Starting a Hedge Fund - choosing systems

[dabao91]

Just go open an advisory account with IB


Can IB automatically calculate adviser fee MONTHLY (not just quarterly)?

 

[Spectre2007]

leverage in forex is a deathknell. Your goal in forex is to stick your hand out into the streams of money flowing in any direction. And scooping intermittent sums.

If the hand you stick out is larger, the force of the stream will break your arm. ie leverage.

In the end all you care for is bidirectional volatility. To fill your hand. If its unidirectional, the erosive forces of the stream will eat away at your hand.

spot forex is much easier to setup since there is no regulatory body that oversees spot forex trading. But if your fund is not setup in a legitimate fashion, then its veil will be pierced and wont stand up as a seperate entity next to the manager in terms of tax and accounting issues.

 

[atticus]

Quote from Don Bright:

Thank you, I appreceiate the update!!

Regarding "prop always being better" - I was careful to allow caveats, nothing is "always" - people are different, many don't know the details of how various prop firms work, some decide to go with fund raising, some try trading on their own, this is a free market place.

Don

"Prop is better"

Don, does Bright Trading offer K-1 partners access to FI and FX swaps, vanilla and exotic options, structured products in general? Futures and FOs? I assumed that all you can trade is listed equities and options on occasion.

 

[atticus]

Quote from atticus:

"Prop is better"

Don, does Bright Trading offer K-1 partners access to FI and FX swaps, vanilla and exotic options, structured products in general? Futures and FOs? I assumed that all you can trade is listed equities and options on occasion.

Don, would you respond to my last on this thread, when you have a free-moment?

 

[segv]

Quote from Don Bright:

I have asked this of dozens of potentially good traders. "Why give away 80% of your profits, when trading with us will give you $millions to trade with, and you keep 100% of your profits, and don't have a bunch of friends and relatives and other investors breathing down your neck?"

Because managing a hedge fund offers the benefits of leverage without additional risk. Let us make some assumptions about a start-up hedge fund and examine the results. If the average hedge fund start-up has $5,000,000 under management excluding the $100,000 of the manager's capital:

5,000,000 * 0.35 * 0.20 = 350,000
5,000,000 * 0.25 * 0.20 = 250,000
5,000,000 * 0.15 * 0.20 = 150,000
5,000,000 * 0.05 * 0.20 = 50,000

With a mere 5% return the hedge fund manager achieved a 50% ROI on their own capital without increasing risk. The appeal of starting a hedge fund versus joining a proprietary trading firm is obvious, especially when one factors compounded earnings on management fees, and the opportunity for growing the capital under management.

-segv