Prop futures firms?

JT47319 · May 29, 2003

Quote from riskreward:

All these mentioned are to be considered very competitive. I talked to Matrix Trading. They do a sliding scale of profits too. They do a draw. My friend with a 3.8 gpa and recommendation from a top fund manager couldn't even get interviews at these places. I think it's all about track record at these places. Every single one I talked to said they like candidates w/ a track record. You don't have to be making millions, just consistent profitablity w/ one contract is good. Of course, I don't work at one of these places so my info is only hear say.

May be of some interest with regards to Matrix Trading Group:

The CFTC complaints each allege that the defendants engaged in fraudulent solicitation of customers to open accounts to trade options on commodity futures contracts (commodity options) by misrepresenting, and failing to disclose, the likelihood that customers would realize large profits from trading commodity options, the risk involved in trading commodity options, and the performance record of Matrix customers based upon the Matrix trading strategy. The complaints also allege that Matrix and First Financial and their principals -- Smithers and Wedeen of Matrix and Johnson of First Financial --failed to supervise diligently the solicitation and handling of customer accounts.

The Matrix strategy purportedly compares the market positions and activity of large commercial traders to those of small traders using the Commitment of Traders Report (the "Large Traders Report"), a document published by the Commission, and a "market sentiment" report published by Bridge (the "Small Traders Report"). When the Large Traders Report shows that the large commercial traders are buying (or selling) a given commodity futures contract and the Small Traders Report shows that the smaller traders are selling (or buying) that futures contract, Matrix advises customers to follow the large commercial traders and buy (sell).

20. From July 1998 through June 2000, Matrix opened approximately 450 accounts. Approximately ninety-two percent (92%) of these accounts suffered net losses. Total net profits in Matrix's thirty-six (36) profitable accounts for this time period were approximately $100,221.22, while total net losses in Matrix's four-hundred and fourteen (414) unprofitable accounts were approximately $3,252,110.30.

Actually, this statistic is probably usual for most retail daytraders.

misctrader · May 29, 2003

Quote from vulture:

Look at it this way...If you were a CTA with a 2/20 (management/performance) structure, you would be looking at a similar payout, yet you would also have to absorb the costs of legal and accounting fees, marketing fees, investor correspondence, and quite possibly some form of litigation if things went wildly out of control...At a 2% of assets under management to generate 30k a year you would need approximately $1,500,000 under management, but you would also have to cover larger costs, so the 30k would not go as far...

The performance fee is also less as a CTA, than what they are offering you, albeit you have to hit a benchmark first to start drawing from them on the profit sharing agreement...From the way I see it, if you don't have the ultimate confidence in your trading abilities or a number of years of experience grinding it out and covering your personal overhead, your best bet is to get involved with a situation like this...Too many people make false assumptions at the beginning without any salary or any sort of stable source of income or savings...

Frankly, I am surprised they even offer this plan...I am assuming that they have somewhat strict criteria or screening?

OK. I guess given that PERSPECTIVE then it makes some sense though. But it still seems rather a huge hurdle to jump over. Bascially making $200K just to get $66K/yr. Hmm.. I guess it beats getting nothing. But if the environment is good and you have a large capital to play with then maybe it's possible...

I'm still confused now...

felichka · May 29, 2003

How do you get this statistic ? Can I get the same info on other futures firms ?

JT47319 · May 30, 2003

Quote from felichka:

How do you get this statistic ? Can I get the same info on other futures firms ?

http://www.cftc.gov/cftc/cftchome.htm

Just do a search for the commodity firm.

Here's the one on Matrix.
http://www.cftc.gov/enf/00orders/enfmatrix.htm

felichka · May 30, 2003

Thank you.

kobyco · May 30, 2003

Just to clarify, Matrix Trading Group is not the same company as Matrix Trading LLC.

MYDemaray · May 30, 2003

misctrader,

Lots of question: What kind of size do they let you trade....I guess this makes a huge difference in the equation (assuming you are profitable). I also assume that it grows with your profitability. Did you ask them their failure/success rate?

Also, did they tell you what type of trading you would be doing? S&P daytrade, trading the NOB, other spreading? Is it up to the individual trader, or do they make the judgement call? Do they offer training...and is it good, or is it the trial by fire approach?

Thanks

MYD

okwon · May 30, 2003

Quote from MYDemaray:

misctrader,

Lots of question: What kind of size do they let you trade....I guess this makes a huge difference in the equation (assuming you are profitable). I also assume that it grows with your profitability. Did you ask them their failure/success rate?

Also, did they tell you what type of trading you would be doing? S&P daytrade, trading the NOB, other spreading? Is it up to the individual trader, or do they make the judgement call? Do they offer training...and is it good, or is it the trial by fire approach?

Thanks

MYD

They scalp. It's all intraday/daytrading. They trade the bund, bobl, eurostoxx, they just got the eminis this week, and they also trade the NOB spread. It's up to you to trade what you want.

It's trial by fire. You start out on a simulator. If you get consistent, you get to trade one contract. If you're consistent it goes up. You're not going to get massive size to trade, but they have the resources to give you more than adequate size for scalping purposes if you're good enough to justify the size.

All info from a trader there so I would guess it's accurate.

misctrader · May 30, 2003

Quote from MYDemaray:

misctrader,

Lots of question: What kind of size do they let you trade....I guess this makes a huge difference in the equation (assuming you are profitable). I also assume that it grows with your profitability. Did you ask them their failure/success rate?

Also, did they tell you what type of trading you would be doing? S&P daytrade, trading the NOB, other spreading? Is it up to the individual trader, or do they make the judgement call? Do they offer training...and is it good, or is it the trial by fire approach?

Thanks

MYD

Other trader's success rates are probably NOT that important to you. The question is can YOU be successful? Trading is an individual sport in the end. It's NOT a team sport. It's going to be hard to make $200K scalping futures even with size to make $66K total take-home before taxes.

Yeah. Oh well.

misc