Is 10% of profit enough

Discussion in 'Professional Trading' started by lylec305, Sep 15, 2017.

  1. Robert Morse

    Robert Morse Sponsor

    For $100K, 10% is very low unless the strategy has very little risk and very low return. If you are going to do this, get in writing that you can keep copies of your monthly statements and daily returns from their account to market yourself.

    And, the asset class and strategy does matter. Your past returns matter too. I know someone that runs a fixed income levered strategy that charges 65 BPS on assets, no incentive fee. Last week I spoke to someone that is up 60% for the investor this year AFTER 1/40. 3 years ago someone asked me to help them raise money for an options/futures MM. They needed $10mm and wanted 60% to them and 40% to the investors AFTER all expenses.
    #11     Sep 15, 2017
  2. ajacobson


    So let's say you are really great trader that can consistently deliver out sized returns on a risk adjusted basis. Your friends give you 1 Million dollars and you return 30%. Their accounts earn $270,000 and you earn $30,000.
    If you can genuinely deliver risk adjusted returns that outperform and you can document the performance their isn't a hedge fund, family office endowment or pension fund in the country that wouldn't hire you. Typically a $200,000 to $300,000 base against (typically) 10% of your book's profits. A little less at public pension plans

    You are - IMHO - wasting your time with that kind of deal.

    Scale will be everything and unless your friends can pony up 8 figures your time would be better spent where you can get scale and infrastructure.
    #12     Sep 15, 2017
    johnnyrock likes this.
  3. lylec305


    I trade my own account and all i do is trade their account with exactly the same trades. The extra fees i'm earning from their accounts is just token of appreciation.
    #13     Sep 15, 2017
  4. lylec305


    there's a disclosure in place
    #14     Sep 15, 2017
  5. ajacobson


    Still wasting your time.
    #15     Sep 15, 2017
  6. lylec305


    Let's say I'm spending about 1 hr per day trading their account. What would not be wasting my time? I waste more time on ET...
    #16     Sep 16, 2017
    Pekelo likes this.
  7. Looks like you answered your own question. You asked for opinion (or rather a confirmation) on whether it is enough, most gave no as an answer, from a professional manager point of view. You're happy with a "token of appreciation", so it is obviously enough for you. Almost everyone here will ask for more - as it is below the industry average, but if you're happy then go for it.
    #17     Sep 16, 2017
    lylec305 and Robert Morse like this.
  8. schweiz


    if you are who you pretend to be, I don't understand why you would still trade other people's money.

    your profile says:"Trader by day and secret crime fighter by night. Previous life International Systems Acrhitect IT consultant. Developed Income Trading Methodology and the QuintFecta Critical Path to create 5 income streams from 1 stock. All forward tested for many years."

    you behave as you are one of the numerous "experts" on ET, so you should be very successful and just trade your own money (millions or billions). if you in reality are not that expert, it would make sense to make a 10% commission.
    #18     Sep 16, 2017
  9. lylec305


    You're stating the obvious, I do trade my own account and if she is hot enough i'd trade her account also (10% is her idea) wouldn't you? That's what I do, develop system. Developed a trading system for personal use and mentored many for free, some compensate me for my time but i never ask. Does that make me a professional or expert so be it, I've been called worst.
    I've been trading her account for a few months now, she can see the return is much more than any investment she has ever experienced. Why not take it to the next level when opportunity presents it's self and your doubting me for what reason? Does it make you feel better or something, so many peanuts...
    Last edited: Sep 16, 2017
    #19     Sep 16, 2017
  10. d08


    For long term investing with little involvement, it's plenty. For active daytrading where you have to fight for liquidity, make it 40-50%. I'm sure others disagree.
    #20     Sep 16, 2017