Many of the largest US hedge funds and investment advisors invest and trade in not only securities and bonds, but also in futures, swaps, and other derivatives. As a result, a fair number of US hedge funds and investment advisors are regulated by the CFTC. The fact that hedge funds and investment advisors are regulated by the CFTC is not common knowledge because most people focus on the fact that funds and investment advisors are known for their securities trading, but a great deal of funds and investment vehicles also trade in interest rate derivatives, a circumstance that brings them within the CFTC’s regulatory ambit. Persons that are paid to give trading and investment advice regarding derivatives are called “commodity trading advisors” (CTAs).

As discussed in Chapters 6 through 9, computers and software programs can, or soon will be able to, independently do all of the foregoing activities. As such, the legal and regulatory system must be prepared for the prospect of digital intermediaries operating in the futures markets.

With each passing day, the futures markets continue their transition to largely electronic ecosystems for algorithmic, software robots. The automation of these markets is part of a broader trend in financial services whereby the use of computerized systems is expanding into areas of financial firm operations that had not previously been thought amenable to algorithmic control. That’s not to say that humans are no longer playing important roles in financial services in the markets for futures and other derivatives, but the scope of human roles is diminishing as algo bots become capable of performing more and more tasks that were once the sole responsibility of human traders, derivatives salespeople, risk analysts, and more. As mentioned in the Introduction, the computerization and automation of financial markets is generally associated with the rise of “financial technology,” commonly referred to as “FinTech” or “Fintech.”

Imagine a world filled with sales robots that follow humans on the street while displaying a continuous stream of advertisements and commercials. Or imagine a place where robots try to sell their services to humans in a hyperaggressive fashion, without stopping their sales pitches even after being refused, on the grounds that they only obey their owners, so they will only follow the instructions (such as “go away”) of people who agree to purchase them. Science fiction writer Philip K. Dick dreamed up just such a world in his short story Sales Pitch, which was originally published in Future Science Fiction magazine in 1954.