Prop Futures Trading Firm

[Jack_Larkin]

Quote from Maverick74:

Quote from Lucias:

Quote from Maverick74:

Quote from Lucias:

 

[Maverick74]

Quote from Jack_Larkin:

You're 6 months late to this thread dude. Just a heads up.

 

[Jack_Larkin]

Quote from Maverick74:

You're 6 months late to this thread dude. Just a heads up.

Just enjoyed the banter..tiz all

 

[logic_man]

Quote from Maverick74:

Yes, CTA's allocate capital to outside CTA's all the time but not without a track record. You need to have your own CTA and usually a 3 year track record. I can't think of any CTA that would just hire a guy to trade for him because the CTA is tied to his name. Which means if you blow it up, your simply an AP (associated person) to the CTA. He is stuck with the track record and he CANNOT get rid of it. All CTA's must report their most recent 5 years of performance to investors. No CTA will take that risk. So what he would do it allocate capital to your existing CTA which you set up. Hope that makes sense.

Yes, that makes sense. The CTA might sub-contract out to you, but as the "general contractor", he wants to see a 3-year track record of your own CTA.

Now, can you be a CTA without actually advising anyone, just trading your own capital? If I set up a CTA structure, but only trade my own account, rather than go through the hassle of raising money, that still gives me the ability to report a 3-year track record, right? Can I set up a CTA and then use prior year's records?

I'm sure there's a web link which explains all this, but if you know the answer off-hand (or have a good link), that would be helpful.

 

[Maverick74]

Quote from logic_man:

Yes, that makes sense. The CTA might sub-contract out to you, but as the "general contractor", he wants to see a 3-year track record of your own CTA.

Now, can you be a CTA without actually advising anyone, just trading your own capital? If I set up a CTA structure, but only trade my own account, rather than go through the hassle of raising money, that still gives me the ability to report a 3-year track record, right? Can I set up a CTA and then use prior year's records?

I'm sure there's a web link which explains all this, but if you know the answer off-hand (or have a good link), that would be helpful.

Yes, you can run a CTA using only your own capital. I believe you are going to have to generate a 12 month hypothetical return when you set up your CTA. You actually have to go back and submit a fill report on every hypothetical trade and the fills have to be real traded prices. Once you have 12 months of actual trading in the CTA then you will replace the hypothetical return with the actual return. You might not have to generate the 12 month hypothetical return if you are NOT going to create a subscription and disclosure document and offer out to investors.

 

[logic_man]

Quote from Maverick74:

Yes, you can run a CTA using only your own capital. I believe you are going to have to generate a 12 month hypothetical return when you set up your CTA. You actually have to go back and submit a fill report on every hypothetical trade and the fills have to be real traded prices. Once you have 12 months of actual trading in the CTA then you will replace the hypothetical return with the actual return. You might not have to generate the 12 month hypothetical return if you are NOT going to create a subscription and disclosure document and offer out to investors.

So if I have real fills and real trades, that "hypothetical" return document should just be those fills and trades, right?

Now, do they look at any trading history prior to those 12 months or is that it? My last 12 months have been the best I've ever had, so if I get to start from there, I'll look like a trading genius, which is great.

I'm going to search online for my own info, but, again, if you know, please let me know. Thanks!

EDIT: I see the CME has a "how to be a CTA" document. I'll get the answers from there, but thanks again.

 

[hilojack]

CTA's can manage many different programs, so you can compartmentalize your results by strategy. Of course this gets included in your overall results and you can't cherry pick or ignore bad results.

All you need is a different D doc for each strategy. My CTA for example, does bring on outside traders to trade off of a master account, but it is designated as such. It trades my money and not outside investors (at this stage) but should the performance continue to do well, will spin into a CP with the CTA as the CPO.

In this instance, its really no different than a hedge fund, and hedge funds take on outside traders all the time.

Hope that helps.