Education · 03 · The structure
The managed account.
A futures SMA is the structure through which a CTA manages your capital. The defining feature: the account is yours. It is opened in your name at a futures commission merchant; the advisor holds only a revocable license to trade it. Your money never touches the advisor's firm.
Money & authority
How the money and the authority actually flow.
Your money never flows to the advisor’s firm — not at opening, not at closing, not ever. Funds move only between you and the FCM.
Your money never flows to the advisor’s firm — not at opening, not at closing, not ever.
| Futures SMA | Fund / pool | |
|---|---|---|
| Your wire goes to | Your own account at the FCM | The manager's vehicle |
| What you own | The positions themselves | Units of the vehicle |
| Getting out | Business-day, subject to open positions | Redemption windows, notice periods, gates |
| Tax paperwork | Form 1099-B from the FCM (Section 1256) | Schedule K-1, often delayed |
Notional funding — understand it before you use it
Some clients fund the account below its agreed trading size (e.g., $250,000 of cash trading a $500,000 program allocation), keeping the rest at their bank. The program trades identically either way — but every gain AND every loss doubles as a percentage of the cash posted, fees are charged on the full nominal size (at 50% funding, a fee expressed on nominal is twice as large as a percentage of cash), and margin calls arrive sooner. NFA rules require a signed confirmation of the nominal size before the first trade.
End to end
From first conversation to funded account.
Qualify
QEP status is confirmed under CFTC Regulation 4.7.
Review & agree
Program materials are furnished; the advisory agreement is executed.
Open the account
You open your own account at the FCM, which runs its standard KYC/AML process.
Grant the LPOA
You sign the limited power of attorney — trading authority only — and the fee authorization. If notional funding is used, NFA rules require a signed confirmation of the nominal size before the first trade.
Fund
You wire to the FCM — never to the advisor.
Trading begins
The account trades per the program; no action is needed from you.
Monitor
Daily FCM statements come to you directly, independent of the advisor, plus monthly advisor reporting.
Behind the scenes, the advisor files quarterly performance reports with NFA (Form PR) and maintains records open to regulator inspection. When a program trades many accounts, orders are placed as a single bunched order and allocated post-execution under CFTC fairness rules: no account may consistently receive favorable or unfavorable treatment, and average-price systems give every account the same fill price. The $1M account and the $10M account get proportionally identical trades.
Fees
Fees, in plain English.
After a drawdown, no incentive fee is earned until the account recovers past its prior peak — the manager is never paid twice for the same gain.
After a drawdown, no incentive fee is earned until the account recovers past its prior peak. The manager is never paid twice for the same gain — and is only paid for new ones.
Getting out
No lockups, no gates, no notice windows.
You may revoke the trading authority at any time, instruct liquidation (or take the positions over, or transfer them to another broker), and withdraw your cash — typically available the next business day once positions are flat. Practical caveats, honestly stated: open positions close at prevailing market prices, accrued fees are settled per the agreement, and stressed markets can make exits more expensive. Compare that with the hedge-fund norm of quarterly redemption windows, 30–90 day notice, lockups, and gates.
The FCM
Why StoneX — our choice of FCM.
Because the FCM holds client funds, the choice of FCM is the most consequential structural decision an advisor makes on a client’s behalf. Saratoga clears client accounts at StoneX. The selection criteria: scale, operating history, and publicly audited financials in the firm that holds the money.
Clearing futures since
Founded as Saul Stone & Co.; among the first clearing members of the CME (1938).
Publicly traded
NASDAQ-listed, Fortune-ranked — audited financials anyone can read.
Among the largest non-bank FCMs
In the U.S. by required client segregated funds, with institutional managed-account infrastructure.
The FCM can be verified independently, the same way as the advisor: StoneX’s FCM entity is CFTC-registered and an NFA member, and the CFTC publishes every FCM’s customer-segregated-funds data monthly on cftc.gov — the firm holding the money can be monitored, every month, from a government website. StoneX is not affiliated with Saratoga; account terms are established directly between the client and the FCM.
Educational material only. Futures trading involves substantial risk of loss and is not suitable for all investors; you may lose more than your initial deposit. Nothing on this page is an offer to sell or a solicitation of an offer to buy any interest in any trading program, separately managed account, or other vehicle, and no performance of any Saratoga trading program is presented. Third-party figures are drawn from sources believed reliable as of June 2026 but are not guaranteed. Saratoga Capital Advisors, LLC is a CFTC-registered commodity trading advisor and NFA Member (NFA ID 0578068).