how managed futures trade
managed futures can have various weights in stocks and derivative investments a diversified managed futures account will generally have exposure to a number of markets such as commodities energy agriculture and currency most managed futures accounts will have a stated trading program that describes its market approach two common approaches are the market neutral strategy and the trend following strategy 3market neutral strategies look to profit from spreads and arbitrage created by mispricing investors who employ this liquid alternative strategy frequently look to mitigate market risk by taking matching long and short positions in a particular industry in an attempt to achieve profit from both increasing and decreasing prices trend following strategies look to profit by going long or short according to fundamentals and or technical market signals when an asset s price is trending lower trend traders may decide to enter into a short position on that asset conversely when an asset is trending upward trend traders may enter into a long position the goal is to capture gains by analyzing various indicators determining an asset s direction and then executing an appropriate trade investors looking into managed futures can request disclosure documents that will outline the trading strategy the annualized rate of return and other performance measures 4