Managing Funds for a Living
- Thread starter paysense
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This is jibe taken from C2. My services fall under such per the Department of Corporations (California). My peronal line is only for generalized instruction that all subscribers receive.
"Do I need to register with the CFTC or the SEC in order to sell my trading advice? Do I need some kind of license to start a trading system?"
If you are an American citizen, the short answer is: No, you do not need to register with any government agency, or pass any kind of test, or have a license in order to publish trading advice.
However, you must be aware of certain restrictions. The most important restriction is this. You cannot provide individualized advice to clients. That is, you cannot offer different advice to different clients based on their individual financial situations.
Here's an example.
Allowed: "Attention all subscribers to my trading system: Buy IBM because I believe it is going up!"
Not allowed: "Dear John Doe: based on our conversation earlier today, in which you told me you were nearing retirement, I think you should buy IBM, because it will appreciate in value!"
The other important restriction is that you cannot manage clients' trading accounts on their behalf. You can't have access to their money, or issue trading instructions to their brokers. Otherwise you cross the line from publishing, which is allowed, to asset-management, which requires registration.
You must simply restrict your activity to publishing non-personalized advice which your clients can choose to act upon or not. (Note that using Collective2 to disseminate your trading advice via a Web site and email is considered publishing.) Remember that our right to publish and say what we like is protected by the First Amendment, a right that our citizens fight for, to this day. No small matter, that.
If you are not an American citizen, then I have no idea what kind of constraints your government places upon you. Please check with a local attorney.
...unquote
"Do I need to register with the CFTC or the SEC in order to sell my trading advice? Do I need some kind of license to start a trading system?"
If you are an American citizen, the short answer is: No, you do not need to register with any government agency, or pass any kind of test, or have a license in order to publish trading advice.
However, you must be aware of certain restrictions. The most important restriction is this. You cannot provide individualized advice to clients. That is, you cannot offer different advice to different clients based on their individual financial situations.
Here's an example.
Allowed: "Attention all subscribers to my trading system: Buy IBM because I believe it is going up!"
Not allowed: "Dear John Doe: based on our conversation earlier today, in which you told me you were nearing retirement, I think you should buy IBM, because it will appreciate in value!"
The other important restriction is that you cannot manage clients' trading accounts on their behalf. You can't have access to their money, or issue trading instructions to their brokers. Otherwise you cross the line from publishing, which is allowed, to asset-management, which requires registration.
You must simply restrict your activity to publishing non-personalized advice which your clients can choose to act upon or not. (Note that using Collective2 to disseminate your trading advice via a Web site and email is considered publishing.) Remember that our right to publish and say what we like is protected by the First Amendment, a right that our citizens fight for, to this day. No small matter, that.
If you are not an American citizen, then I have no idea what kind of constraints your government places upon you. Please check with a local attorney.
...unquote
Now that (newsletter) may've been a bit boring, so here are some pictures
(after the texual confrontation)
(Today's) Volume remained below Friday's light trading levels.
Volume was running about one-fifth lighter on the main exchanges.
Index charts don't look to good. DJIA/SPX has broke support. Naz has head-and-shoulders pattern forming. Volume on declines is high, on advances is lighter. Now getting lower highs and lower lows.
SOTM are still being bought. A bit slimmer Monday.
Do you believe in miracles?
I don't do a whole lot of exhaustive charting (T.A.). Although used as a secondary indicator (HandS pattern) of market action. Aside from the other indexes that broke support, let's give the Nasdaq the benefit of the doubt - namely it's quickly emerging head-and-shoulders pattern.
Few patterns give a clearer sign of a stock's peak than a head-and-shoulders top. Forged at the end of a long run-up, it often signals the end of the glory for a market leader.
A topping indx begins the pattern by hitting a high, marking the left shoulder. It then pulls back, often bouncing off a support level like the 50-day moving average.
Instead of forming a smooth, rounded base, the index typically shoots straight back up to a new high. That's the head. It then rides a sharp second leg down. Volume in a classic head and shoulders often increases as the pattern moves from left to right, a bearish sign amid continued selling. The price action is usually wide and loose.
The index makes one last futile attempt at gains, wedging out the right shoulder. In a textbook head and shoulders pattern, that near-term high falls short of the left shoulder. The bottom soon drops out, and it plunges. If you don't sell by then, you could lose all your gains.
The Nasdaq has made new highs in disturbingly low volume. This could be the last final rally attempt this time around...then a plunge.
(after the texual confrontation)(Today's) Volume remained below Friday's light trading levels.
Volume was running about one-fifth lighter on the main exchanges.
