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Is having your own hedge fund good idea vs. staying as prop.
- Thread starter PhiSigmaIota
- Start date
Quote from phenomena:
why is it, then, don that we see the forbes list flooded with hedge fund managers, and not bright traders? care to explain that one?
sure, if you have a network of high net worth individuals, access to pools of capital, institututional contacts who believe in you and your trading, and pedigree for yourself or at the minimum on your team-----you can make much more money as a hedgie than a prop trader.
HOWEVER, for 98% of traders, without the above---- prop is the SMART way to go.
surf
Quote from EricP:
Not sure why your 'example' hedge fund is not able to move to a cheaper broker. I ran a hedge fund for a couple of years, traded the capital through a direct access brokerage firm, and was paying less than half of Bright's commission rate at the time (much lower than that, currently).
So, while it's easy to pick and choose worst case examples to highlight points that you might want to make, we should 'keep it real' by letting people know that hedge funds are able to get extremely competitve commission rates, as well.
INFORMATION and ACCESS is what you are buying from prime brokers. INFORMATION is an EDGE and ACCESS is critical for success at a big level, TA/newswire via discount brokers is not an EDGE in most cases.
surf
Quote from marketsurfer:
sure, if you have a network of high net worth individuals, access to pools of capital, institututional contacts who believe in you and your trading, and pedigree for yourself or at the minimum on your team-----you can make much more money as a hedgie than a prop trader.
HOWEVER, for 98% of traders, without the above---- prop is the SMART way to go.
surf
oh, hi there DON.. you see, people don't just happen to have a network of high net worth individuals and hence access to 'pools of capital', or 'institutional contacts' who 'believe in you and your trading', these things are all developed over time... a cursory review of biographical text of most any established/famous hf manager will show that its a process, a status that was developed over decades...
also, i agree that 'prop' is a good way to go for most people... however what bright offers is NOT PROP! it is simply a leveraged broker... and the rates aren't competitive by any means!!! they start at 1c per share!!!! and now all of a sudden he talks about how he and his brother were able to engage in all these market neutral strategies vis a vis their floor trading, when in the past he has specifically advocated scalping almost exclusively... now that he's found a new cash cow (interest on overnight positions) he's pumping that.... bright trading is NOT A PROP FIRM... ITS A BROKERAGE!!!
Quote from phenomena:
oh, hi there DON.. you see, people don't just happen to have a network of high net worth individuals and hence access to 'pools of capital', or 'institutional contacts' who 'believe in you and your trading', these things are all developed over time... a cursory review of biographical text of most any established/famous hf manager will show that its a process, a status that was developed over decades...
also, i agree that 'prop' is a good way to go for most people... however what bright offers is NOT PROP! it is simply a leveraged broker... and the rates aren't competitive by any means!!! they start at 1c per share!!!! and now all of a sudden he talks about how he and his brother were able to engage in all these market neutral strategies vis a vis their floor trading, when in the past he has specifically advocated scalping almost exclusively... now that he's found a new cash cow (interest on overnight positions) he's pumping that.... bright trading is NOT A PROP FIRM... ITS A BROKERAGE!!!
hahaha, im not don, nor have i ever traded with bright---however, Don speaks the truth IN GENERAL in this regard.
are there exceptions, guys who came from nothing and spent years building their brand--- ABSOLUTELY. can it be done--sure-- does it takes years and brutal hard work?? YES. is it common?? NO. most importantly, earning enough living money while one is working on the above, without already being wealthy or having access, is improbable for most. try to make it while paying infrastructure, etc on a 2/20 split ( if lucky )-- more likely 0/10 for startup-- with under 10 mill. .
i don't know enough to comment on your second paragraph regarding bright/prop/ etc.
thanks,
surf
What about ditching the hedge fund route and put 500K into your prop account. Increase your leverage, your position holding power and keep 100% of profits?
Than you do not have to deal with the hedge fund administration headaches per se.
Than you do not have to deal with the hedge fund administration headaches per se.
Quote from phenomena:
oh, hi there DON.. you see, people don't just happen to have a network of high net worth individuals and hence access to 'pools of capital', or 'institutional contacts' who 'believe in you and your trading', these things are all developed over time... a cursory review of biographical text of most any established/famous hf manager will show that its a process, a status that was developed over decades...
also, i agree that 'prop' is a good way to go for most people... however what bright offers is NOT PROP! it is simply a leveraged broker... and the rates aren't competitive by any means!!! they start at 1c per share!!!! and now all of a sudden he talks about how he and his brother were able to engage in all these market neutral strategies vis a vis their floor trading, when in the past he has specifically advocated scalping almost exclusively... now that he's found a new cash cow (interest on overnight positions) he's pumping that.... bright trading is NOT A PROP FIRM... ITS A BROKERAGE!!!
Geez, both hostile and outdated, LOL.
You're right, we are not one of those old fashioned (mostly) "rip-off" type "prop" firms that force their traders into a lifetime of servitude and keep most the profits and fire those who lose money almost immediately.
And, our traders take their money out whenever they like, therefor they "have no money up" just the profits, like they would forced to keep in the "prop" firm anyway, since they have no control over their own lives and money.
I have never advocated simple scalping, heck going back a decade or more I have the same 8 or 9 basic trading strategies still on my Powerpoint presentations.
All shares above 1,000 are .004, and seasoned traders trade in a favorable price range, when all things are considered.
Anyway, thanks for the opportunity to share this information.
All the best,
Don
Quote from TradStSOX:
Thus it can be concluded according to Don a Hi Vol comm is .0006 and as per other poster who had an HF should be .0003 per share?
thanks
No, around a half penny or less for our guys (experienced) and 6 full cents for many retail hedge funds, which most are.
(Of course some pay less, but I know many who do pay very high prices, for various reasons).
Don
Quote from phenomena:
why is it, then, don that we see the forbes list flooded with hedge fund managers, and not bright traders? care to explain that one?
Sure we see the lists, there is always that .0001% that show up. Same guys blow up millions of other people's money. Also, how many of you all can raise $billions to trade with, or even a few hundred $million? We make this career "possible" - there is not arm twisting going on here.
Everyone would love to be Soros, or SAC, but you probably have a better chance of making the NBA, LOL. We have hundreds of traders who love their jobs/income, not a big deal.
Don