I'd like to hear what people think of this deal offered by a Prop shop in NYC....no capital commitment...start with $1mil box either way(ie. $900k long/$900k short) on overnights, dont have to hedge at all if you dont want but max $1mil either side..."no limit" on intraday, but more realistically say $3mill intraday.....50% split...$0.015/share or $45 ticket charge which ever is greater...no contract, so whatever you lose you dont to payback...
Interesting Prop arrangement
- Thread starter ForeverNewbie
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well that's the deal...not a firm that would look for traders on monster or craigslist...but thats the deal....I know first hand...
how can this firm last offering a deal like that? why would you pay 50% and assume all the risk on unknown guys when you can pay some talented hedge fund with a track record 20%. These traders can't overcome the 1.5c vig on the commissions and be close to profitable for you even on a gross basis. this isn't the bull market of the late 90s or the IPO game anymore where you can put a monkey in the seat. i'll take a shot on a $1 Million GOOG. Can I do it part time from home? Let me know when you can open my account.
they are structured as a broker/dealer, cleared through GS...40 traders....if you wanted to buy 1000 GOOG intra day...or maybe even overnight....you could...no remote trading...they are "somewhat" selective....but in a weird way...wont take any formal research analyst or IB bankers...must of traded somewhere else...which wasn't the case last yr...but is now....new firm....montly payouts....no fees....other than commiss..
I agree with NTB completely. No way you overcome that 1.5 cent vig. Zero chance. Let me put it this way. Very few guys today can be net profitable with .005 rates on stock. Maybe 10% tops. At a penny a share, maybe 2%. At 1.5, 0%.
Usually the vig is indicative of the opportunity that exists to make money. Rates came down on stocks because the profit margins dropped substantially since 2000. Good luck.
most hedge funds pay .01 to .05 to their prime brokers. Obviously, they get benefits from this increased rate and their turnover is not substantial. Funds that trade very actively can of course get this cost down- but if you want to trade through one of the big brokerage houses (MS, GS, BSC, etc) you are definitely going to pay more than going through some daytrading LLC outfit. Also, investors lend more credence to funds have well known service providers vs. smaller shops. So, to offer a rebuttal to the above posters, sure, you can trade profitably with the above mentioned commissions- but not on a high frequency system. it's all a matter of finding out what services you need and what type of clearing relationship suits your needs. for the average daytrader, I would have to agree- .015 is a high cost of doing business.....if you're a fund manager, it's the norm.
1) There is zero chance that this deal is real.
2) If the deal is even remotely close to what you wrote, then this firm will be out of business by New Years...if not sooner.
3) Please PM me the firms phone number. I want to open an account ASAP and roll the dice with $1,000,000 long and $1,000,000 short overnight...with NONE of my own capital at risk!!!!
LOL
Hate to tell you Horns...but the place exists and had a few guys put up 300k/400k net years(that net to the trader)....I know that its a different situation than trying to scalp or scrape $0.10 on a stock 50 times a day, but it exists...