Comp - you say that now - it's very easy to say 'he doesn't care about this $$$' but when it's down 50% (see above post from another guy that did this) the 'situation' changes. VERY few people can laugh off pissing $ away. Very few. And with friends and family, be carefull. As the above post stated, this can easily affect your relationship. Think about it... Even if he does laugh it off, how are you going to feel when you go out and he says 'well, you can buy drinks tonight since you lost my money' or 'hey guys, if you need to lose $ and quickly, give it to this guy!' etc.
Spot-on brownsfan019, spot-on. And believe me, (if it does happen), you're going to go from being apologetic to wishing he would just STFU pretty soon! ... and assuming it comes back from the inevitable drawdown (I don't know of ANY trader who can trade without one), whatever he is paying you just won't be worth it. But hey, maybe none of these things will happen . Later, JJ P.S. I mean, look at Neiderhoffer (not necesarily the correct spelling). When I took a black swan in 9/11 (severly overleveraged on puts written for prem income I believe) he totally decimated his whole social circle! - and got into book writing.
I am currently managing $5000 for 3 friends. I charge them no expenses and guarantee their initial investment. I let them know that after I double their money twice, we can talk about charging a fee, they had no problem with that arrangement.
If you charge, you are in fact an investment advisor are you not and may be subject to SEC or state regs. Where I live, you only need one client to be subjected to the regs. DS
i manage some family money as well... 1. start out for free...prove yourself, focus on small drawdowns to build trust and keep friendship. 2. I then started to charge 20% of profits after achieving xx% growth. make it a good deal for them. the experience for you is worth millions.
If you're a profitable trader with a proven track record, charge 1%/year management fee and 20% of the profits, just like any other pro. If not, don't do it at all. Why do you want to lose your friend's money for him, regardless of how little it is? If you want to play, paper-trade.
On a long list of dumb things to do, this makes the top five. First, it is a bad idea to trade OPM unless you are highly experienced, which you aren't. Not to get personal, but the fact that you are trading options on a limited account isn't indicative of a lot of experience. Second, it is generally very risky to mix financial entanglements of any kind with a friend, especially if it involves markets over which you have little control. And third, if you are going to put yourself through the anxiety of trading OPM (and you will have anxiety), then do it for the possibility of making serious money.
Such naivety. If you want to keep personal friends, don't enter into any money transactions with them. For the naive this can be the best way to turn a friend into a foe. But don't let experience or wisdom get in your way .. !
Yeah, no kidding. Even with advice. About 6 months ago, my dad wanted me to help him out, so I did. I made him some money, but after being in the green, he refused to take my advice on exiting positions. It's a long story but I'll just say that we don't talk about the economy or markets at all anymore. I guess it has more to do with what type of people you deal with, rather than if they are friends or family.