Lynx Capital Partners

Originally posted by daniel_m


the important thing is that the traders in "B" who lose money, lose only their own money, not the firm's.

beyond that, the firm "B" only needs to be able to cover its expenses to stay in business....given the lucrative returns commission charges yield, and that "B" is unlikely to have gone into business in the first place unless it had some traders lined up, it is unlikely that "B" wouldn't be able to cover its expenses..
More...


If a trader in company "B" loses more money than what's in his account, the firm takes the hit. Depending on how established the sub-LLC is, the firm itself may absorb some or all of those excess losses. Some fly-by-night sub-LLC's pass along ALL excess losses to the other members. This would definitely be cause for concern if you were a trader at one of these firms.
 
The point being, do your homework.

Know your risks.

Know the risk parameters of the firm.

Strategies of the traders of the firm. Scalpers, Pair Traders, Arb traders?

Overnight Exposure? (Higher Risk)

Leverage given to traders? Liberal (Higher Risk) or Conservative (Lower Risk)?

Number of traders? Remote? Office Based?

Read and understand what you sign.

There are several threads discussing the risk of any LLC. My favorite is TheTraderProfit's post earlier in this thread:

Originally posted by thetraderprofit
Don is always frowning upon Sub LLC's for the same reason he and his brother used to bad-mouth LLC's in general. Now that they ARE an LLC, I don't hear him bad-mouthing LLC's any more. Sure, some have gone bust, but so have firms of all structures.

The simple fact is that whatever the structure, unless you are trading retail with SIPC insurance, your $ is at risk. Period. End of story.

You can get financials but this doesn't prevent someone from blowing up the firm, no matter how much capital they have.

The sub-LLC helps protect Andover.

My advice is the same advice I received from an experienced floor trader when I was worried about my $ before I joined Bright in 1998:

Worry about making money, not about the solvency of the firm. It's much more likely you'll lose all your money than the firm will blow up and lose your $ because of someone's trading.
More...


As far as Lynx Capital Partners, LLC is concerned, if you are concerned about your 5k to 25k deposit, then trade retail (with the same tools) and have SIPC insurance.

Hope I can help answer any of your questions that concern Lynx.

JWK
 
Worry about making money, not about the solvency of the firm. It's much more likely you'll lose all your money than the firm will blow up and lose your $ because of someone's trading.
More...

This concludes this topic !!!
 
Originally posted by JWKirkland
The point being, do your homework.
Know your risks.
Know the risk parameters of the firm.
JWK
More...

Those three points are probably the best summary of the entire thread! And I know some traders are asking, where would I begin to "do my homework"? My recommendation would be to look at whether the subLLC has a backer that's financially stable. Lynx Capital in this case is the subLLC, and Andover is backing them....all you have to know is whether Andover is financially sound or not? And an easy way to do that is by seeing if they are self-clearing (in this case Andover is). It's not easy to establish your own clearing firm, you must be able to meet a high volume of trades per day and minimum amount of asset/revenue to even qualify...most other smaller firms (or don't do as well) may clear through SLK or Southwest, etc...Therefore, you can determine as a first step the risk parameteres of the firm (rule 3) simply by asking the trading firm regarding the self-clearing matter.
 
One point to consider is the trader 's real exposure vs the financial stability of the firm.

As an example one of the very secure and well capitalized firms asks for a 100k deposit, if the trader wants to retain access to certain trading vehicles.
Another firm, a subLLC, not as popular, asks for a 5k deposit.

So, in one case, the trader might loose 20 times more.
Unless he deems the first firm more than 20 times safer, the less risky option is the second firm.
Hence, the best option statistically may not necessarily be the more financially stable firm.(although risk is not the only criteria in joining a firm)

Second point is the buffer capital in a firm vs the number of traders. Some firms expanded quickly and without increasing enough their capital through traders deposits. They actually end up with very little buffer capital per trader.
This is one of the reasons why some firms do not allow themselves to have an unlimited number of remotes and use quotas.


OHLC


Not intended to bash any firm, just comments.
 
Originally posted by Carboxyl


Those three points are probably the best summary of the entire thread! And I know some traders are asking, where would I begin to "do my homework"? My recommendation would be to look at whether the subLLC has a backer that's financially stable. Lynx Capital in this case is the subLLC, and Andover is backing them....all you have to know is whether Andover is financially sound or not? And an easy way to do that is by seeing if they are self-clearing (in this case Andover is). It's not easy to establish your own clearing firm, you must be able to meet a high volume of trades per day and minimum amount of asset/revenue to even qualify...most other smaller firms (or don't do as well) may clear through SLK or Southwest, etc...Therefore, you can determine as a first step the risk parameteres of the firm (rule 3) simply by asking the trading firm regarding the self-clearing matter.
More...
Heh,

One of the reasons I have not gone to a prof firm is the SIPC that retail gives me - as my buying power is almost adequate.

I think it is really dangerous to give advice on these issues unless you are a lawyer and understand the ramifications of a sub-llc and the way that it has been set up. I can easily imagine that this has been setup so that the parent is not responsible for the catastrophe's of the sub.

It's one thing to give advice on a stock where no one knows what they are talking about, another in a field where there is no gray area...If I were going to go to one of these things, I would probably get a lawyer to read over the docs for me. I may even write the SEC to understand my exposure better.

nitro
 
Granted the bar to self clear is higher than a firm that rents a 500 sq suite ,becomes a correspondent firm to SLK, Penson, etc. But if you call the regulators - SIPC, Depostiary trust clearing corp(50% sure of name) and the bar is not as high as you think. 500k cash a CFO, a compliance officer and several licenses. 500K is no small potatoes ( I wish I have 500K) BUT 500k in the context of having 100-400 traders using 10:1 leverage is nothing. Do your homework!
 
Originally posted by JWKirkland
As far as Lynx Capital Partners, LLC is concerned, if you are concerned about your 5k to 25k deposit, then trade retail (with the same tools) and have SIPC insurance.

Hope I can help answer any of your questions that concern Lynx.

JWK
More...

geezzzzzzzzzzz, i said virtually the same thing awhile back and had my head ripped off.
 
You must log in or register to reply here.
Back
Top