Hypothetical question

[local]

Quote from Cache Landing:

[B. The top guys (or guy because you'll likely only find one) isn't worried about losing money and knows the bonus will dwarf the base. His driver is large bonus to reinvest using the same strat. Thus, the mediocre are the only ones who care about the base as they won't make a large enough bonus to pay the bills, but they will make you enough to keep them around. [/B]

Agree with Cache, the incentive for an experienced professional is the bonus. I would eliminate the base salary and increase the % bonus. This would eliminate those that are less serious. Also, increase the time, 3 years not enough, seen too many with short term success blow up because they thought they knew everything.

Regards, local

 

[Cache Landing]

Quote from local:

Agree with Cache, the incentive for an experienced professional is the bonus. I would eliminate the base salary and increase the % bonus. This would eliminate those that are less serious. Also, increase the time, 3 years not enough, seen too many with short term success blow up because they thought they knew everything.

Regards, local

I think that time is a bit overstated though. The more important thing is correlation, and I'm not just talking about directional correlation with broader market. I think he should be more concerned with the performance correlations with respect to direction, volatility, currency valuation, etc. IOW, if the track record was only 6 months long but held almost no correlation to market direction, market volatility, inflation, or commodity prices, I would take that hands down over one that was 10 years long but carried high correlation to any of the above. Low correlation across all arenas trumps history for sure.

The longer the track record requirement, the lower the quality that you are actually gonna find. Anyone with consistent high returns over even 6 years is going to laugh at a $2MM offer.

Also, the one thing that the base pay offers is the concept of taking some stress off and reducing emotion during the first year at least. this is probably beneficial enough to keep the base pay in place. Traders do weird things when they must win to eat.

 

[Lucias]

I doubt those with that level of experience will be interesting because they don't know you. It is not just about the money but about what your firm offers.

I'd imagine at a tier 1 firm like First New York provides their prop traders get access to a lot of institutional support and research. Kershner claims to provide their traders with quants for research and programmers for strategy implementation.

You'd need to demonstrate you have the infrastructure, research, commitment, etc to attract people with prop experience of making several million per year, I'd imagine.

Without a base salary, it will be hard to attract professionals. Most firms, at least, offer a small draw for the first 6 months.

Quote from Crispy:

Let’s say I could offer this to you -

A position on a proprietary trading desk in NYC. True Prop, not retail type plop your contribution down, get levered up. But I provide all capital, you get a very competitive base salary(75k-100k) to pay the bills and 20% of net production end of year bonus. You start with 2mm in your book and built out to 10mm as you prove yourself real time. You trade equities, futures and options on them. Strategy and time frame irrelevant. You just need to produce, how you get there is up to you. Risk is in place, all data, Bloomberg terminals and technology.

The question -

How many traders who would be interested in such a deal could actually provide a minimum of three years verifiable track record?

 

[bone]

I can get you a better deal in Chicago with same bona fides.

For size.

 

[bone]

Without a salary ? Cheap cheap cheap. Hell, I'd hire those guys with my own capital.

BTW, what is your "hypothetical" capitalization for an incoming trader ? Fair question.

 

[local]

Quote from bone:

Without a salary ? Cheap cheap cheap. Hell, I'd hire those guys with my own capital.

B]

OK Bone, get ahold of me and let's make a deal.

Regards, local

 

[bone]

Quote from local:

OK Bone, get ahold of me and let's make a deal.

Regards, local

You have my PM, shooter. I have a FEIN account with the IRS and Illinois, my accountant does the payroll, but when I fire your ass I will contest your unemployment benefits request.

 

[local]

Quote from bone:

You have my PM, shooter. I have a FEIN account with the IRS and Illinois, my accountant does the payroll, but when I fire your ass I will contest your unemployment benefits request.

As an extra bonus I will even teach you how to trade spreads.

regards, local

 

[Spearhead]

Interesting thread. So where do I sign up for this hypothetical job?

I already trade full-time anyway so having a base salary and more money to trade with, and someone footing the bills for subscription services are all pluses.

I do have 3+years verifiable trading records (up about 450%) and have never worked on wall street or a prop shop.

 

[bone]

Local, please be assured that it would not be the first time that I hired someone smarter than I myself.

Also, let me state for the record that I have paid out more for a trader working under my employment than I earned for the same year. Naturally, he trades his own account these days, but he still calls all the time in the evenings just to shoot the shit. Shows up unannounced for the holidays. Sends silly things in brown packages via FedEx from overseas jaunts. He collects pistols. And then puts them in Lexan cases with little halogen lights hovering overhead. Kinda like a wandering little brother. With liquidity.