Not not all etrade offices are closed. I use lightspeed till to this day and nothing has changed with me.FACT
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From Prop firm to prop trading for a Hedgefund
- Thread starter Cre8UrF8
- Start date
Quote from sle:
does not make sense at all - a normal fund would take AM fee of anywhere from 1 to 3% and 10 to 20% of the gains. Why would they even think of hiring someone for on the conditions described?
to pay for office expenses with commissions generated by daytraders. this set up is not exactly employed by established funds, rather smaller ones.
Quote from Copernicus:
to pay for office expenses with commissions generated by daytraders. this set up is not exactly employed by established funds, rather smaller ones.
Thats why its not a sound idea. Because its only a secondary thing a hedgie manager might do.. if u have the smallest drawdown.. they will probably be quick to boot.
Stick with prop because there business model is designed to handle traders.
Trend Fader,
From looking at your journal it appears you are trading a small amount of capital, and are swing trading a 100-400 share position. It doesn't appear you have any prop experience or experience trading with a large amount of buying power, and that you swing trade a retail account from home part time? Why do you feel so motivated to throw in your comments and opinions as if you are an authority on the subject when have no experience or first hand knowledge about prop trading or trading with leverage?
From looking at your journal it appears you are trading a small amount of capital, and are swing trading a 100-400 share position. It doesn't appear you have any prop experience or experience trading with a large amount of buying power, and that you swing trade a retail account from home part time? Why do you feel so motivated to throw in your comments and opinions as if you are an authority on the subject when have no experience or first hand knowledge about prop trading or trading with leverage?
Quote from Casey30:
What are the rates and for what type of volume. All you mentioned was leverage, which doesn't sound that great anyways. Also, 95% percent doesn't sound all that great either, prop pays 99%. So, if you make a mil, your going to give the hedge 40K a year besides all the commissions that you will pay(which you haven't stated either)? No thanks.
Agreed, there is nothing special about that deal. The only advantage I noticed is that you do not have to be licensed. Even then, there are prop firms out there that work without licenses.
BTW, Merrill/Echo is not the only place that has hedge funds with those types of arrangements. A place I interviewed at a couple times and still keep in touch with the head runs, a hedge fund which allows traders to trade like it's prop with competitive rates & levearage (and 99% payout). At the same time, they offer additional systems & services that traders may use for a higher commission rate and an 80/20 split.
I didn't start this thread to sell people on this deal. I'll admit it is not the best deal out there, but it is a good deal and competitive with deals at prop firms. You will never get the best deal because "the grass is always greener on the other side of the fence", and firms are always offering a better deal then the the firm.
When I look for a deal the commission and payout numbers aren't the only thing I look for. I look for a balance between these numbers and good reliable software, good honest management and a place with other profitable and successful traders. I can make money trading, I don't need to get lower commissions in order for me to become net profitable. And I am willing to give up 4% of my payout for other things I see as being beneficial.
I started this thread to ask why this type of setup isn't more popular? I don't see any drawbacks of this setup as compared to prop shops? The hedgefund gets the opportunity to discover good traders and increase their volume which will help lower their rates and costs. Traders aren't one out of several hundred traders at a firm so they can get more attention for a problem they have, and the fund would probably be more flexible than a firm. It could lead to more opportunites if they are a good trader. They don't need to be licensed and it does look better on a resume.
When I look for a deal the commission and payout numbers aren't the only thing I look for. I look for a balance between these numbers and good reliable software, good honest management and a place with other profitable and successful traders. I can make money trading, I don't need to get lower commissions in order for me to become net profitable. And I am willing to give up 4% of my payout for other things I see as being beneficial.
I started this thread to ask why this type of setup isn't more popular? I don't see any drawbacks of this setup as compared to prop shops? The hedgefund gets the opportunity to discover good traders and increase their volume which will help lower their rates and costs. Traders aren't one out of several hundred traders at a firm so they can get more attention for a problem they have, and the fund would probably be more flexible than a firm. It could lead to more opportunites if they are a good trader. They don't need to be licensed and it does look better on a resume.
Quote from Cre8UrF8:
I started this thread to ask why this type of setup isn't more popular? I don't see any drawbacks of this setup as compared to prop shops? The hedgefund gets the opportunity to discover good traders and increase their volume which will help lower their rates and costs.
first of all more established funds dont need the trouble of having this set up, a question might come up some day, who are these guys, certainly dont want to say we took on some daytraders to help with costs, how does that make the fund look.
after few years of trading you have two groups of traders, ones that made it big and wouldnt consider this kind of deal, and ones who are getting by and would jump on something like this, but out of this second group maybe 1 in 1000 can make in a hedge fund world. these traders are "naturals for the game" and if you even daytraded for a while and didnt "make it" you certainy arent a natural and hedge fund will have no use for you other that to churn for them a little.
Quote from Copernicus:
first of all more established funds dont need the trouble of having this set up, a question might come up some day, who are these guys, certainly dont want to say we took on some daytraders to help with costs, how does that make the fund look.
after few years of trading you have two groups of traders, ones that made it big and wouldnt consider this kind of deal, and ones who are getting by and would jump on something like this, but out of this second group maybe 1 in 1000 can make in a hedge fund world. these traders are "naturals for the game" and if you even daytraded for a while and didnt "make it" you certainy arent a natural and hedge fund will have no use for you other that to churn for them a little.
The scenarios you mention are the same as if they went to a prop shop. Why wouldn't "the ones that made it big consider this deal"? This deal is ideal for them.