What is the risk of signing a contract if they are teaching you to trade and not having you put up cash? If you are a winner then you will get a share of your profits and the firm gets paid back for the risk it took to train you. Your risk is time. If you are a loser, then you have nothing to lose. A firm that charges you money up front for training is betting against you. A firm that takes principle risk in exchange for training you and a portion of profits is betting on their training and you. I signed just such a contract, lived with it happily even when I could have gotten a better deal after I signed it if I broke it. At the end of the contract I left to become a customer. It was one of my best trades ever. In exchange for a percentage of my earnings the firm took all my risk and taught me a skill too. Just trade larger to overcome the houses share of the profits. I think in an earlier post by the Bright guy, he said they can come after your assets when you sign an LLC agreement and become a member. I missed that part in my business law class. Aren't you limited in a Limited Liability Company? In the school example, aren't college athletes in that boat. They sacrifice a year of eligibility to get out of a scholarship. The school makes money from them and in exchange, they get a college degree and exposure to the leaders of their future profession (scouts) if they are good enough.
"Limited Liability Company" = limited risk.... if I remember correctly that limited risk is the value of the assets in the company.
Just my thoughts... and I'm just repeating what Don Bright has already emphasized... If you are joining the firm to gain an education then fine. If you want to take home $ at the end of the day then you had better have a clear understanding of all of the company policies. This can be done verbally or written... however, written is preferred for obvious reasons. Assume nothing= risk little. Assume something = risk a lot. ASS U ME Isn't this business all about limiting risk?
actually Don was not referring to an LLC when he was talking about losing one's house. he was referring to working for a company without an agreement. newatthis, the question that prompted this thread was about a company that doesn't require a contract, i am sure you signed one with ETG.
Limited Liability means that the traders (members) are only at risk for what they have put up into the business individually.
My $0.01194556 ($0.02 less ECN fees): If you are to be an employee of any company, anywhere, you are entitled to get a note, letter, MoU, whatever that offers you a specific job, usually with specific compensation details, and reference to some sort of "company policy" document. There doesn't have to be too much detail here, since a lot of the terms are governed by state and federal law, regardless of what is written and agreed to. If you are investing in (becoming a member of) an LLC, you would certainly need docs that specify your rights and obligations, in great detail. There is far less regulation in this area than employee/employer relationships, and therefore you should expect that most everything is spelled out in detail. If a company doesn't automatically provide/demand these docs, you have cause to be suspicious. Disclaimer: I'm not an attorney, though I play one at parties. This is simply from my experience at being and hiring employees, and doing business deals.
This is maybe a little bit off base, but⦠Is it possible that there is something like âimplied contractâ. As soon as you start showing up for work on a regular basis â you are agreeing to that contract (which is displayed to all the employees in the dark cupboard in the basement). The implied contract can be full of house rules like: âThose who enter this building will lose their soul at the end of their first trading sessionâ. I am just remembering some sales people with their little notes: âIf you donât wants us to come around make a phone call â if you do nothing â your a$$ is mineâ
Don, thanks for being a "little" bit more specific. However, I believe that you are technically wrong. Here's why: If the trader were to join an LLC and then never trade/make additional funds then his liability is limited to his initial investment. However, what you are over-looking is the earnings made from trading that would be held by the LLC. My point really depends on the structure of the LLC and their way of doing business. Just don't forget that assets of the LLC are not protected should something such as a lawsuit occur. I hope that makes it a little more clear why I phrased my post the way that I did. At any rate, we both stand together in our answer to the question concerning the personal liability (assets) of a trader in an LLC...they are only liable for the assets(investments) currently held by the LLC.
Sure, perhaps it should read "limited to all monies in sub-account".... I think we both just want people to take the time to see what they're getting into, regardless of what business it may be.