Don't know the legalities. It's been suggested not if it was proven that the intent was to 'manipulate' the market in some way. However, the whole area is grey and we all know the realities of the market. It probably comes down to legal speak and definitions like so much else in life. As far as I can see all we would be doing is trading as a harmonized group. No harm in that?
'I Have A Dream'- to all futures traders
- Thread starter cap'ncod
- Start date
Don't know the legalities. It's been suggested not if it was proven that the intent was to 'manipulate' the market in some way. However, the whole area is grey and we all know the realities of the market. It probably comes down to legal speak and definitions like so much else in life. As far as I can see all we would be doing is trading as a harmonized group. No harm in that?
And this would in reality be a managed account. Except that few of the collective "retail" members could pass the liquidity threshold required for discretionary investment vehicles, and therein lies the "rub" - who/how are the investment decisions being made? A vote ? Sounds somewhat disfunctional. Investment by committee vote ? (CALPERS, etc. )
first
define your markets, and your limited range of trading contracts, equities, bonds, etc.
then decide best source / execution practices.
at present, your open range agenda has not classified what type or investment approach and vehicles you would be focusing on or limiting your hedge fund to....
then, perhaps your questions might make better sense.
Quote from intradaybill:
What you do not understand about gravity? Ninna spoke in the language of math to simply tell you that 20% of the people control 80% of the cash in this world. No matter how many retail traders you pull together, rich people will overpower them.
http://en.wikipedia.org/wiki/Pareto_distribution
http://en.wikipedia.org/wiki/Pareto_principle
These are now high school subjects. Do you want to say that you did not go to high school?
intraday, are you also Ninna? who posted the comments I questioned her on?
its not likely that any high schooler would comprehend those common terms vis-a-vis investing $100,000,000 or even $10,000,000, or even $1,000,000
so are you saying, you went to high school? (impressive)
seriously,
both the thread starter, and the comments she posted need to have an overall qualifier on them, namely
what markets said investment pool (hedge) would be limited to...
if the limitation were specified to stocks (and stocks only) then many a hedge fund has succeeded hands down with that approach and simplistic objective opening statement. A common buy-hold - collect dividend - write call option strategy would almost guarantee success.
if the limitation were specified to commodities only, the perhaps the notion of a mathematical distribution (purely from an academic discussion and not a realistic discussion basis) might be appropriate.
if the limitation were specified to whatever the fund manager wanted to trade, then its not likely the fund would get started in the first place....
when is the last time a high schooler managed seriously large money?, let alone understood the massive issues involved? duhhhh
Okay, thoughts on this:
It is a pooled fund of independent, higher frequency traders that need the lowest fees and the best infastructure.
The first stage is one of soliciting interest from prospective members. How many? What requirements were?
Next, a consultation on what platform would be best suited to the members needs. Wish lists and practical issues would be discussed. Then a private software developer would be employed to design it. A bespoke front end that catered for the needs of a specific style of trading would be the goal.
Financial commitments: The costs of the front end project would be upfront costs. So would the connection to cme's api (if indeed it was the exchange we needed to connect to). Hosting agreements and server maintainence etc established.
http://www.cmegroup.com/globex/trading-cme-group-products/
So far we have been completely independent and have not used any third party software or network. We would all connect directly to our own server at the exchange.
Clearing: there are many clearing members that we could use but what about becoming a clearing member with all the benefits that would provide? I don't know much about this but financial size could be key. This is the summary from the cme:
http://www.cmegroup.com/company/membership/files/BenefitsSummary.pdf
Self clearing would enable us to avoid any contact with potential competitors but the financial requirements could be prohibitive. If there were 200 of us..maybe.
The entitiy could be legally regulated by some form of trustee arrangement with lawyer. We would all have equal ownership. The liability side would have to be hammered out but with adaquate risk safeguards at the platform level...
Is it crazy? Go easy on me guys.
It is a pooled fund of independent, higher frequency traders that need the lowest fees and the best infastructure.
The first stage is one of soliciting interest from prospective members. How many? What requirements were?
Next, a consultation on what platform would be best suited to the members needs. Wish lists and practical issues would be discussed. Then a private software developer would be employed to design it. A bespoke front end that catered for the needs of a specific style of trading would be the goal.
Financial commitments: The costs of the front end project would be upfront costs. So would the connection to cme's api (if indeed it was the exchange we needed to connect to). Hosting agreements and server maintainence etc established.
http://www.cmegroup.com/globex/trading-cme-group-products/
So far we have been completely independent and have not used any third party software or network. We would all connect directly to our own server at the exchange.
Clearing: there are many clearing members that we could use but what about becoming a clearing member with all the benefits that would provide? I don't know much about this but financial size could be key. This is the summary from the cme:
http://www.cmegroup.com/company/membership/files/BenefitsSummary.pdf
Self clearing would enable us to avoid any contact with potential competitors but the financial requirements could be prohibitive. If there were 200 of us..maybe.
The entitiy could be legally regulated by some form of trustee arrangement with lawyer. We would all have equal ownership. The liability side would have to be hammered out but with adaquate risk safeguards at the platform level...
Is it crazy? Go easy on me guys.