CTA Startup

Aaron,
do you have a suggestion which broker to use when managing several accounts? In IB, you can open a FA-account, but accessing different accounts through one TWS is not very user-friendly to me.
What are your experiences in this field?
Cheers and thanks!
 
Quote from josecruset:

Aaron,
do you have a suggestion which broker to use when managing several accounts? In IB, you can open a FA-account, but accessing different accounts through one TWS is not very user-friendly to me.
More...

Are you talking futures broker? Sure, most other brokers besides IB should be good for multiple accounts. They should have the capability so that you can execute one trade of multiple contracts and then have those contracts allocated to the separate accounts according to some allocation formula you set up beforehand.

Ffasttrade has good rates and will do the allocating. Or try some of the other ET sponsors. I'd say shoot off an email to a few brokers asking what their capabilities are for allocating among several managed accounts. If you don't hear back from them, well, they probably don't have the customer service capability to help you anyways.
 
I just have read the article about CFTS`s struggle in this area. I did not realize that notional funding is so popular.

Can anybody share his experience about this ? Looks like institutional clients like it more and more ?
 
Aaron or anyone else-
How do you pay yourself when running your own CTA? I know it depends on what type of entity you are set up as, but in general do you pay yourself a salary or do you basically get all of the advisor's fees? Also, what are people's opinions on insurance costs? Seems that is a big factor in starting on your own.
 
Quote from BGB:

Aaron or anyone else-
How do you pay yourself when running your own CTA? I know it depends on what type of entity you are set up as, but in general do you pay yourself a salary or do you basically get all of the advisor's fees?
More...

The CTA fees get paid to Schindler Trading. Schindler Trading is my sole proprietorship. If Schindler Trading were an LLC, then I could either pass the fees through to myself or pay myself a salary. I'd probably pay myself a salary to the extent I could stash that salary in a qualfied retirement plan. The rest would be pass through.
 
Aaron- Does your disc. document remove all of the liability associated with being a sole proprietor? Are there tax advantages of LLC over sole proprietor or vice versa?
 
Quote from BGB:

Aaron- Does your disc. document remove all of the liability associated with being a sole proprietor? Are there tax advantages of LLC over sole proprietor or vice versa?
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No, a disclosure document does not remove all liability — not for a sole proprietor or any other entity. It helps though. If you are concerned about personal liability, you might consider using an LLC for your trading business. There are other asset protection strategies that involve putting assets in your spouses name, using trusts, and using offshore domiciles.

One tax advantage of an LLC over a sole proprietorship that I can think of is that you can easily convert Sch. D capital gains into earned income by paying yourself a salary from the LLC. You need to have earned income to contribute to a qualfied retirement plan (IRA, 401k, etc.). Talk to Greentradertax or Wishcamper for more information.
 
Quote from TheStudent:

Aaron,

Could you share your thought process on choosing Sole Proprietorship vs LLC for Schindler Trading?

Thanks!
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I went with a sole proprietorship just because it is easier. I had enough to do with setting up the limited partnership and CPO. I've recently registered as a CTA and eventually I'll turn Schindler Trading into an LLC. Sole proprietorship is just the simple thing to do and you can always change to an LLC later.
 
Aaron and all practicing CTAs on the board-

I want to state an earlier question in a different manner. Hypothetically, as if you were just starting your CTA, can you give a number and breakdown of your startup costs? (Considering a minimal startup out of your own home.) Also, give a monthly or quarterly expense and breakdown. This would really help some of us who are considering such a move, in order to get a true picture of what the undertaking entails. Please include all factors that must be considered. thanks

BGB
 
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