Help regarding “Pooling of Money by Friends and Family in Trading”

Quote from Haroki:

This is the best way to go, IMHO.

1- everyone has their own acct.
2- everyone pays their own taxes.
3- everyone can withdraw funds whenever they want, with no internal balancing with the other partners.
4- anyone can quit whenever they want to go trade themselves.

I do this now for my sister, niece, nephew, and a couple of friends. I don't charge them, since it costs me nothing to piggyback their trades on mine, and I do absolutely NO paperwork.
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Haroki, do you mean to say that each one of them (my sister, niece, nephew, and a couple of friends) have their own accounts, while you do the trading for each of them individually? If that is so, how do you trade for each of them separately? Please do explain. Thanks! :)

Moreover, if you trade for each of them individually, then you do not get the benefit of trading a larger portfiolo, hence, how will the above procedure help? Please explain, thanks! :)
 
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Quote from Gyles:

Haroki, do you mean to say that each one of them (my sister, niece, nephew, and a couple of friends) have their own accounts, while you do the trading for each of them individually? If that is so, how do you trade for each of them separately? Please do explain. Thanks! :)

Moreover, if you trade for each of them individually, then you do not get the benefit of trading a larger portfiolo, hence, how will the above procedure help? Please explain, thanks! :)
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They all have their own accounts, and I trade it for them through the use of what IB calls a master account. Basically, I trade futures for them, and there's a deal where you dictate how many contracts each separate account buys/sells when you hit the transmit button. So if my default is say 30 contracts, I can split it up among all the accts - 5,5,4,7,2,3,3=30. I'm sure the same split could be done for stock purchases.

I have authority to place trades, but no authority to transfer money. So I can lose it for them, but I can't steal it. :D

I'm not helping myself at all, if that's your question. I'm doing it this way to help THEM out. By trading futures, I also eliminate the need to maintain $25k in each acct in order to avoid the PDT rule. So a larger portfolio is no concern of mine.
 
Quote from Haroki:

They all have their own accounts, and I trade it for them through the use of what IB calls a master account. Basically, I trade futures for them, and there's a deal where you dictate how many contracts each separate account buys/sells when you hit the transmit button. So if my default is say 30 contracts, I can split it up among all the accts - 5,5,4,7,2,3,3=30. I'm sure the same split could be done for stock purchases.

I have authority to place trades, but no authority to transfer money. So I can lose it for them, but I can't steal it. :D

I'm not helping myself at all, if that's your question. I'm doing it this way to help THEM out. By trading futures, I also eliminate the need to maintain $25k in each acct in order to avoid the PDT rule. So a larger portfolio is no concern of mine.
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Thanks Haroki for the explanations. :)

Thus, it seems that IB has a master account also. Is this different from the earlier mentioned accounts “Interactive Brokers (IB) friends and family account” and “Proprietary Trading Group Account”?
 
Quote from ashantt:

Never mix finances and family. It sure is a recipe for a disaster.
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You have a point ashantt. :)

My situation is that I need an amount of $100K in order to trade my strategy correctly, Since, I am not having the amount with me, I need to put together a pool of family and friends in order to raise the same.
 
I think biggie said it best.

"Money and blood don't mix like 2 dicks and no bitch, find yourself in serious shit."

If you need 100K to trade your strat, wait until you have 100K.
 
Quote from Gyles:

You have a point ashantt. :)

My situation is that I need an amount of $100K in order to trade my strategy correctly, Since, I am not having the amount with me, I need to put together a pool of family and friends in order to raise the same.
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If you have $25K and need 100k total to trade why don't you just open a prop account and get the added leverage? (unless of course you don't plan on doing this full time)

-RT
 
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