Question for you experienced traders out there I just opened up an account with a international prop firm I have filled out a subcontractor paperwork talking about risks of trading is this legal? Next question if so how do I file taxes at end of the year? Thanks for responses
I understand your concerns. What's the name of the firm? It sometimes is legal and sometimes isn't, depending on where the firm is based out of and how their corporation is setup; however, there is no government oversight of foreign firms. So the only risk you run is they take your money and run. If they have been in business for a while, I wouldn't worry too much. You'll lose that $2500 in the market before any firm can get it. I would only really have that concern if it's a really large amount of $$ (6 or 7 digits) that you would want to be insured so if the firm goes under, you can get the $$ back (given most people from lehman and MFglobal didn't get their $$ back and probably won't since they have 99 years to pay you back.) For taxes, you would have to report it yourself (1099ES form is for expected earnings from foreign businesses.) You print out your account details from tradereporting or propreports or wherever and take it to your accountant with the 1099ES form. They can handle it from there.) If you want to be 100% protected (meaning no liability, even if you go negative, your liability is limited by having the extra layer of incorporation) you would have to incorporate an IBC (international business corporation) and open the prop account that name. That would cost a few grand in itself, so for your $2500, that really doesn't sound like an option.