“Black box” hedge funds buy exchange seats to dodge brokers

Reuters – Some of the world’s top computer-driven hedge funds are buying exchange memberships to trade directly on the biggest commodities and financial futures markets, saving on the sizeable commissions normally paid to brokers.

Eager to improve returns and keep details of their ‘black box’ trading strategies as secret as possible, so-called CTA (commodity trading advisor) funds are buying exchange membership seats for hundreds of thousands of dollars.

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