Attention: Prop & Hedge Fund traders. I need the Varsity for this question!

Dustin,

I think you can have certain strategies that will work by putting down 25k and getting $1M or more in buying power. My problem is, my strategy(and most strategies) can certainly expect to have a 2.5% drawdown. That does not mean my strategy is bad or that I don't use stops, but it does leave you with few strategies(mostly short term or some form of arb, IMO) that allow for less than 2.5% drawdowns. I know many quants that would have a tough time putting together strategies with such small drawdowns. Granted, I really do not like giving away 50% of my profits, either! If I had enough in my personal account, I would certainly go your route.

KCM
 
UDon'tKnowMe,

Thanks. After I looked at Trillium's site and some others, I feel like I'm getting closer. There seems to be a couple of lingering issues, though. They seem like they are geared towards daytrading strategies, and you are right, I am looking for places that don't have a problem without overnight directional plays. Also, from what I have read in other posts, these places start you off with 500k or $1M. Where can I go with a track record and get < $2.5M and 50/50 split or better for stocks? I'd really like $10M, but that seems unreasonable, I guess. Surely somebody out there gets good deals, right?

Thanks,
KCM
 
Quote from Don Bright:

The only "hanging" of oneself is done by one's self, LOL. No need to use "excess leverage" - trade the way you like, within risk parameters, keep your profits...up to you.


All the best in your search, regardless!

Don
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don you are a much better man than me. you are always very cordial in your replies. cheers to you! kfm seems like a nice guy but i think we have seen this type of person faaar too often in the "industry". wildly unrealistic capital requests with no proven trading record and hitting key words like "drawdown" and the real kicker phrase...i would like to trade from home...

man i remember the last guy who came to our office with experience in "pairs trading".

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lol i guess my experiences with people who came in touting their experience has bittered me after watching them have wildly spectacular self immolations. thank goodness our management keeps normal risk checks on these "high performing" traders now rather than allowing them to go hog wild right from the start.
 
Quote from KCM:

UDon'tKnowMe,

Thanks. After I looked at Trillium's site and some others, I feel like I'm getting closer. There seems to be a couple of lingering issues, though. They seem like they are geared towards daytrading strategies, and you are right, I am looking for places that don't have a problem without overnight directional plays. Also, from what I have read in other posts, these places start you off with 500k or $1M. Where can I go with a track record and get < $2.5M and 50/50 split or better for stocks? I'd really like $10M, but that seems unreasonable, I guess. Surely somebody out there gets good deals, right?

Thanks,
KCM
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KCM...like i said in the prior post you seem like a nice guy but you have unrealistic expectations. there is no place that will start you off with 500k-1M if you are putting zero capital down. i work at kershner trading (a place pretty close to what you are looking for) and you would start at 50k and be limited to 100 shares per position. also you would have a coach that makes sure you aren't losing too much money when you start.

you have to prove yourself first. if you think you need 500k that quickly then there is something wrong with your strategy. i have seen guys who demand more money all too often and none of them have been successful. if you are willing to actually prove yourself over a few months then you will definitely move up very quickly.
 
robbie380,

I appreciate your quick reply. Two things: Drawdowns happen. I'm sure I don't need to tell you this. Many would tell you, control the risk and the reward will take care of itself. I'm simply controlling my risk. A 2.5% drawdown is low. The quants at my fund would love it for their models. Number two: I will move or live anywhere to do this, but trading from home controls my expenses rather than being in NYC or similiar. Also, from reading this site, it seems like many offices have terrible traders in them, and I would like to stay away from that scenario.
I hope what I am about to say will not be taken as bragging, because this business has a way of humbling you very quickly. I have a profitable track record in my personal account over the past several years. Up until the start of this year, the trades were infrequent. This year, I have a much more frequent track record with very detailed records and, more importantly, risk controls. Also, please keep in mind, I have some discretion at the hedge fund where I work now. My average p/l swing is in the hundreds of thousands to the low millions every day. I've had this discretion for the last few years. They track how I do vs. a few benchmarks. I would have been fired by now, if my track record was poor.
I had an offer to run $1M-$1.5M with a 60-40 split and turned it down. Under that arrangement, $1M with a 10% year would net me 60K. No thanks. Bottom line, many of my friends that work for funds will get a carve out of around $10-25M with a 10-15% payout. They often have to wait a year or two before they get this carveout. Also, if you do the math, for someone who has been in the business for a while, this still does not add up to much. Unfortunately, my fund does not do carveouts and they seem to be in short supply around the street right now. That is why I am humbly coming to people like you to find out where I should go after I have a one year track record in my personal account at the end of the year. I appreciate your help.

Thanks,
KCM
 
robbie380,

I will gladly put down my money. I just don't want it tied to excessive leverage. So, the prop model is out for me. If it is some sort of sharing arrangement, sure. How much would I have to put down at Kershner to get $2.5M? Please don't say $2.5M! Ha, ha.

Thanks,
KCM
 
A typical deal with a 'real' HF would start you off at a minimum 10mm and this would depend on how much your strategy has scaled to already. They wouldn't give you 10mm if your track record was based on 1mm. 10-15% of profits is about right sometimes a bit higher but this is on top of your base salary which should be at least $100-150k. Using your numbers of 10% on 2.5% drawdown(btw, whats ur SR?) they probably give you 2x leverage for equities. So that works out to 300k bonus in ur first year on $10mm. If your strategy is really that good and can scale, the HF route is by far the best if you think you can run $1bn using this strategy.
 
We do hedge fund incubation.

We can assist with capital introduction along with legal / regulatory issues.

We are a good place to get your feet wet. You can focus on actual trading and not the other non-trading BS (and there is a lot of BS).

I'll post more about our Hedge Fund Incubation service in the near future.

In the mean time give me a call if you want more information.
 
Quote from KCM:

UDon'tKnowMe,

Thanks. After I looked at Trillium's site and some others, I feel like I'm getting closer. There seems to be a couple of lingering issues, though. They seem like they are geared towards daytrading strategies, and you are right, I am looking for places that don't have a problem without overnight directional plays. Also, from what I have read in other posts, these places start you off with 500k or $1M. Where can I go with a track record and get < $2.5M and 50/50 split or better for stocks? I'd really like $10M, but that seems unreasonable, I guess. Surely somebody out there gets good deals, right?

Thanks,
KCM
More...

I knew 3 traders that left First New York and went to Trillium to trade. They all held directional plays overnight, one guy would just create a portfolio like a hedge fund and re-adjust positions every few days. None of them put any money up, but they all had experience on top investment bank trading desks and trading records from FNY. That is why I thought they would be a good fit for you. However, this was about three or four years ago. Things might have changed there since, I don't know, I never traded there. You should give them a call and tell them about yourself and what you are looking for and see if they are willing to accommodate you. If you have experience and a good verifiable track record they will probably be willing to start you off with $2mil.
 
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