Quote from nitro:
I am not sure I understand what you are offering with your idea to set up an "FX desk."
1) Are you offering a proprietary deal or a professional deal?
2) What advantage does it offer over trading currency futures at the Chicago Merc?
3) Is this more for trading options or the underlyings?
nitro
1) Both. One group would be guys who simply wanted to come in and do their own thing. We would provide them access to the cash and OTC markets, in a risk based haircut account with cross margining. The cross margining will allow all your positions (spot, FX futures, forwards, CME FX options, cash options, exotics) to all be grouped together to generate one risk report. You simply cannot do this in a retail account nor could you ever have access to cash markets without a million dollar line of credit with a bank.
Another group would be trading on salary. A friend of mine is running a very similar model to this. He gets some smart kids right out of school that will work for pretty cheap just to learn to trade. They make enough to live on and then get a bonus at the end of the year. They would simply be executing my strategy.
The other group would trade out of a fund. They would not have any money up. However, I would be pulling guys out of the first two groups to put into this fund. I refuse on principal to take any guy I don't know, track record or not, and put them into an environment where they are trading someone else's money. You have to earn it.
2) As far as FX futures, I'm not interested in directional traders. I already know what the success rate is for guys taking swings in FX (it's about 1%). I'm looking for smarter guys then that. If they want to do that on their own in the professional account, that's fine.
3) Groups two and three will be focusing primarily on derivatives. Group one can trade whatever the hell they want.
Like I said before, maybe this is a real shitty idea. So I welcome all criticism. I'm asking these questions now so I don't have to pay for them later.
