CFTC Customer Protection:
Fraud Awareness, Prevention and Reporting
Trading Futures and Options: Protection Against Fraud
The CFTC is the Federal agency that regulates the trading of commodity futures and option contracts in the United States and takes action against firms or individuals suspected of illegally or fraudulently selling commodity futures and options. The CFTC's fraud awareness, prevention and reporting initiatives involve: educating futures market users, protecting futures market participants, and reviewing information and complaints that market participants send to us.
About the Futures Markets
Individual investors/traders or "retail customers" rarely ever trade commodity futures and options
Trading commodity futures and options is a volatile, complex, and risky venture
Many individual traders lose all of their initial payment, and they could owe more than the initial payment
Before you trade
Know the basics in futures trading
Consider your financial experience, goals, and resources and determine how much you can afford to lose above and beyond your initial payment.
Understand commodity futures and options contracts and your obligations in entering into them.
Understand your exposure to risk and other aspects of trading by thoroughly reviewing disclosure documents your broker is required to give you.
Know that trading on margin can make you responsible for losses much HIGHER than the amount you initially invested.
Quickly contact CFTC if you have a problem or question.
Watch out for these warning signs
Get-rich-quick schemes that sound too good to be true. Once your money is gone, it may be impossible to get it back.
Predictions or guarantees of large profits. Always get as much information as you can about a firm or individual's track record and verify that information.
Firms or individual who say there is little risk. Written risk disclosure statements are important to read thoroughly and understand.
Calls or emails from strangers about investment or trading opportunities.
Requests for immediate cash or money transfers by overnight express, the Internet, mail, or any other method.