Moving from a Prof Prop Trader to Using Other People's Money

[DaddyofTwo]

Just wanted to say thank you for your advice.

 

[bln]

Why not become a proprietary trader with access to capital rather than the hassle of CTA or hedge?

These have it draw-backs too. They ("the firm") may have opinion on your trading style, risk parameters, they may try to influence your trading, etc.

Investors in CTA/HF will mostly leave you alone to do your own thing inside the given risk mandate. They care only about monthly, quarterly and annual returns.

 

[Max E.]

Goldman will look at you if your a quant with an mba, but bottom line at the end of the day, you ill make just as much at a prop firm as you will at goldman if you arent profitable...... atleast the prop firm will give you a few more days to bleed your account dry.

Hi

I am based in the UK - and have been trading for my own account consistently profitably for the last six years. I average about 40% net per annum, 60% gross (I trade fairly stable spread combinations so entry and exit commission costs are high - as are platform as I use a co-located autospreader).

I make a basic living from my trading - but it's not "the dream" - and was thinking about starting to scale up. My platform costs would not go up much, and I could probably lower my commission fees with volume. This would also allow me to trade a bit more actively and aggressively, so I think that it is reasonable to expect to get my percent return up a bit more.

Moreover, I have good academic qualifications (MBA and another quant masters) and experience of working with top name financial organisations at the start of my career. At that time, I was working in trading environments - analysis, regulatory, testing, documentation, etc - but not as a trader.

However, I have not worked for somebody else for the last twelve years. To be frank, I am not a "company man" and I don't want to work full time trading. I have other business interests, as well as a couple of young kids whom I want to see. Also, I am no longer based in London which also makes things a bit more difficult.

I don't want to go around trying to raise capital from the public myself. And in the UK there are a huge amount of regulatory hurdles to jump which would make it prohibitively difficult even if I did.

I was wondering if I approached a hedge fund, or similar, would they let me actively trade a smallish tranche from my office base on my track record and give me a percentage of the profit as an incentive. If so, what is the norm? What other alternatives might there be?

Have any forum members made a similar transition? I am open to any proposals if you wish to PM me.

 

[bone]

Goldman will look at you if your a quant with an mba, but bottom line at the end of the day, you ill make just as much at a prop firm as you will at goldman if you arent profitable...... atleast the prop firm will give you a few more days to bleed your account dry.

He's not "prop" in that sense of the word - my understanding is that he trades his own account. Goldman isn't a consideration for him unless somehow top tier IB firms are now telecommunicating.