Index charts don't look to good. DJIA/SPX has broke support. Naz has head-and-shoulders pattern forming. Volume on declines is high, on advances is lighter. Now getting lower highs and lower lows.
SOTM are still being bought. A bit slimmer Monday.
Do you believe in miracles?
I don't do a whole lot of exhaustive charting (T.A.). Although used as a secondary indicator (HandS pattern) of market action. Aside from the other indexes that broke support, let's give the Nasdaq the benefit of the doubt - namely it's quickly emerging head-and-shoulders pattern.
Few patterns give a clearer sign of a stock's peak than a head-and-shoulders top. Forged at the end of a long run-up, it often signals the end of the glory for a market leader.
A topping indx begins the pattern by hitting a high, marking the left shoulder. It then pulls back, often bouncing off a support level like the 50-day moving average.
Instead of forming a smooth, rounded base, the index typically shoots straight back up to a new high. That's the head. It then rides a sharp second leg down. Volume in a classic head and shoulders often increases as the pattern moves from left to right, a bearish sign amid continued selling. The price action is usually wide and loose.
The index makes one last futile attempt at gains, wedging out the right shoulder. In a textbook head and shoulders pattern, that near-term high falls short of the left shoulder. The bottom soon drops out, and it plunges. If you don't sell by then, you could lose all your gains.
The Nasdaq has made new highs in disturbingly low volume. This could be the last final rally attempt this time around...then a plunge.
Meanwhile...how are those short index option sells doing...may erode fast = money in the bank!
Remember these late last week trades?
DJX at 133.45
STO (455) DJYGG Jul 137's @1.1
or a $50,000 (theoretical) scoop into the acount.
SPX at 1500
STO (90) SXMGI Jul 1545's @ 11
or a $100,000 (theoretical) scoop into the account.
I realize it is too late to start a C2 account with these trades, but it's been 5 years since I've deployed this strategy so this may be just a running start. Any help with actual margin requirements/breaches would shed some light.
In other words could 150k have been brought in a 1M account at these prices? I'm thinking ok. How much am I currently margined with this virtual trade?
If market further tanks perhaps the (way) OTM QQQ calls can be sold short.
...and uh, I remember now - my stop-loss target was about 50% - not 35% as stated previously.
Yes...it's all coming back to me, lol. Awful quiet on the ET front, - I'm thinking more than a few head-scratching events have transpired.
03:30 pm EST - OK, now go sell the QQQ (Jul 48's) naked calls - could be practically free money. We can monitor the market erosion and lock in hefty gains when deemed of worth.
If the market somehow bounces, it has to reach new highs for us get burnt - or it'd have to bounce rather sharply and hit our stop = 50% increase in call price.
ask prices on the above short plays are today (marginally higher) at:
DJX at 134.5
DJX Jul 137's @ 1.20
SPX at 1510
SPX Jul 1545's @ 13
QQQ at 47
STO (1925) Jul 48's @ 0.52
or a $100,000 (theoretical) scoop into the account.
These were posting from another thread of mine. We will monitor this relatively easy 25% gain in a large account. PayS
Remember these late last week trades?
DJX at 133.45
STO (455) DJYGG Jul 137's @1.1
or a $50,000 (theoretical) scoop into the acount.
SPX at 1500
STO (90) SXMGI Jul 1545's @ 11
or a $100,000 (theoretical) scoop into the account.
I realize it is too late to start a C2 account with these trades, but it's been 5 years since I've deployed this strategy so this may be just a running start. Any help with actual margin requirements/breaches would shed some light.
In other words could 150k have been brought in a 1M account at these prices? I'm thinking ok. How much am I currently margined with this virtual trade?
If market further tanks perhaps the (way) OTM QQQ calls can be sold short.
...and uh, I remember now - my stop-loss target was about 50% - not 35% as stated previously.
Yes...it's all coming back to me, lol. Awful quiet on the ET front, - I'm thinking more than a few head-scratching events have transpired.
03:30 pm EST - OK, now go sell the QQQ (Jul 48's) naked calls - could be practically free money. We can monitor the market erosion and lock in hefty gains when deemed of worth.
If the market somehow bounces, it has to reach new highs for us get burnt - or it'd have to bounce rather sharply and hit our stop = 50% increase in call price.
ask prices on the above short plays are today (marginally higher) at:
DJX at 134.5
DJX Jul 137's @ 1.20
SPX at 1510
SPX Jul 1545's @ 13
QQQ at 47
STO (1925) Jul 48's @ 0.52
or a $100,000 (theoretical) scoop into the account.
These were posting from another thread of mine. We will monitor this relatively easy 25% gain in a large account. PayS
Your numbers don't make sense. I told you that trade has an initial margin requirement of >$3,000,000. I don't understand how that equals an easy 25% return.
