Starting a Hedge Fund
- Thread starter ktm
- Start date
I didn't say there wasn't a good reason, just that I haven't heard one yet.
On a serious note, there have only been a couple of dozen people approach me with the idea, and for them it was not the best approach (after considering all the factors, costs, etc.) for their intended results (making money for themselves).
The firms that have traded with us have mostly split back up into individual trading groups, and have a lot fewer headaches.
And, yes, my original comment may have sounded a bit harsh....sorry...
I have run through all the fees with my attorneys, CPAs, bankers and others. They all have experience with both small and large hedge funds in multiple states. The fees are nowhere near those stated by others on this discussion. I will not continue to stoop to thier level by countering every fallacy they pretend to have "informed" this board about.
Suffice to say that I have significant experience in the markets, a talented corps of experienced professionals in my stable and the business sense to move forward with such a venture. The last two people I would ask for advice are Gene and Don. It's obvious that they are here to hawk the prop firm way of life, promote their own businesses over any other way of trading and find fault with any method not their own. This site is degenerating into one big prop firm mosh pit. I feel like I'm at a ponzi meeting with 4 pyramid schemes competing for my business.
Until these guys cease to dominate any discussion that threatens the prop firm recruitment process, I won't be sharing any details of the progression or asking for any more advice from those here about the hedge fund. It is simply not worth sifting through all this garbage to reach the few of you who have a legitimate interest in sharing useful information.
At some point I am going to reveal my real identity to this board. I think most of you will get a good laugh when that happens in light of all the discussion that has taken place here.
Suffice to say that I have significant experience in the markets, a talented corps of experienced professionals in my stable and the business sense to move forward with such a venture. The last two people I would ask for advice are Gene and Don. It's obvious that they are here to hawk the prop firm way of life, promote their own businesses over any other way of trading and find fault with any method not their own. This site is degenerating into one big prop firm mosh pit. I feel like I'm at a ponzi meeting with 4 pyramid schemes competing for my business.
Until these guys cease to dominate any discussion that threatens the prop firm recruitment process, I won't be sharing any details of the progression or asking for any more advice from those here about the hedge fund. It is simply not worth sifting through all this garbage to reach the few of you who have a legitimate interest in sharing useful information.
At some point I am going to reveal my real identity to this board. I think most of you will get a good laugh when that happens in light of all the discussion that has taken place here.
KTM,
Honestly, if you want to start a hedge fund and you have the ability to trade and raise money , go ahead. I am not trying to discourage anyone and I'm sure you are a good trader or you wouldn't want to start a hedge fund. I just wanted to try to educate in a general way and discuss the issue.
When I started my L.L.C., just the legal framework and setup was in excess of $30,000 . If I did not get an expert legal opinion,
and the proper L.L.C. documentation, First Options would not clear my business. The point I'm trying to make is I like offering
help to others in the industry and I know alot about the stock
clearing business(as does Don Bright). You may not like what we
say, but the costs I gave are very realistic. On the low end I
believe 20k to start a hedgefund is very realistic. I would be
glad to offer you support or advice, you could always e-mail me.
There is a web site for hedge funds at www.hedgeworld.com .
They have a good rundown of fees & costs at their web site at
www.hedgeworld.com/education/index.cgi?page=starting_HF
I used to trade for a hedge fund in the 90's for a short time,
before I started LWS. I think all my posts have been honest and fair on this subject and others I have discussed. The information about hedge funds is from the Hedge Fund World site. I would advise anyone who would like to start a Hedge Fund to got to the site. The site has some very good unbiased information. KTM, best of luck in 2002.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Honestly, if you want to start a hedge fund and you have the ability to trade and raise money , go ahead. I am not trying to discourage anyone and I'm sure you are a good trader or you wouldn't want to start a hedge fund. I just wanted to try to educate in a general way and discuss the issue.
When I started my L.L.C., just the legal framework and setup was in excess of $30,000 . If I did not get an expert legal opinion,
and the proper L.L.C. documentation, First Options would not clear my business. The point I'm trying to make is I like offering
help to others in the industry and I know alot about the stock
clearing business(as does Don Bright). You may not like what we
say, but the costs I gave are very realistic. On the low end I
believe 20k to start a hedgefund is very realistic. I would be
glad to offer you support or advice, you could always e-mail me.
There is a web site for hedge funds at www.hedgeworld.com .
They have a good rundown of fees & costs at their web site at
www.hedgeworld.com/education/index.cgi?page=starting_HF
I used to trade for a hedge fund in the 90's for a short time,
before I started LWS. I think all my posts have been honest and fair on this subject and others I have discussed. The information about hedge funds is from the Hedge Fund World site. I would advise anyone who would like to start a Hedge Fund to got to the site. The site has some very good unbiased information. KTM, best of luck in 2002.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
KTM,
I must agree with you !
I had a little E-mail discussion with Don
about the difference in success between
stock and futures traders.
He claims that he has never met any consistent
futures traders in his career.And he says
he has a long background in the futures
business....
Yes, when you trade futures you have no leading
edge like you have when you trade stocks,BUT
you don't need that edge.
A pattern is a pattern, wether it is a stock
or future...
And yes, you will lose your money quicker
because of the leverage involved.
When I said that I was also interested to go
"hedgie" , he said there was no need for this.
When you want to trade really big money in
matter of seconds, then the only place for this
is the FOREX market.
You cannot take a position in INTC with
500 million dollars in a few seconds, but
you can take a position in the USD/JPY currency
in seconds without slippage with that amount.
So, when you trade BIG money, Don, you have to
go "Hedgie".
Average daily turnover in the FOREX market is
1.5 trillion dollars.
60 days of NYSE volume equals with 1 day in the
Forex Arena.
