How would you raise $70k in capital if you have $40k and a viable trading strategy?

S2007S · Oct 18, 2019

BinaryAlgorithm said:
Trying to reach the $110k mark for IB's portfolio margin. Strategy is fully hedged (no directional risk) and would yield at least 50% return on capital in a year at 10x leverage, but around 100% at my target of 18x leverage which IB's risk calculator seems to allow with ample margin to spare. I already run this strategy in my account at about 2x and the IB margin is under 20%, but Reg T is the limiting factor and I'd like to scale it up more. Regular unsecured loans don't really go this high, so where would I borrow from at say 20% to fund the strategy? Or are there companies that do profit sharing that might put up the capital?
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Use the super duper strategy with your $40k, use less margin, might take a little more time and turn it into $70k ...you'll reach your magical $110k

S2007S · Oct 18, 2019

I dont have Bloomberg access but saw this come up tonight

I'm guessing they had a Robinhood account too
The stories always seem to originate from reddit!!

Markets
A Guy on Reddit Turns $766 Into $107,758 on Two Options Trades
By
Brandon Kochkodin
October 17, 2019, 6:00 AM EDT

Scataphagos · Oct 18, 2019

raVar said:
You're going to have to grind an auditable track record, for a minimum of 3 years to get noticed.
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Ditto. Until you have done that, you might as well keep quiet.

manonfire · Oct 18, 2019

raVar said:
Amen and amen.

Yeah, it's not expensive at all. Main work is studying for, and passing the Series 3 (I have).

It's mainly a math test, and learning the way that they want you to work the math for bona fide hedging, for options, etc, and getting that done in the time limit. Learning how they want it done, is most of the work. But it's only $125.00 to sit for the test (at least when I sat for it).

Then $750.00 to register with the NFA, and then another $1500 or so, paying the NFA for CTA fees, getting fingerprinted, and sending that off, fees for registration for the first time, etc.

Maybe $80 to $90 a month in E&O Insurance. Past that? That's it. That, and just grinding like a sunuvagun and $750 a year in NFA Membership fees. All told? Yeah, maybe about $3,000 to rock and roll?

That, and TRULY, in almost a quantitative way, knowing where the strategy can go wrong, and when it does, and what you do about it. Because High Net Worth, QEP's ... WILL ... be asking those sorts of questions. As well as questions about where you'll run into Scaleability problems.

Remember, Barlcay Hedge is filled with about 20,000 Dead and Liquidated CTA's that couldn't make it.

But that's just on the CTA route. The LAST low-entry pro route available to traders.

On the other part? Absolutely agreed. You can count on two things with humans.

People notice.

And people talk.

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Except you do not need a series three to be a CTA.

raVar · Oct 18, 2019

manonfire said:
Except you do not need a series three to be a CTA.
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Uh, you most certainly do ...

https://www.nfa.futures.org/registration-membership/how-to-register/proficiency-requirements.html

Volker Knapp · Oct 19, 2019

All this good advices and where is BinaryAlgorithm? No more interest in our money?

fan27 · Oct 19, 2019

Volker Knapp said:
All this good advices and where is BinaryAlgorithm? No more interest in our money?
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Perhaps a very wise ET member with the ability to spot a good investment when he sees it ponied up the $70k for the OP.

qlai · Oct 19, 2019

fan27 said:
Perhaps a very wise ET member with the ability to spot a good investment when he sees it ponied up the $70k for the OP.
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Theoretically speaking of course, how would that work in practice? Would someone offer the guy to trade his sub-account like @traderjo?

ETJ · Oct 19, 2019

@qlai - you might want to search the archives as this is a fairly frequent topic - I discussed finding a backer, but there were other fairly detailed discussions.

qlai · Oct 19, 2019

I may have missed it, but I don't remember anyone explaining/suggesting how to get funding without explaining what the strategy is. I don't believe people who are looking for funding (relatively small amounts) can enforce any NDAs. So my question is - let's say you have a strategy but you don't want to disclose it beyond general statistics. Let's assume, just like in OP's case there's even some acceptable track record. What choices are available? In other words, I just want someone to give me access to a funded account to be traded at my discretion within required risk limits for pre-approved instruments(like a blackbox). Is this realistic?