Anybody ever heard of...

Discussion in 'Professional Trading' started by rjontrades, Jun 3, 2004.

  1. Discretionary Day-Trading a client account and charging a commission? I know it used to be done a bit more back in the roaring late 90's, but I never see it posted around here. Let's say someone gives you $100k because he knows you have been a pretty good trader over the years. You then trade it like crazy with say a 1 cent over-ride on the commission deal you can work out with your broker-dealer. And let's say his account returns 50-100% for the year. He would be ecstatic, no? Would it matter that I as a broker rang up the register and collected $100k or even $1M, as long as his performance is way above market returns? I know this assumes excellent performance, but in looking for alternative ways for guaranteed money (in commish), and as long as the client understands that this is a "trading" and not an investment account, can't this work?? I would be interested in hearing responses. I know churning will be the key word dicussed.
  2. gnome


    Whenever the commissions in an account are excessive, it draws the attention (and likely ire) of the regulators. Suggest you tread lightly.
  3. I guess my question is, how would regulators become aware of this? It would only be if the client reports you right? or would the broker/dealer do something? I know paperwork would be signed by the client indicating that he understands this is day-trading, it is risky, and commissions will be high etc. So if it is understood and in writing, is there much to worry about other than a pissed-off client? I don't really know the answer, so I am just looking for opinions.