Where can I find a Hedge Fund/prop office business plan?
- Thread starter ronin266
- Start date
Some at least. But I don´t see this form of operating as "riskless". I mean, what if a trader always is winning, but his wins are only a % of the risk that you taken in the contrary position. You would be losing more of "your" money than they earning in the markets. That could end with a bankruptcy
You are forgetting the desk fee and the "commissions" which are zero since it's really just side bets with you
The chances of actually hiring a profitable trader, not to mention profitable enough to actually win more than everyone else combined is losing, are slim, especially when there are all sorts of crazy rules like you HAVE to trade certain size and you HAVE to close all positions at the end of the day.
I think some places even make you trade a certain amount per day. So even if there are no setups, you still have to trade.
Prop business plan-
Take time machine back to 1997.
Recruit any person who has hands to be a trader.
Charge OBSCENE commissions.
Have the traders recruit their friends into the business.
Charge them OBSCENE commissions.
Print money during the NASDAQ bubble and burst.
Watch traders drop out like flies.
Close prop shop and retire with tens of millions in commission profits.
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Good luck. Tell us how it works out.
Take time machine back to 1997.
Recruit any person who has hands to be a trader.
Charge OBSCENE commissions.
Have the traders recruit their friends into the business.
Charge them OBSCENE commissions.
Print money during the NASDAQ bubble and burst.
Watch traders drop out like flies.
Close prop shop and retire with tens of millions in commission profits.
---------------------
Good luck. Tell us how it works out.
If your really looking to start a traditional prop firm where you hire traders with no deposit, provide training and support and allocate capital toward strategies that are working, so you , your investors and the traders can all thrive (For equities and option trading):
-Raise over $5M. With over $5M, you can open a Customer Portfolio Margin account and receive excess leverage during the day and CPM at night.
-Come up this a fair compensation plan for your traders and include benefits like health insurance and small draws against a percentage of profits.
-Start every trader with about a 25% allocation of what you will eventually offer until they show profitability.
-Guide them, don't let them gamble
- Run it like a business.
-Hire a GOOD risk manager
-Have an max draw down for every trader.
-Have fun, build a relationship with your traders and they will never leave.
You don't need to be a BD to do this. You need lots of capital, good people and lots of rules.
-Raise over $5M. With over $5M, you can open a Customer Portfolio Margin account and receive excess leverage during the day and CPM at night.
-Come up this a fair compensation plan for your traders and include benefits like health insurance and small draws against a percentage of profits.
-Start every trader with about a 25% allocation of what you will eventually offer until they show profitability.
-Guide them, don't let them gamble
- Run it like a business.
-Hire a GOOD risk manager
-Have an max draw down for every trader.
-Have fun, build a relationship with your traders and they will never leave.
You don't need to be a BD to do this. You need lots of capital, good people and lots of rules.
Thanks for the info, that is the plan, but I´m seeking how to put that in paper, cause the investors wanna find more risk capital from other people and will be showing the bp in their circles.
All traders will have a small salary (everyone will be backed) during the training period and until they become profitable, all health/social stuff included and a psychologist lol. There would be a problem finding a good risk manager, I don´t where to search for one, I would need a professional guy or someone with experience in trading?...