Also you are sitting on about a $5K loss on those right now. I wouldn't call that a realtively easy gain. I told myself the same thing when I left to Costa Rica on my honeymoon a couple years ago. I had some relatively cheap gamma bear calls that were quite a ways OTM. Five days into my honeymoon, I found my way to a little internet cafe and realized that DJX and QQQQ had rallied something like 6-7%. By the time I got home expiration was a real nail-biter.
I hear ya...gotta give these some time. Also with naked option sells can use stop order. Right? Mine is when price meets 50% increase in value. I realize prices can gap - hence the 'index' option sells.
Also with the 33% margin rule...r u sure (i know u r) that much capital is needed? Seems some of the ideas you gave me can be put to good use?!?
GP
...better your QQQQ's and DJX's than your wifey!
Also with the 33% margin rule...r u sure (i know u r) that much capital is needed? Seems some of the ideas you gave me can be put to good use?!?
GP
...better your QQQQ's and DJX's than your wifey!
Quote from paysense:
I hear ya...gotta give these some time. Also with naked option sells can use stop order. Right? Mine is when price meets 50% increase in value. I realize prices can gap - hence the 'index' option sells.
Also with the 33% margin rule...r u sure (i know u r) that much capital is needed? Seems some of the ideas you gave me can be put to good use?!?
GP
...better your QQQQ's and DJX's than your wifey!
Ya, in a retail account that DJX & SPX call sell would require about 3.4MM initial requirement. Much lower if you were on haircut margin, but as I understand it you don't want to trade on margin anyway.
I have a suggestion, but first I need to make a disclaimer. I'm not advocating selling calls in this environment. In a euphoric market that is just asking for problems. But...
If you made that same trade:
-455 DJX JUL 137 calls
-90 SPX JUL 1545 calls
And then added
+455 DJX 146 calls @ 0.05
+90 SPX JUL 1625 calls @ 0.20
Your initial margin requirement drops from $3.4MM down to about $1MM. You'll have double commissions and give up a very small portion of the profits. I wouldn't recommend this trade, but it accomplishes the same purpose as your naked short calls and is much less buying power intensive.
Or, if you're confident in your market top prediction you could make the trade with the better profile.
-455 DJX 137 calls @ 1.10
+455 DJX 138 calls @ 0.85
Margin requirement is only $34K
Max Return = $11,375
Return on Margin = 33%
Same short strike. Better hedge protection. All around better trade if you are in the habit of cutting losses at a certain point. Also if your directional forecast is correct you'll make a lot more money. Just a couple things to think about.
Essentially you need the FOTM longs to cut margin requirements, but you aren't gaining much protection by going with the FOTM longs vs. just going with the longs that are one or two strikes further OTM than your shorts. But I'll get some debate for that opinion. Everyone knows I'm one of the few here that has never been a fan of selling FOTM premium.
Not trying to put you on the spot...but yeah I like it. Make it work the way it's meant.
Now I gotta figure/crunch the numbers, but yeah.
Hedges, I am manic-enuf about stops, perhaps can now bring in significant % return on 1M cap.
As far as making a lot more...these are usu closed at a good profit - not maximum, except in perfect world/market.
Let the market be your guide:
shows some of the tell-tale signs...
First we had another rally attempt fail in light volume. Too bad we only have 10 minutes left in the (yesterday's) session when things began to tank.
...for those that have to-date vaulted their accounts, take advantage of ET thread "Naked Index Calls $$$$" on Career Trader for some ideas what to do now.
So what do u think's in store for tomorrow? Blasted (dead) cat!
...and we (today's market) were doing so good there with the midday rally
ps when markets do go down...they over-exag just like on the way up. On margin? Holding losers? Doubling down? Using futures/options?..........
Not to mention that this mornings market gapped lower at the open.GA
Right now indexess are characteristilcally squirrely at the low support with 20 minutes left?????? They are acting PSYCHOTIC
PaySense
shows some of the tell-tale signs...
First we had another rally attempt fail in light volume. Too bad we only have 10 minutes left in the (yesterday's) session when things began to tank.
...for those that have to-date vaulted their accounts, take advantage of ET thread "Naked Index Calls $$$$" on Career Trader for some ideas what to do now.
So what do u think's in store for tomorrow? Blasted (dead) cat!
...and we (today's market) were doing so good there with the midday rally
ps when markets do go down...they over-exag just like on the way up. On margin? Holding losers? Doubling down? Using futures/options?..........
Not to mention that this mornings market gapped lower at the open.GA
Right now indexess are characteristilcally squirrely at the low support with 20 minutes left?????? They are acting PSYCHOTIC
PaySense
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