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Yes, if you can avoid the $1000 annual membership fee, it makes sense to do so. You might just as well have your clients open their accounts and give you power of attorney to trade them. If you don't need to register, you don't need a CTA "company" and the disclosure doc and so on. You'll...

Hedge funds in the US are typically structured as either a limited partnership or a limited liability company. It is easy to form these business entities. Any business lawyer can do it for you. Or there are firms on the internet or in entrepreneur magazines that could do it for you. Or you...

Do you think the NQU2 (currently 1002.50) will drop below the ESU2 (currently 969.75) this month?

That chartpattern.com guy's Fortune article is pretty interesting. 10,000% return and $18 million in his pocket. Notice that he copied the entire Fortune article web page onto his own website -- the Time Inc. copyright notice and all! I'm sceptical he had permission.

$200k is the maximum capital contribution for an exempt commodity pool. It is an NFA/CFTC number. If you will be trading equities and not futures you won't be subject to NFA/CFTC regulation and the number won't apply.

Correct on all questions. Even though I don't need to, I am registered with the CFTC and have taken the Series 3. When I cross the $200k line all I'll need to do is start paying the $1000 annual NFA membership fee (on top of the $100 annual CFTC registration fee) and get an annual audit. I'll...

You can have up to 35 non-accredited investors in a hedge fund. Not all of our investors are accredited, but they should all be able to afford to lose their entire investment and the Schindler Fund should be just a small portion of their portfolio. We've got just under $2 million under...

I would suggest you label your weekly returns as "preliminary" and apply the performance fee to them. You will still only actually deduct the performance fee at the end of the quarter, though. So if you start out very profitable at the beginning of a quarter you will show preliminary...

No, your equity chart won't drop because of the performance fees. You equity curve would drop if you were plotting results without taking into account performance fees and then all of a sudden applied the performance fees. But that's not what you should do. Your equity chart should include...

13% of US households have a net worth of $1 million or more.

Having less capital to invest because you had to pay a lot in taxes won't affect your <b>percentage</b> returns. Percentage returns are what is interesting, not absolute dollar returns. If you made $30k on $100k prior to April 15th, you've got a 30% return so far. Then you withdraw $55k and...

That's the Catch 22... You can't justify the formation of a fund without some committed investors, but you can't get committed investors for a hypothetical fund. I started the Schindler Fund on a shoestring. I'm not a lawyer, but I used to write reinsurance contracts as a reinsurance...

You asked about hedge funds having a lot less capital to trade with after April 15th arrives... A few comments... -- If you are making so much money for your investors that their April 15th taxes are so much that they need to make a substantial withdrawal, then you are going to have no...

And about auditing your results... I would say you could go to any CPA for your audit. You don't need to go to one of the Big Four (or Big Three, or however many are left). Not being an accountant, I would think your CPA should be able to audit your returns just based on your monthly...

Oh, and while hedge funds report results gross of taxes, they also report results net of expenses. So, while you may have made 30% for January to April 15th gross of taxes and net of brokerage commissions, you should still subtract out whatever your management and performance incentive fees...

If you want to calculate your return for a period where you have cash flows into or out of your account you would... -- calculate the return for each subperiod between cash flows, then -- geometrically link the returns for the subperiods to get the overall period return So for your...

We were a little more aggressive before starting the Schindler Fund and used a margin-to-equity ratio of about 20%. This is the maximum of the ratio of the account assets to the value of the stock indices underlying the futures positions we took.

On rereading what I wrote, I want to correct the statistics in my third paragraph... If the <b>median</b> bid is 50, then half the time you will get your entire order filled at the best price and half the time you will get some filled a tick higher.

Right now we trade only the NQ's and the Dax. Between the two markets there is plenty of room for us to grow. We are a tiny drop in the bucket in both markets. We never trade more than a couple hundred NQ's per day. Even so, to avoid slippage we don't just blast our trades into the market...

In all the backtesting I have done it doesn't make sense to scale into positions. If your strategy has a positive expectation and you get an entry signal, the best strategy is to put your entire position on. If more often than not the market is going to go in your favor (because your...