 |
ronin266
Registered: Jul 2006
Posts: 241 |
07-07-12 10:52 PM
I would like to know from the guys that work for the top prop firms (Chicago, New York), what is your payment structure for a hybrid salary/profit-split deal?.
I´m in the process of opening a trading group and want to compare our ideas with the already working structures.
We´re planing a minimum salary-based deal with rights to profit split with time and experience (up to 50%), and a bonus based in both individual performance and the overall office gains.
Since the thing is developed from scratch, we think that it´s a good idea to keep the profit-split low for the first year and create a risk fund for possible future losses. But once the fund is ready, the payout would immediately rise to normal levels.
|
| |
|
Edit/Delete • Quote • Complain |
Maverick74
Registered: Mar 2002
Posts: 17314 |
07-07-12 11:15 PM
Quote from ronin266:
I would like to know from the guys that work for the top prop firms (Chicago, New York), what is your payment structure for a hybrid salary/profit-split deal?.
I´m in the process of opening a trading group and want to compare our ideas with the already working structures.
We´re planing a minimum salary-based deal with rights to profit split with time and experience (up to 50%), and a bonus based in both individual performance and the overall office gains.
Since the thing is developed from scratch, we think that it´s a good idea to keep the profit-split low for the first year and create a risk fund for possible future losses. But once the fund is ready, the payout would immediately rise to normal levels.
You really have provided no info here. The question is too broad. The structure depends completely on the type of trading you are doing, how many partners in the firm, how much capital they are putting in and the type of edge being exploited.
Weren't you looking at joining a prop firm a few months ago and asking really basic questions? Now you want to start one? My best advice is...don't.
|
| |
|
Edit/Delete • Quote • Complain |
2rosy
Registered: May 2012
Posts: 335 |
07-07-12 11:27 PM
Quote from ronin266:
We´re planing a minimum salary-based deal with rights to profit split with time and experience (up to 50%), and a bonus based in both individual performance and the overall office gains.
why would someone join this? whats the incentive? From my point of view this is only good for someone who doesn't know anything or someone who always loses money. Unless your salary is over 250k
|
| |
|
Edit/Delete • Quote • Complain |
ronin266
Registered: Jul 2006
Posts: 241 |
07-07-12 11:29 PM
Mav,
Only Equities and Futures daytrading, mostly market-making and neutral strategies. The group will not be a big one, since the strategy needs close cooperation among a controllable group of people (2 experienced traders and 5-8 fresh newbies from college ,7-10 ppl max in total).
|
| |
|
Edit/Delete • Quote • Complain |
ronin266
Registered: Jul 2006
Posts: 241 |
07-07-12 11:30 PM
Quote from 2rosy:
why would someone join this? whats the incentive? From my point of view this is only good for someone who doesn't know anything or someone who always loses money. Unless your salary is over 250k
It´s the first case.
|
| |
|
Edit/Delete • Quote • Complain |
Maverick74
Registered: Mar 2002
Posts: 17314 |
07-07-12 11:39 PM
Quote from ronin266:
Mav,
Only Equities and Futures daytrading, mostly market-making and neutral strategies. The group will not be a big one, since the strategy needs close cooperation among a controllable group of people (2 experienced traders and 5-8 fresh newbies from college ,7-10 ppl max in total).
See, this is the problem. Equities and futures are two different things. I can't even think of a firm that exists in both spaces. There is no point to making markets in equities as the cash outlay is too intensive. If you want to be an HFT firm (not the same as market making), then you are way behind. You'll need to spend millions in technology just to catch up with the worst firm in the space. Same goes for HFT in the futures space. Seriously, just can this idea and find a good firm to work for. You have absolutely no idea how competitive this space is.
|
| |
|
Edit/Delete • Quote • Complain |
| Receive
an email whenever a new post is added to this thread by subscribing
to it. |
|
|
|
|
