My friend just was offered this job: He is an amazing daytrader, this hedgefund offered him a job just to daytrade; The monetary offer was after all expenses covered for firm and for head (sole) manager he will be compensated 30% of all excess commission. 70% going to the head manager. The average that must be done share wise is about 20k a day to cover the firm and managers expense; currently there is 10k a day being done. I think he is getting taken advatage of... what do you all think ? please let me know.. TY
The hedge fund offered my friend a position as a daytrader, his incetive/payout is 30% of commission after all Firm expenses and Hed Manager (sole) personal expenses are paid off. The volume is the example of the amount needed for him to start making money for incentives. I think it is a bad deal, please let me know
You probably meant PROFIT, not commission. Sounds like an aweful deal. Your friend can definitely do better. Plenty firms out there offer much better deals. Your friend may be under the impression that a hedge fund sounds nicer than a prop firm, but they are really the same animal.
What would you reccomend him to do? Look into prop firms? He said that it is commission not profit, so in reality if he doesnt hit that threshold of at least 20k shares a day he will be receiving nothing. He has to take his series 7 also prior to him trading at this firm. What do you think he should do, I am clueless on this matter for him...
If he is amazing trader, then i don't think he should be working for such small hedge fund, because he can make lot more money by marketing himself or working for much larger firms who market making different markets, or offering different services for losing traders and newbies trough a website. May be he his employer know he isn't much amazing, because Amazing trader is the one that makes offer, and his employer takes the offer.
He was taught from this Hedge fund manager, He studies technical analysis and he believes it would be tough to market himself without any prior experience but where he is currently, over time he developed a strategy for day trading and in my opinion this fund manager is screwing him. Last month performance in his own account was up 21.3 percent. I do not know if I should tell him to ask for much more or to go to another firm.
if it is commission, how much are they charging to the end client. Have him ask to see all the expenses. How much buying power are they going to give him. He should get some type of performance incentive. If it is just commission, then 30% seems fair, as long as they are not padding the cost to much. If there is an incentive fee on performance, then it should be 50% of what they are collecting or more.
I still don't understand exactly what this guy does. Sounds like a rebate trader? I'm guessing he trades equities and has to trade 20,000 shares a day? I would imagine that there is still some profit split in the deal.