The top 3 guys who make over 1 million a year at my firm...

[tradingjournals]

Here is something I never understood about the great people and traders in this forum. Let us assume there are 100 great folks here who know how to trade well, and make money.

Why do they not get together and put in say 1K to 2K, build an organization, make money, and use it as a base to bring in more money? With 100K total they can trade say 0.5M, at cheaper commissions, cheaper rates, etc. The whole could then be higher than the sum of the parts, and at less risk.

Then if all goes well, the entity might then consider the public company route. Isn't that how Warren did it? My understanding is that the old man understood that issuing stock is the bigger wealth multiplier.

 

[Maverick74]

Quote from Rorschach_test:

LOLOLOLOL

this is what i`m saying.why do i need 6x or 600x times of your NONEXISTENT money!and i`ll have to put my $50K with it...i wonder how many idiots left who do that!

Well, I think there is some confusion here. Don's firm for the most part preaches a certain style of trading where the leverage does support that style. They have guys that run 100's of stock pairs that as a group exhibit pretty low volatility. I think the confusion comes from guys who think they can come in and buy shares of TSLA with 10x of overnight leverage and sit on it. Don unfortunately strokes this confusion by no properly explaining this to people. I have gotten on him about that in the past. Also buying shares of TSLA and selling the SPY against it offers no hedge. Case in point TSLA has dropped 40% in the last few weeks while the SPY is higher.

 

[s0mmi]

Quote from Don Bright:

Just to show actual numbers, nowhere near what's being quoted here...(I have not read the whole thread, just saw these "interest" numbers).

Say you put up $50K, we offer you 6 times that with no "haircut" or risk fee (you will pa Goldman a very small amount).

That's $300K total.

Then, if you need or want more capital to use, you can get between 6-10 times your equity for 2% per year, so essentially you're using 10 times your equity for less than 1% per year to us, and about 2% to GS (it varies of course).

Just some facts, just trying to help.

Happy Holidays everyone!!

Don

>> I didn't mention that the deposit at my firm gives you capital-control but the focus is more on your day stop.

**With $50k your firm allows $300k of control and 2% of that is only $6,000 as a stop... in contrast...

With a $50k deposit at my firm you get $25,000 DAY stop..

>> If you get smashed and lose it then you go back on half-size to make it back.

>> As an example for reference, if you left $40k @ my shops account... you get 180 U.S. Tnote limit as max as well as 180 Aussie 10yrs.
-That's $9,000/tick in the Aussie 10yrs.
-That's $3,000/tick in the U.S. T-notes on Max size

 

[Rorschach_test]

Quote from Maverick74:

Well, I think there is some confusion here. Don's firm for the most part preaches a certain style of trading where the leverage does support that style. They have guys that run 100's of stock pairs that as a group exhibit pretty low volatility. I think the confusion comes from guys who think they can come in and buy shares of TSLA with 10x of overnight leverage and sit on it. Don unfortunately strokes this confusion by no properly explaining this to people. I have gotten on him about that in the past. Also buying shares of TSLA and selling the SPY against it offers no hedge. Case in point TSLA has dropped 40% in the last few weeks while the SPY is higher.

the name of the game is risk,isn`t it?no prop would ever go down with .01c of their own money.why don`t they split the risk with traders?never happens!so? i have fun with my own tiny $30K account.

p.s.topstep and s0mmi`s firm put their own money.the future is for that kind of models.props time has gone senile.

 

[Maverick74]

Quote from s0mmi:

>> I didn't mention that the deposit at my firm gives you capital-control but the focus is more on your day stop.

**With $50k your firm allows $300k of control and 2% of that is only $6,000 as a stop... in contrast...

With a $50k deposit at my firm you get $25,000 DAY stop..

>> If you get smashed and lose it then you go back on half-size to make it back.

>> As an example for reference, if you left $40k @ my shops account... you get 180 U.S. Tnote limit as max as well as 180 Aussie 10yrs.
-That's $9,000/tick in the Aussie 10yrs.
-That's $3,000/tick in the U.S. T-notes on Max size

Actually technically your daystop is 50k in this example with Don. He'll let you go through it. I'm sure you'll get some interesting phone calls in the process though. LOL.

 

[s0mmi]

Quote from Rorschach_test:

the name of the game is risk,isn`t it?no prop would ever go down with .01c of their own money.why don`t they split the risk with traders?never happens!so? i have fun with my own tiny $30K account.

p.s.topstep and s0mmi`s firm put their own money.the future is for that kind of models.props time has gone senile.

>> There seems to be a mis-understanding. You don't need to deposit ANYTHING at my prop firm for a very long time.

I'm pretty sure they wilfully give you a $10k day stop without any deposit basically. You just need to show consistency over time.

>> So there is no problem with depositing at all. I am only referencing deposits because that's the end game. Why? Because shops aren't doing a 50/50 or even 60/40 split deals with you when you make that money. It creeps up to 75/25 or 85/15 splits.

>> So they get much less money on their behalf, so they MUST ask you to deposit money otherwise they would let you risk $100,000 but if you MAKE $100,000 they only get like $20,000 out of it.

>> You can do a lot at some firms without any deposit at all. Consistently profitable traders are not easy to come by, no firm is going to just give you bad deals left right and centre. Find a good shop and sell your confidence & profitable record and you'll have no trouble.

The best way is to get training in-house through them and just accumulate experience over time, so they know what type of trader you are.

Like I, and many people have mentioned in this thread, it's all about how hard you are willing to work. That's it.

 

[tradingjournals]

Quote from Maverick74:

Well, I think there is some confusion here. Don's firm for the most part preaches a certain style of trading where the leverage does support that style. They have guys that run 100's of stock pairs that as a group exhibit pretty low volatility. I think the confusion comes from guys who think they can come in and buy shares of TSLA with 10x of overnight leverage and sit on it. Don unfortunately strokes this confusion by no properly explaining this to people. I have gotten on him about that in the past. Also buying shares of TSLA and selling the SPY against it offers no hedge. Case in point TSLA has dropped 40% in the last few weeks while the SPY is higher.

Read about something called the Market Line. The stocks you talk about should be on that market line. So a hedge with say SPY is essentially something MINUS the same thing with exception of free rate, which would be short. So if a prop firm charges a spread, the free rate is hedged via this charge, and what is left is the interest spread. Passage of time makes money. It is the same old way of making money: charging interest + fees (in this case commissions, software, etc).

 

[Swan Noir]

Just what everone longs for ... 99 partners he doesn't know!!!

Quote from tradingjournals:

Here is something I never understood about the great people and traders in this forum. Let us assume there are 100 great folks here who know how to trade well, and make money.

Why do they not get together and put in say 1K to 2K, build an organization, make money, and use it as a base to bring in more money? With 100K total they can trade say 0.5M, at cheaper commissions, cheaper rates, etc. The whole could then be higher than the sum of the parts, and at less risk.

Then if all goes well, the entity might then consider the public company route. Isn't that how Warren did it? My understanding is that the old money understood that issuing stock is the bigger wealth multiplier.

 

[tradingjournals]

Quote from Swan Noir:

Just what everone longs for ... 99 partners he doesn't know!!!

I agree that no pain, no gain.

The law, the documents, the votes, the money one puts in, etc, is what would keep everyone equal and in line. People would not fight too much for 1K each, but one never knows. You seem to have experience on the ground dealing with partners, so I value your judgement.

 

[Rorschach_test]

Quote from s0mmi:

>> There seems to be a mis-understanding. .

you bet! your probably a contrarian...or lefty.lol