I have 200k in my IRA, would like to trade it
- Thread starter BUTfr
- Start date
50/50 split on losses? LMAO, That could happen but it would have to be agreed upon.
It is well known the investor takes all of the risk when funding a trader, or a fund with his capital.
The only time I am aware of 50/50 split on losses being automatically accepted is when both parties are putting up capital usually equal amounts.
It is well known the investor takes all of the risk when funding a trader, or a fund with his capital.
The only time I am aware of 50/50 split on losses being automatically accepted is when both parties are putting up capital usually equal amounts.
i have experience in this situation in all ways. I have been a profitable trader for many years. You can search my name here and some of my old performance records used to get posted by others, not by me.
IRA's are tough to trade in that form, as you are prohibited from going short, or from using any kind of ratio spreads that would make you short. You also are limited to settled funds, so you cant really scalp in there back and forth all day. What you can do is sell covered calls against positions, but again, you can only break the spread one way, as you cant take the position off when you feel its opportune and just leave the juice out there.
The way around this is to go the self directed route and then send the money to the firm trading it for you. Then he is not similarly restricted, as long as the bulk of the money that he is trading is not IRA money. Of course, you run the risk there that the guy is legit as the money leaves your control.
This info is up to date as of a year or so ago which was the last time I took in any IRA money to trade. I think its still accurate but I would check if i were you. Good luck.
IRA's are tough to trade in that form, as you are prohibited from going short, or from using any kind of ratio spreads that would make you short. You also are limited to settled funds, so you cant really scalp in there back and forth all day. What you can do is sell covered calls against positions, but again, you can only break the spread one way, as you cant take the position off when you feel its opportune and just leave the juice out there.
The way around this is to go the self directed route and then send the money to the firm trading it for you. Then he is not similarly restricted, as long as the bulk of the money that he is trading is not IRA money. Of course, you run the risk there that the guy is legit as the money leaves your control.
This info is up to date as of a year or so ago which was the last time I took in any IRA money to trade. I think its still accurate but I would check if i were you. Good luck.
rmorse
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There are some firms out there that specialize in being custodians for IRA's. They allow you to invest your IRA in an LP or hedge fund. Understand two things. Hedge fund trading is not always appropriate for trading retirement money. Also, monies earned from this type of investment might be partially taxable if they use leverage. The portion of the trading income derived from the IRA investment is tax deferred, but the income from the leverage is a taxable event today. It's called, "Unrelated Business Taxable Income."
Bob
If OP wanted to go the hedge fund route, the information is readily available. He asked what would be a fair deal for a trader to trade his $200K. He can make any deal with anyone he wants. Nothing is "automatically accepted."
Obviously no one serious would consider trading through an IRA under his name. He is looking for someone who is already trading, and it is no big deal to open a partnership account and he can add his $200K to whatever the trader wants to put in. The only question is why would a trader agree to take $200K from a stranger when he has his own liquid funds sitting outside his trading account and people he knows who want in? The short answer is, he wouldn't.
It is laughable to think a trader will take OP's $200K for a hedge-fund type split of 2/20. I may not know much about the hedge fund industry, but the person who thinks that's a fair offer doesn't know any traders.
The problem for OP is that people who are willing to enter into a deal with him are likely not worth giving money to. Loss sharing is an attempt to weed out the wannabes.
Yeah I would not trade through an IRA.
and I agree, investors definitively need a way to filter through the traders that are highly successful and those that are not.
but if you think about the loss splitting for a moment. Why would a successful trader need to trade someone else money at all? and then split losses?
After all if he is successful he can manage his own money and not worry about investors, and how they whine and complain when there is a 5-10% drawdown and threaten to pullout, among many other headaches that investors cause.
Successful traders look to take on capital from others to increase their profit/income potential without added risk.
Look at Linda Raschke. Professional successful trader since the 80s with her own capital. Now trading other people money, or firm money. Do you know why she did this? Because she already made her millions and doesn't want to give it back trading her own money. Her track record allows her to trade others money without any risk to her.
Only two ways investor can be sure he is putting his money in the right place.
#1. Someone capital matches him and they agree on loss splitting, why a successful trader would do this I dunno?
#2. Trader provides audited track record.
In both cases though when ever you go to open a new account anywhere these days the risk disclaimer says past performance does not indicate future performance and you money is at risk and you can even go negative and lose your house! blah blah.
In any case people are faking records to get a foot in the door.
So why bother with any of this crap both for Investor, and Trader? What a headache.
and I agree, investors definitively need a way to filter through the traders that are highly successful and those that are not.
but if you think about the loss splitting for a moment. Why would a successful trader need to trade someone else money at all? and then split losses?
After all if he is successful he can manage his own money and not worry about investors, and how they whine and complain when there is a 5-10% drawdown and threaten to pullout, among many other headaches that investors cause.
Successful traders look to take on capital from others to increase their profit/income potential without added risk.
Look at Linda Raschke. Professional successful trader since the 80s with her own capital. Now trading other people money, or firm money. Do you know why she did this? Because she already made her millions and doesn't want to give it back trading her own money. Her track record allows her to trade others money without any risk to her.
Only two ways investor can be sure he is putting his money in the right place.
#1. Someone capital matches him and they agree on loss splitting, why a successful trader would do this I dunno?
#2. Trader provides audited track record.
In both cases though when ever you go to open a new account anywhere these days the risk disclaimer says past performance does not indicate future performance and you money is at risk and you can even go negative and lose your house! blah blah.
In any case people are faking records to get a foot in the door.
So why bother with any of this crap both for Investor, and Trader? What a headache.
buy 33 es contracts and sell them at 1347 this week