"Don" (i.e. the industry), should be looking at converting their shops to hedge/prop trading funds using bank capital in a new secondary tier to bypass the pathetic 3% restriction the volker rule has imposed. to assume GS and the followers won't find ways to dump more than the 3% outside their leftover prop shops in the four years they have left to rape the system for as much as they can, would be to assumed a fool. so yes, "someone" should do this... be interesting to see who comes out of the gate first with the best model.
This is probably one of the best posts I have seen here in some time! Give a newbie with 10-20k 100:1, and he's a gonner sooner than later. Maverick needs to get paid for that post!
I think a guy like Maverick should step up and form his own group, back up what he knows with real world commitment, and in the process, get filthy stinking rich. It's one thing to say it, another completely to prove it.
what im learning is position sizing is important these days. I have friends who are used to trading 50 lots in the bonds who now trade 10 lots with the intention to add. I personally got smoked in 09 trying to jump in with the spurs jingling and jangling trading equities. Maverick thanks for the insight.
Interesting -- I've been wondering how the HFT's are doing, now that markets seem to be becoming mercilessly efficient in the short term. IBKR is, by my reckoning, one of the largest (as well as one of the original) HFT firms -- the IB brokerage was seemingly tacked on to their existing HFT model, somehow magically making them a non-HFT in the minds of the press. That said, going forward they might indeed become more of a broker than a market maker given how much market making margins are shrinking. http://www.zacks.com/stock/news/37452/Interactive+Brokers+Misses+Again I wonder how the others such as Automated Trading Desk, GETCO, Wolverine, Optiver, Tradeworx, etc. are doing in this environment.
I'm not arguing with you, I'm just kinda curious as to why you believe the commission business is dead. In both models really the trader is doing the same thing... trading. So I'm not really sure what the difference is by charging him commissions or by charging him a % of profits like a hedge fund. I don't understand how one model can work and one model not work, when really they are the same thing, at the end of the day the firm gets a %... either in the form of commissions or % of profits
You are not making sense. Assuming profits is very weak and a recipe for total disaster for anyone. How can you have a % of profits if there are NO PROFITS? You can always make commission vig--trader wins or loses.
...which would imply the commisson business is still more viable. I'm asking why maverick thinks the commissions biz is done and the hedge fund model is in when they are really the same thing.