Chicago FX operation

M

Maverick74

I'm trying to gauge the interest in a Chicago prop FX operation. I'm looking to start an FX desk. Products offered would be spot, forwards, swaps, vanilla options, exotics and futures. All done in a cross margined haircut account. Our dealing desk at Fimat trades with 50 banks and makes very tight markets.

I'm trying to determine if I should just do this with a few traders internally or open it up to a big operation 24 hours around the clock. This is not a recruiting thread as this desk is not operational as of yet and if and when it does get set up, I'll advertise it locally, not through ET. I just want to see if it's worth the energy and effort to do it. Maybe hear some of the pros and cons.
 
From a business perspective only, as my trading experience is limited. Prior to my Joe Lunch Bucket career I have owned/managed two businesses. Yes, they both failed, so I can tell you how to do that. If you want to fail, start big. A growing business is much easier to manage than a shrinking one.
Beyond that, make sure you have some people in place that you can delegate certain responsibilities. And of course, be properly capitalized, figure if anything bad can happen, it probably will. Have a contegancy plan for the inevitable perfect storm that comes up. And last, but not least, ASK QUESTIONS. Inflated ego will bring you down, and right quick. Good luck with your endeavor!
 
Good luck Maverick74! I like your idea, here in Houston, I have spoken to couple of the local traders with the same type of idea.

Keep us posted.
 
I think there are too many guys on here simply trading FX spot at bucket shows. I really don't see the edge in doing that. You have to be in the derivatives market in my opinion. I may just have to hire young kids out of college and put them on salary and teach them options.
 
I can't believe there are not more FX option traders on here. Jeez, about 5k of you guys trade the spot. Very interesting, maybe that's a good thing.
 
are you proposing to make markets or take markets in FX? or would your group make markets and the ET crowd take your prices?

if you are setting up a real prop desk (not like a day trading shop) then that's entirely different.
 
Quote from rosy:

are you proposing to make markets or take markets in FX? or would your group make markets and the ET crowd take your prices?

if you are setting up a real prop desk (not like a day trading shop) then that's entirely different.
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This would be a serious operation. We would not be market makers. Mostly derivatives. I'm toying with several different business models. This would not be a daytrading bucket shop.
 
Quote from ChiBondKing:

Mav, what would be your requirements for entry if someone were interested in participating?

-c
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Well, I think there would be 3 divisions. A simple prop account for guys that want to come in and have access to these products with risk based haircuts and cross margining. Second group would be salaried traders that simply execute my trading strategy. And third group would be a fund that a group of traders would trade out of. We would pull these guys out of the first two groups.

So there would be different requirements for each group.
 
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