Remember the day that our friend Soros made
about 1 billion dollar in the British Pound.
I must agree with you !
I had a little E-mail discussion with Don
about the difference in success between
stock and futures traders.
He claims that he has never met any consistent
futures traders in his career.And he says
he has a long background in the futures
business....
Yes, when you trade futures you have no leading
edge like you have when you trade stocks,BUT
you don't need that edge.
A pattern is a pattern, wether it is a stock
or future...
And yes, you will lose your money quicker
because of the leverage involved.
When I said that I was also interested to go
"hedgie" , he said there was no need for this.
When you want to trade really big money in
matter of seconds, then the only place for this
is the FOREX market.
You cannot take a position in INTC with
500 million dollars in a few seconds, but
you can take a position in the USD/JPY currency
in seconds without slippage with that amount.
So, when you trade BIG money, Don, you have to
go "Hedgie".
Average daily turnover in the FOREX market is
1.5 trillion dollars.
60 days of NYSE volume equals with 1 day in the
Forex Arena.
Remember the day that our friend Soros made
about 1 billion dollar in the British Pound.
i just read many of the interesting posts on this thread. it has been noted many times the high failure rates of hf, and the high barrier of entry associated with them. a hf is a business. if you are going to start any business, significant startup costs will be required. most businesses do not succeed, this is not unique to the hf industry. many people seem to be starting hf these days according to articles i have read. at the end of the day all that matters is performance. just like any other business. if you perform the money will find you. as far as hf 10yr records are concered, not many hf out there have a history of 5 let alone 10yrs. i have read one article that said 80% of the hf started in the past 5 yrs have failed. if that number is right, it would be in line with the number of other types of businesses that fail. also, if you look at the number of funds out there i think something like 4000, most are fixed income funds. they are not actively daytrading and scalping, like prop firms do,(thats why i cant understand the comparison of prop firms and hf) im sure there are hf who do this but not many. i would like to hear opinions from those who wish to start a hf and those who have started one, and their experiences with it. thanks
quote- "I had a little E-mail discussion with Don
about the difference in success between
stock and futures traders.
He claims that he has never met any consistent
futures traders in his career."
Actually, I know many successful futures traders, all floor traders. I stand behind my statement that trading futures "off-floor" is much more difficult than trading equities.
As far as the Forex is concerned, you gotta be kidding. The "snake oil" is a bubbling big time....yeah, I want to trade against the "house" - yeah, I want to have a couple of levels of "multi-level marketing" between me and the trade.
Anyway, discussion is good. If nothing else, even if those who read these posts don't agree with us (or even don't like us), I feel good that at least they will not be able to proceed without thinking about what was said.
I actually would like to ask any Forex traders to share their success/failure with us here. Has anyone been duped by the ads? Has anyone really made money (besides the middlemen?). Let us know...
Good Trading....see you all in NYC!!
about the difference in success between
stock and futures traders.
He claims that he has never met any consistent
futures traders in his career."
Actually, I know many successful futures traders, all floor traders. I stand behind my statement that trading futures "off-floor" is much more difficult than trading equities.
As far as the Forex is concerned, you gotta be kidding. The "snake oil" is a bubbling big time....yeah, I want to trade against the "house" - yeah, I want to have a couple of levels of "multi-level marketing" between me and the trade.
Anyway, discussion is good. If nothing else, even if those who read these posts don't agree with us (or even don't like us), I feel good that at least they will not be able to proceed without thinking about what was said.
I actually would like to ask any Forex traders to share their success/failure with us here. Has anyone been duped by the ads? Has anyone really made money (besides the middlemen?). Let us know...
Good Trading....see you all in NYC!!
Don,
You DON'T have to trade against the house...
Never heard of the ECN markets in the Forex
market, like www.hotspotfx.com.
Then you don't trade against the house,
you make your own market, just like you
put your order on the Island ECN.
Ultimately the pits will die out, already
40 % of the volume in the S&P is electronical-
ly executed and this number is raising
every day....
Please, do your homework first.......
You DON'T have to trade against the house...
Never heard of the ECN markets in the Forex
market, like www.hotspotfx.com.
Then you don't trade against the house,
you make your own market, just like you
put your order on the Island ECN.
Ultimately the pits will die out, already
40 % of the volume in the S&P is electronical-
ly executed and this number is raising
every day....
Please, do your homework first.......
---Here is my homework ...from the site you mentioned..... Who in the world would trade like this??? ....(Short version: "We will trade with you using whatever prices we like and there is nothing you can do about it".....)
Prices And Margin Are Set By Hotspot FX And May Be Different From Prices Reported Elsewhere. Hotspot FX will provide prices to be used in trading and the determination of margin requirements. Although Hotspot FX expects that these prices will be reasonably related to prices available in what is known as the interbank market, prices reported by Hotspot FX may vary from prices available to banks and other participants in the interbank market. Hotspot FX may exercise considerable discretion in setting margin requirements and collecting margin funds.
Don,
Maybe you don't known that the Interbank
market is an OTC market.
It has a horizontal structure, everybody
can post a price and deal with whatever
other interbank participant, there is
no centralized location like you have
for stocks on the NYSE where all trades
must pass trough.
In that light , the statements you quote
are understandable.....
This market you cannot compare with your
childgarden, the "NYSE" :0))))
Think about it.....
Maybe you don't known that the Interbank
market is an OTC market.
It has a horizontal structure, everybody
can post a price and deal with whatever
other interbank participant, there is
no centralized location like you have
for stocks on the NYSE where all trades
must pass trough.
In that light , the statements you quote
are understandable.....
This market you cannot compare with your
childgarden, the "NYSE" :0))))
Think about it.....