Starting my own hedge fund

Discussion in 'Prop Firms' started by Scalperten, Jul 24, 2015.

  1. rmorse

    rmorse Sponsor

    One situation where you need to register with both the SEC and NFA is a CPO.
     
    #21     Jul 26, 2015
  2. Sorry, my question is off the subject but you would be the one to know. Are brokers trading futures for their own accounts and MM's bound by SPAN the same as retail traders? I would think they are, but maybe at a lower rate.

    Thank you.
     
    Last edited: Jul 26, 2015
    #22     Jul 26, 2015
  3. rmorse

    rmorse Sponsor

    It is my understanding that margin on futures is determined by the exchange. They have one requirement from the customer and 8% of that is also required by the FCM. I don't think that requirement changes if the futures are traded by a customer, member of the exchange or an FCM. The exchanges are responsible for counter party risk and have a certain requirement that must be met. BTW, this margin is only calculated for overnight positions.
     
    #23     Jul 26, 2015
  4. With so many prohibited activities I'm surprised that the small investor could survive...
     
    #24     Jul 26, 2015
  5. Yes, a series 65 license (investment advisor representative) is required to run OPM in most states.

    For futures, I think only the series 3 is required, however I'm not sure.
     
    #25     Jul 26, 2015
  6. fan27

    fan27

    Hello Robert,

    What makes a strategy/track record "marketable"?

    thanks!
    fan27
     
    #26     Jul 26, 2015
  7. rmorse

    rmorse Sponsor

    Consistently profitable with appropriate draw downs. I say "appropriate", because if your net is 30%/year or 5%/year, the acceptable draw downs are different. Then your return will have a target market. Some will be looking for low risk, low leverage and 6%. Others will want 20%+ and be willing to take on more risk.

    Investors clearly have a comfort level. They need to understand what you are doing and feel like they are missing out if they don't participate. They also invest in the manager and a business. They want to feel comfortable with the manager and know there is an infrastructure behind what he is offering. One man shops are a harder sell.
     
    #27     Jul 27, 2015
  8. fan27

    fan27

    Makes sense. thanks!
     
    #28     Jul 27, 2015
  9. Daal

    Daal

    What is the typical cost per year of this setup?
     
    #29     Jul 30, 2015
  10. rmorse

    rmorse Sponsor

    Not sure. Depends on who you choose to form the fund and who you choose for each provider. You have to shop around but keep in mind that for larger allocations, you can save money by using a auditor from India.
     
    #30     Jul 30, 2015