The OP is getting a bit ahead of himself in terms of a firm's appeal for his existing body of work, quite possibly the better route would be some academic credentials and an approach into a firm as an analyst with some applied, practical knowledge in the art. I use the term "appeal" in the context of his OP, and his desire to be paid to trade a firm's capital exclusively I presume.
What are firms that hire traders?
- Thread starter marketmerlin
- Start date
Consistent profitability.
Agreed, but I was looking for more detail on it.
An index out of the money put writer can look like a
genius for a long time before he blows up.
So what criteria do you use to judge that consistent
profitability is genuine.
A full business cycle (could be 8 years).
Two full business cycles?
An index out of the money put writer can look like a
genius for a long time before he blows up.
So what criteria do you use to judge that consistent
profitability is genuine.
A full business cycle (could be 8 years).
Two full business cycles?
No, no, no. A prop firm would never hire a premium seller. You need lots of data points. I don't have an exact number, maybe 500 to 2000 trades in that range somewhere. And preferably you show alpha when others are not. In other words, you make just as much money with the VIX at 15 as you do at 30 if you trade stocks. I use to tell guys, I should be able to look at your p&l and not know what the market did that day.
I'll agree that an up or down market shouldn't matter, but, higher volatility almost always equates to better PnL (for me at least)...
I'd venture a guess that most successful short term equity traders (intraday) do better in higher vola environments. It is due to the nature of the opportunities available.
Of course but if all you are is a long call option on the VIX then as a partner of a prop firm, all I have to do is buy VIX calls to replicate what you would do if I hired you. What's the point to hiring you then? Of course some environments are better then others. But if you make 100k with the VIX at 30 and lose 100k when the VIX is at 15, I see no reason to hire you. If you make 100k with the VIX at 30 and make 40k with the VIX at 15 then at least you are showing some alpha. Most guys can't do that. They are one trick ponies and their p&l can easily be replicated without having to hire them.
Well, the other thing is that no prop firm is going to let you tie up that much capital in the form of performance bond margin just to eak out those kinds of returns - they would much rather allocate that capital to HF strategies where they can spread it out amongst several traders and lever the piss out of it.
Sharpe ratio on a decent sized book.
Whether that indicates actual trading talent (if such a thing exists) is another question.
Whether that indicates actual trading talent (if such a thing exists) is another question.
I don't know any prop firms that look at sharpe ratios. Maybe Bone will chime in. Sharpe ratios are used to analyze hedge funds, not prop traders. Shit man, every fader in the world has a high sharpe ratio until he blows out.