Prop Trading Proposition

newwurldmn

India has its own futures exchanges (MCX & NCDEX) where various commodities are traded in Indian Rupees. MCX has a hugh volume for Metals and Energy whereas NCDEX is mainly for Indian Agro Commodities like Wheat, Corn, Cotton, various Spices etc.

I am trading on these two exchanges. But then the movements are same worldwide for a given commodity.

e.g. Lets say I trade Copper futures extensively on MCX in Indian Rupees. But to do my analysis, i always use USA Copper future listed on CME.

Another example is when I trade LEAD/ZINC, I always use LEAD/ZINC listed on LME for my analysis.

The price movements are ditto same.

I hope this answers your question!
 
It does.

So why do you need a futures account in the US?

I can open an account in India as an NRI and have been contemplating it if it gives me access to certain European futures that Americans can't get.
 
Maverick74

As Jim Rogers correctly says 'India is a land of Contradictions'

India is a booming market but the fact is an individual can not send money out to trade futures on overseas exchanges as futures is a leveraged/margin product. But then at the same time one is allowed to work as a prop trader (if there is no out remittance is involved)

There are very few (max 3-4) prop firms in India. These are true prop firms which never takes any deposit from traders. There is one in my city also but its purely into the Stocks traded on NYSE, NASDAQ. How they have set up their shop here and/or how they are managing the legal issues, that i don't know. All these firms have their parent company sitting in USA.

RBI is a central bank of India and it also acts as regulatory body for anything involving foreign exchange. When I need to send money to overseas broker, my bank needs to convert Indian Rupees into USD. But then there are guidelines specified by RBI. One of the guidelines prohibits Indian Residents to convert Indian Rupees into Foreign Currency if the purpose is to trade on leverage (Futures, Forex, SSF, CFD, Stocks on Margin etc.) Only thing that is allowed is stocks purchased in cash accounts.

I hope its clear now.
 
newwurldmn

I need futures account in the USA because there are certain short comings like

(1) Indian Commodity Exchanges do not run for 24hrs a day. They run from 10:00AM to 11:30PM IST only. So i always feel bit unsecured when the markets are closed, as I am not a day trader.
(2) Also there are many holidays in India. So If there is any significant event in western countries, I need to take a hit in terms of gap up or gap down the next day.
(3) At the end of day, Its the movement of futures(Metals/Energy) listed in USD in USA which moves all other corresponding world futures. It is never a vice versa
(4) At the end of day, I am doing all my analysis on futures from USA. So its easier to trade the same. For same futures in INR i need to consider USDINR movements as well, which is an additional task (especially when there is wide movement in USDINR)
(5) Many times the margin requirements are high. In case of agro commodities margin requirements go as high as 20% to 30% (in rare cases even upto 50%)
(6) Also USA markets as wide range of futures products which are not available in India.
(7) Also even though India is know for IT, its own local IT systems are way behind when compared with US Brokers/prop firms.

Also As an NRI, what your are contemplating is not possible. RBI guidelines are very complicated.
 
Quote from world:

Hello

I am an experienced and very successful commodities trader and investor. I have my own trading strategies developed by me.

What I am looking for:
A prop trading outfit which will
(1) Allow me to trade in futures market using firms capital on profit sharing basis without asking for any deposit from me
(2) Allow me using my own trading strategies and not force me to day trade
(3) Allow me to hold my positions anywhere from 1 day to 1 month
(4) Allow me to use my own risk management for each trade
(5) Give me an initial account value that should enable me to take trades with total notional value of around USD100,000
(6) Keep an Overall Risk tolerance of at least USD3000
(for my trading strategies as a overall loss limit). In other words if I lose USD3000, I should be kicked out.


Why I am looking for above mentioned arrangement and not open my own account with USD5000 with US Broker: As per my countries regulations , I can not remit funds out to overseas broker/company to trade on leverage or margin. I can only open cash accounts with overseas brokers and can remit funds for cash trading in stocks only. But I can work with overseas trading firm as a trader without remitting anything outwords. I do have USA Bank accounts. My earnings can be deposited directly to my US Bank accounts or can also be sent to my Indian Bank accounts.

Also I believe, prop trading route gives a quicker access to the more capital as success follows.

I would even welcome any suggestions.
More...

yea....no
 
You must log in or register to reply here.
Back
Top