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How does the CFTC protect participants from fraud and abuse?

The CFTC assists participants in trading futures by providing educational resources, protecting futures traders, and investigating complaints from traders on fraudulent acts.

What does the CFTC recommend I do to limit my exposure to fraud?

The CFTC recommends that you be wary of any company that purports to offer extremely high profits with little risk, firms that offer to pool your money with other people's money to trade in commodities, and, in general, firms that promise easy profits from trading metals, currencies, petroleum, or agricultural products; any unsolicited phone calls from trading companies; any firm asking you to send cash immediately; and any company asking for your bank information so that funds may be wired in or out of the accounts. You should never invest in futures contracts without first seeking expert outside advice, and investigating the firm you are considering using.

How may I investigate if a firm is legitimate and properly licensed to trade in futures?

You may investigate the legitimacy of potential trading firms by contacting the National Futures Association, checking out the disciplinary history with the CFTC, or contacting your state's securities commissioner or attorney general's office, among many other sources for information about fraud and abuse.

What are some basic principles that the CFTC recommends I follow when I am beginning to invest in commodities and futures?

The CFTC recommends that you follow a few basic principles before you begin trading in commodities and futures: the money you choose to invest is considered "risk capital," meaning you should be able to lose all of it without a detrimental effect on your total portfolio; you should investigate all the risk disclosure documents of the firm, and you should decide whether you will depend upon the advice of a broker or make your own decisions on trading activity. Additionally, the CFTC recommends you fully understand any financial obligations inherent with your trades in commodity futures and option contracts, that you fully understand sources of fraud and abuse exist within the firms that you may encounter (and that they may attempt to steal money from unsuspecting investors and traders), and that you should contact the CFTC if you have any problem or additional questions.

 
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