Trading for a family member? Am I legally allowed to trade their accounts?

The IB FFA is also very handy for simultaneously trading your own multiple accounts. e.g. cash, IRA, Roth. As long as you're not shorting stock or taking naked short call positions you can pretty much do anything you want in all 3 at the same time.
 
TheNotSoGreatGatsby said:
I've been trading for a bout 2 years. I traded for an equity prop firm for a short 6 months but had a horrible experience. I sucked ass and switched to futures and I've been trading my own account ever since. Being 21 and still living with my Father, you can say I trade for a living as it's my own source of income, but with such a small account, I'm not making much after expenses to grow my account. I'm just trading 1 contracts /ES.

A family member wants to open an account and have me trade for him. My Grandpa to be exact. But he wants to pay me a salary, and not a profit split. He wanted me to come up with a contract and he'll let me know if he agrees with the terms. Am I allowed to trade his account like this? Is there an example contract of such trader for hire services?

Anybody who has experience with this, can you give me some pointers? We are located in the US if that matters, and I trade futures via NinjaTrader Brokerage (Dorman Trading). He invests through IB. I don't know if broker matters or not.
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never trade for the member of the family, never give them investing advice... stay away from them

u can screw general public (and that's what trading opm is all about), but do not touch your own family...

if your granddad loves you so much he can just give you money (gift) for trading,.. if you will be successful you take care of him, if not (and that is a much higher probability) - well.. it was a gift anyway...
 
Dad/Grandad are just giving you the opportunity to get it out of your system before you 'get a real job',so you can't say 'if only I was properly capitalised' if only this,if only that.
 
Years ago last time I looked into this there was some geographical restrictions too, the investors had to reside in your state or something like it. Maybe it was just for non-relatives, I don't remember...
 
The best thing you can do is make a documents that says:

  1. this money is at risk and can be lost totally
  2. when loses reach 30% of het invested capital, trading will be halted and situation will be discussed, resulting in stopping completely or defining the new level of losses that will be accepted.
Simple and very clear.
 
I would add a third statement to those ones:

3) I am in no way shape or form a professional or qualified financial professional, and have no certifications or experience of any kind investing for other people. I have no idea why anybody would trust me to invest their money for them, but if they are crazy enough to allow me to manage money for them, ALL risk is entirely theirs. I accept no responsibility what so ever for what is very likely going to happen to this money, which is to say, it will be lost.


If he signs that, then good luck in your trading my friend :)
 
VTS said:
I would add a third statement to those ones:

3) I am in no way shape or form a professional or qualified financial professional, and have no certifications or experience of any kind investing for other people. I have no idea why anybody would trust me to invest their money for them, but if they are crazy enough to allow me to manage money for them, ALL risk is entirely theirs. I accept no responsibility what so ever for what is very likely going to happen to this money, which is to say, it will be lost.


If he signs that, then good luck in your trading my friend :)
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See a better answer/solution marked below!

Chewy said:
Trading ES falls under CFTC not the SEC. The CFTC in general you have to pass exams and register as CTA and do Disclosure Documents that are approved by CFTC to trade other peoples money but you can phone them and ask them.

The SEC has historically allowed some exceptions but not the CFTC. You might trade the ETF under SEC but not the ES. The ES is clearly a commodity. the data feed is a Commodity data feed. and the CFTC definitly has contol over trading on ES.

I think it is 500 shares of the ETF is the same as 1 ES contract. I trade under commodities not stocks. I think the SPY is the etf that is traded. or maybe it is the SPX. but you should trade what is the highest volume most liquid and I am not sure what is used in place of the ES. If you want to know the correct legal answer then phone the CFTC and ask them. it is an 800 number and cost you nothing. get the correct answer and report back here.

my super strong advice is that you should not trade OPM other peoples money. it will destroy you in a flash.
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