Financial stability of sub LLC firms

Quote from kbeck:

trading 500k with 5k doesn't allow much for slippage or losses it seems. if you know a firm that i can do that with let me know. and even better if trader doesnt need a license.

k
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you dont get 100 to one out of the gate, its something you prove yourself to get. if you are a proven trader, with the documentation to back it up, getting 100 to 0ne is not a problem.

good firm risk control software and oversight is whats required. leverage is irrelevant.

surf
 
Quote from marketsurfer:

you dont get 100 to one out of the gate, its something you prove yourself to get. if you are a proven trader, with the documentation to back it up, getting 100 to 0ne is not a problem.

good firm risk control software and oversight is whats required. leverage is irrelevant.

surf
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name or website? thanx

k
 
can't we get a little better answer than "don't put in much money in case they blow up"? This is supposed to be a business and I am a professional. Geez, it looked in my meeting like they were well run???
 
I agree with you, and I hate to sound like a broken record, but (as in any business that you're getting involved in), simply check the balance sheets, be sure they are a broker/dealer or find their legal status at an exchange or NASD (as indivduals and as a firm), know who their clearing firm is....all this is pretty easy to do. If you need help reviewing the balance sheets, let me know (I knew all those years as an Accountant would come in handy, LOL).

Don
 
Don

Broken record? nah, this needs to be drilled into people. but... I realize Bright might not be for everyone but at least you guys are out there with the financials.

How does a real manager (llc manager) feel about the ability of a member to handle risk/money, when that same member has not made an effort to look into the financials of the firm he is joining?

Also, and I am not an accountant but, isn't it possible that a person could be joining a LLC that is already broke?
 
You need to look for liquid (cash) equity in the "Class A" member side of the LLC (the "owners" side) first. Then, you need to check if the owner's put any $$ in the "Class B" member side (trader's side) to protect the traders from some kind of blow up. If the "main" LLC is supportive of the "sub-llc" then you will be able to see their contribution (if they are joining in on the risk).

Find out where your money goes, and how you get it back and when. Once a week, twice a week, on request, whatever.

There are some good people out there, but there are many questionable relationships as well.

You get respect for doing due diligence in my book.

Don
 
No Offense Don, But isn't it more important to see who controls the LLC and how the funds can be divested in a blow up???

The bottom line is that it can be very deceiving...A firm could have 10 million in excess capital....but that doesn't mean he's going to use it.....he might just close the firm
 
No, that's where understanding how all this works comes into play. If, for example, we have $150Mil in our "Class A" member capital, and nothing in the "Class B" portion of the LLC (as how most trading firms are set up), you would be correct.

That is why we actually put $10Million on the traders' side of the LLC, all of which would have to be used if someone "blew up" - before any other trader would be affected. I really don't think any Bright trader would or could, lose all their money plus $10million, and even if they did we could choose to cover the difference (why risk our reputation for some $$).

(No offense taken, of course, "due diligence" is respected)

Don
 
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