From Prop firm to prop trading for a Hedgefund

Discussion in 'Prop Firms' started by Cre8UrF8, May 18, 2005.

  1. I was at E*Trade Professional so I am now looking for a new place to trade. Before I get spammed with offers I have friends at every prop firm out there and already have been offered the best deals from most firms, SO DONT'T BOTHER SENDING ME OFFERS!!

    A friend just introduced me to a hedgefund, and they offered me a deal to trade prop thru a hedgefund, they will give me more than 20:1 leverage intraday start witch can increase later and lesser leverage on my overnights, and I can trade equities, options, and futures, and I can trade remotely or in an office. I believe he said that my money deposit would be put in a customer account so it wil be SIPC insured, I have to double check that. I have my licenses, but because it is hedgefund traders don't need to be licensed.

    I did this a several years ago thru Blackwood Trading, if anyone remembers them. I didn't have a problem with the setup or the ways things worked there.

    I am wonder why more traders aren't taking this route, especially retail traders who aren't licensed, they can get so much more leverage and probably cheaper rates and I believe the payout is 95%. So you give of 5% of you winnings to get 20+ leverage rather than 4:1 intraday, and more than retail's 2:1 leverage overnight.

    I have a couple of friends who have been trading with the head guy for a year are two and they say they trust him and never have problems. I checked him out and he has a very solid background. They say because of the less regulation and smaller amount of traders than large prop firms there are less problems and things are taken care of alot faster. Because of the amount of business they do with their clearing firm they have alot of pull and can get things fixed and done they want it very quickly.

    Is anyone else currently trading in this kind of situation, and why not?
  2. There are some but rarely post.
  3. ones i spoke too dont get 95% nor 20:1 leverage, so this looks like a good deal, the question is it for real, looks too good
  4. im doing just what you said..with the same deal..95% and 20-1 intra...

    my question is what is your overnight leverage?
  5. For overnight leverage, I was told they want to keep it low until you establish a trading record with them so they don't feel you are a big risk. I believe I was told 5:1 to start, can get up to 10:1
  6. Dustin


    Anyone can get .005 (or better) for min $5k down with 20:1 (or more) leverage with 100% payout these days. So how good are the comms that you are talking about to make it worthwhile at a hedgefund?
  7. The guy is just hyping it up.. because this way he can say that he works for a hedge fund as opposed to a prop shop. Makes him sound more legit to his circle of friends.

    Sounds and looks a lot better on paper.... realy the same shit.
  8. First of all I don't care if it sounds more legit to my friends, I don't have an ego, you can't in trading. And I have gone back and forth from trading for hedgefunds to trading at prop shops. I don't care what I tell people I do.

    Second I have been trading fo a while now so all my friends learned a long time ago what I do and a bunch of them do the same thing and are traders.

    The deal is the same as at a prop shop. But If you come in and are consistently profitable they are willing to work with you; drasticly increase your leverage and BP, no more deposit you trade only the fund's money, or like I had at Blackwood a draw and 70% payout with no money down, or hopefully a salary on top of payout. That's the thing they are more flexible, no prop shop would ever do this for me.

    However you are right about how it looks on paper, others perceive working at a hedgefund as being something, as compared to trading at aprop shop.

    I am most likely gonna go with the hedgefund over the offers from prop shops but I don't understand why there aren't more of these opportunities, what is the benefit of being at a prop shop over this? Same deal as at a prop shop, no licenses needed more oppurtunities can open up for good traders, and you can actually put it on a resume. What am I missing?
  9. heynow


    I also trade with Etrade and am looking for another firm. I would consider a deal like the one Cre8UrF8 mentioned if anyone wants to PM me. Also if anyone trades thru Merrill I would be interested trading over there as well.
  10. yeayo


    Do you live in a gutter? Why do you assume he's 'hyping it up'? Have you ever trading at a prop shop? Have you ever read the 'funniest things ever at a prop shop'? Are you aware of all the prop shop blowups and shutdowns in the past few years? Are you aware of all the sub llc scams out there? Maybe this guy just wants to deal with professional people and trade in a professional envirnment.
    #10     May 18, 2005