Good, Great, Excellent Return?

Discussion in 'Prop Firms' started by Holden42, Dec 11, 2007.

  1. Holden42


    Hello all, I'm new to this Forum and would love to ask a question...

    If a 40 year old person started with $30k on Jan 1st of this year and started trading options and stocks with that money during breaks and lunch during his full-time job, what would be considered a good, great, and excellent return through November 30th of this year in terms of potential to take his trading interest to the next level?

    He made about 440 trades in this time period.

    For example, is there a %, say X% that might be considered a good enough return where he should consider he might actually have a talent and should consider doing it full-time? Is there a % where he should contact some salary prop firms because they may be interested in his 11 month track record at that % successful return? Is there a % where he should contact hedge funds or other institutions because there would probably be a strong interest?

    Or, is starting with $30k and 11 months of history not enough capital and time, no matter how good of a return the person made over 11 months?

    Thanks in advance.
  2. mnx


    There is a saying... Don't confuse brains with a bull market. ;)

    But that said, if you are new to trading and are up this year then I'd say you're doing well (no matter the %age)..

    - mnx

  3. Those who trade for a living don't even consider ROI, they need to make a good living. For example, our traders may use our money to trade with (with that same $30K in their account), thus having over a $million to "use" - you can engage in strategies that can make you a good living. You get paid for your expertise, discipline, etc. vs. ROI just the money. The money is only a tool.

    After a certain level is reached, $5-$10 million or so, then sure, you start looking for a good 20-30% return or so with your trading/investing.

    (Just a different way of approaching the whole trading thing).

    All the best,

  4. Dustin


    If you made >50k over the course of the year I would say it's safe to try prop trading. Don't expect a salary though.
  5. Sounds like you've done a good job at being patient and not blowing up during 11 months and 440 trades. It'd be good to look at some statistics regarding position size/value at risk and the volatility of the returns. You can probably farm that out to some number-monkey to do - but it might be a good exercise to do it yourself.. Anyone know of any software that makes calculations like that easy?

    If your approach is do-able part-time, I'd resist the urge to scale up quickly looking for huge returns. Plus, the value of a steady job is huge - can't beat that regular paycheck. The psychology would probably change if you flipped a switch to go pro. Why not wait until you've grown a sizable and diversified nest egg - like, say $300k rather than $30k?

    It sounds like you've been methodical and patient, so you can always scale slowly and perhaps use a firm like VTrader or Simplex to gradually gain leverage.
  6. Holden42


    Wow, thanks for the comments everyone, they're awesome! How do VTrader or Simplex differ from Bright Trading?

    Don, in your post you mention a good living. Can you say in general terms what a good living is considered to be for traders at your firm? I have no idea...I understand if you can't say, but just thought I'd ask... I'm trying to understand the possible alternative paths that could be taken in moving forward...

    I live in Chicago.

  7. VTrader and Simplex are for options trading. From what I gather, second hand, they allow option trading using a risk-based haircut margin. This allows pros to structure positions while tying up less capital. I had options on the brain and focused on that in your post.
  8. Pretty rare for a long time trader to not want/need to make a good middle 6 figures.

    We do offer options, just to clarify one of the posts. However, we are not really an options firm. If you want to focus on options strategies, go with Maverick at Vtrader.

    Since our traders can use a $million or more of our capital, it allows them to engage in many equities strategies and techniques.

    If you want to speak with my Chicago manager (in the Goldman Sachs wing of the CBOE building), send me a PM with contact info.

    Wow, what a morning....25 spoo point move half hour before the bell, FED and ECB "printing money" and yet, an oil spill in the North Sea. Should be an interesting day.

  9. traderade



    Can you explain what risk-based haircut margin means? I googled it but didnt understand what I found.