Thanks for your reply. I don't want to get into a pissing contest about Worldco, I only mention them as an example as I do know a little something about them. I think that if their 400 traders DID sit there and play video games, they would be better off in the long-run, certainly most would be a lot richer. Anyway, just an attempt at humor, take my comment in the same tongue and cheek manner that i take your comment about 90% winning percentages :0)
The top traders are paying less than .0045 a share- meaning 45 cents for every 100 shares not incluning sec fees. They need to be able to puchase married-puts instantly, instant trade execution, a few screens, some a bloomberg. These are the guys that make 500+, alot with extremely small drawbacks. They are given up to a few million, sometime more, with less than 50k in capital and the firm is worried bec. these guys rarely use it and rarely have days where they lose more the 3-6k. The pay a few hundred in commissions a year.
Thanks for once again showing your TRUE COLORS and refusing to be honest ( or should I say "transparent" ) about your reason behind setting-up a few day traders in your shop. The fact of the matter is that you would not have any problems meeting your monthly expenses if you had the appropriate management fee attached to your ENTIRE asset base. My guess is that you have some seed capital, like many start-up hedge funds do, and there is nothing wrong with that. But don't insult the intelligence of this board, and the traders that are on it by misrepresenting your intent. Why not just take a look at the track records of the day-traders that you are interested in hiring, and then allow them to trade the fund's capital, with strict guidelines and parameters? Unless of course you do not wish to take on any risk whatsoever, and you are simply interested in PIGGY-BACKING the long/short ideas of these day-traders. Again , as someone mentioned earlier, what is it that you are able to offer these traders besides deskspace? Hmmmmmm....
I haven't traded prop equities for a while now, but from what I remember, SIZEUP's figures are correct. Experienced guys rarely pay over .004 and there were guys in the office that were profitable almost every single day with very small drawdowns on the days they lost. However, commissions were crucial to their net take-home. They would've lost money net or broke even at the rates you posted. Also, you need bullets and the right execution platform. Other than that I think your deal might be pretty attractive to some of the guys in prop shos. Why not trade at a main stream hedge fund if the deal is similar to a prop shop? You might want to try putting a thread in the 'pro firms' forum.
I think what you are saying is pretty fair. Past performance is not a guaranteed of future performance. Look at any major funds, even respectable ones, like Janus or LTCM etc. Up and down cycles are part of the business. Being able to recover is the true trademark. Anyhow, when you say "I want to see someone's methodology in real-time. ". What does that exactly mean? Like looking over their shoulder as they trade? Most traders don't feel comfortable with that. But if you say at the end of the day, here are the trades and P&L then it could work out. Otherwise, it's too distracting to have someone constantly looking over your shoulders while you trade. As to the other comment,"Furthermore, I am very very skeptical that anyone can actually make money as a "day-trader". I really need someone to prove it to me in front of my face before committing my capital. " Aren't specialists and market makers in a sense the ULTIMATE DAYTRADERS? They go in and out every minute or less and earning the spread all day long. Same with floor scalpers. I don't understand the derision of "daytraders" when Wall St's main revenue generating source is bid/ask trading which is daytrading in its PUREST form. Hmm.. I don't see a difference in a good "edge" from a long term strategy vs a strategy that lasts within a day or even a few minutes. It's basically the same problem right: 1) risk 2) reward 3) cutting losses 4) money management, etc.
To answer your question, yes, I am very interested. So how may I help you? I am sure that I qualitfy and can help to make your plan work out.
I don't like the tone of your response and I really don't want to converse with you. I have been nothing but perfectly honest and open as to what I am looking for. To say that I am interested in piggy-backing a few unproven traders is absolutely ridiculous. I'm looking to give someone a deal similar to a day-trading shop, except I am allowing them the opportunity to work at a credible mainstream hedge fund. My motivation is simply to have a stream of income every month to help defer my Fund expenses. With regard to that, unless you have ever sought to raise capital for a hedge fund, I think that your statement about management fees, etc. is naive at best. First off, it depends on what your monthly expenses are (which are a function of the amount of talent you have, quality of talent, infrastructure, etc.). Furthermore, when you are starting an emerging Fund, you are happy to take in capital even at standard or reduced fees in the initial stages. Let's put it this way, the Standard hedge fund fee is 1/20. Even at $500,000 per year, this doesn't nearly cover my costs. Certainly as we grow and continue to increase our capital, we will turn into the black. Until then, we need to survive. Thanks.
Thank you for your response. Having been a trader for 13 years, I can certainly appreciate your comments about not wanting to have someone looking over your shoulder. Frankly, I don't have the time or desire to do that either. However, I would look at someone's trades in light of market conditions on a daily basis. I'm sure that I would not interfere with allowing someone to be comfortable trading, especially if it was their own capital at risk initially. Thanks!
To address your question regarding the comparison of Daytraders to market-makers of Specialists. That is a very simple one to answer. Market-Makers and Specialists have the edge of order-flow. Plain and simple. In fact, Specialists have edges other than order-flow as well. Day traders do not have this edge and never will. In fact, I can't see any edge at all that a day-trader has. It's not the length of time a trade is held that I focus on, it is the edge that the trader has in effectuating the trade. MM, Specialist= bid edge. Daytrader= no perceivable edge.