Moneyzine
Shop
English [GB]
Deutsch
Contents
/Investment Guides /Commodity Pool Operator (CPO)

Commodity Pool Operator (CPO)

Moneyzine Editor
Author: 
Moneyzine Editor
1 mins
January 11th, 2024
Advertiser Disclosure
Commodity Pool Operator (CPO)

Definition

The term commodity pool operator refers to an individual or organization that is responsible for soliciting funds and investing those funds in futures and options contracts. Participating in commodity pools allows investors to gain leverage while reducing risk.

Explanation

Also referred to as managed futures funds, commodity pool is a legal term defined by the National Futures Association, which provides the following definition:

"A commodity pool operator (CPO) is an individual or organization that operates a commodity pool and solicits funds for that commodity pool. A commodity pool is an enterprise in which funds contributed by a number of persons are combined for the purpose of trading futures or options on futures, retail off-exchange forex contracts, or swaps, or to invest in another commodity pool."

Commodity pools can be compared to mutual funds since they allow individual investors to pool their assets and conduct trades that would otherwise not be possible. Since the investor's funds can be spread over a larger number of trades, commodity pools can also reduce risk through diversification. A commodity pool operator will both solicit funds from investors as well as make investment decisions on behalf of the pool. A CPO may also hire a Commodity Trading Advisors (CTA) to make those investment decisions, which include futures, options, forex contracts, and swaps.

Related Terms

  • COMEX (Commodity Exchange, Inc.)
    COMEX (Commodity Exchange, Inc.)
    The term COMEX refers to a market where buyers and sellers can negotiate and enter into commodity futures contracts involving metals. COMEX was originally acquired by the NYMEX, which is part of CME Group.
    Moneyzine Editor
    Moneyzine Editor
    November 6th, 2024
  • Commodity Pool (Managed Futures Funds)
    Commodity Pool (Managed Futures Funds)
    The term commodity pool refers to an enterprise consisting of individual investors combining their funds to trade in futures contracts and options as a single entity. Commodity pools allow investors to gain leverage while reducing risk.
    Moneyzine Editor
    Moneyzine Editor
    November 6th, 2024
  • Commodity Trading Advisors (CTA)
    Commodity Trading Advisors (CTA)
    The term commodity trading advisor refers to an individual or organization that provides advice to a pool of investors in futures contracts and commodity options. Commodity trading advisors are regulated by the Commodity Futures Trading Commission as well as the National Futures Association.
    Moneyzine Editor
    Moneyzine Editor
    January 11th, 2024
  • Commodity Futures Trading Commission (CFTC)
    Commodity Futures Trading Commission (CFTC)
    The term Commodity Futures Trading Commission refers to an organization responsible for fostering open, transparent, competitive, and financially sound markets. The Commodity Futures Trading Commission is an independent governmental organization.
    Moneyzine Editor
    Moneyzine Editor
    November 6th, 2024

Contributors

Moneyzine Editor
Author
Moneyzine Editor
The Moneyzine editorial team consists of writers and content specialists with diverse backgrounds.
Moneyzine
[email protected]
Moneyzine is your trusted partner in financial empowerment. With our comprehensive guides, user-friendly calculators, and expert tips, we're dedicated to helping you navigate and shape your financial future.
About Us
Useful Links
Explore Moneyzine
Follow us
Statistics
Advertising Disclaimer

Please be aware that some of the links on this site will direct you to the websites of third parties, some of whom are marketing affiliates and/or business partners of this site and/or its owners, operators and affiliates. We may receive financial compensation from these third parties. Notwithstanding any such relationship, no responsibility is accepted for the conduct of any third party nor the content or functionality of their websites or applications. A hyperlink to or positive reference to or review of a broker or exchange should not be understood to be an endorsement of that broker or exchange’s products or services. Risk Warning: Investing in digital currencies, stocks, shares and other securities, commodities, currencies and other derivative investment products (e.g. contracts for difference (“CFDs”) is speculative and carries a high level of risk. Each investment is unique and involves unique risks. CFDs and other derivatives are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how an investment works and whether you can afford to take the high risk of losing your money. Cryptocurrencies can fluctuate widely in prices and are, therefore, not appropriate for all investors. Trading cryptocurrencies is not supervised by any EU regulatory framework. Past performance does not guarantee future results. Any trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Your capital is at risk. When trading in stocks your capital is at risk. Past performance is not an indication of future results. Trading history presented is less than 5 years old unless otherwise stated and may not suffice as a basis for investment decisions. Prices may go down as well as up, prices can fluctuate widely, you may be exposed to currency exchange rate fluctuations and you may lose all of or more than the amount you invest. Investing is not suitable for everyone; ensure that you have fully understood the risks and legalities involved. If you are unsure, seek independent financial, legal, tax and/or accounting advice. This website does not provide investment, financial, legal, tax or accounting advice. Some links are affiliate links. For more information please read our full risk warning and disclaimer.

Moneyzine 2024. All Rights Reserved.