I suppose what comes to mind is that since the above is your belief system, why bother at all? Certainly a small differentially in commissions can't be particularly worthwhile in the sense of your overhead. And then too, I wonder what exactly is YOUR edge in terms of YOUR offering to this trader(s)? It seems to me that a talented trader with his own capital doesn't need to take a rather ordinary type of deal. What am I missing? And don't tell me the hedge fund stuff...since this possible trader is not going to be a part of the hedge fund. OldTrader
You are offering a real trader anything. You also don't understand anything about trading because how can you say a daytrader has no edge? There are many with an edge and "daytrading" has been around for a very long time just not in equities; rather commodities and floor traders. You also wont be able to match the fees the traders now are paying. But let me offer you something: If your fund does decent volume I'll offer you a better rate than your paying now to execute your trades.
Let me see if I can help this situation. He is trading the prospective prop/daytrader REPUTATION in return for revenue generation! To some this is definitely a viable deal, it's a shortcut into a world that is relatively closed. His best catch will be a profitable daytrader who wants to break into the business, but does not have the educational, or dare I say "political" connections to break into the hedge fund business. The comment on edge is quite disturbing. Any quant coming to me claiming to possess some sort of systemic and/or arbitrage-based edge is simply living on borrowed R&D time. Eventually if a new trick doesn't pan out I'll be paying his/her medicaid bills with my discretionary pofits (cough LTCM cough). Alot of large funds have an edge because they get preferential information flow, which the general trading public is not privy to at the same instant. I appreciate this strategy a little as atleast you have to pay the brokerages off to get into the loop, and your research department may actually generate some unique opportunities through these channels. I trade on my own capital base with commissions that are not super-spectacular and I make more money than managing and collecting fee's on a small fund. Approximately 70% of my trading is short term derivatives (in many cases 1-2 days in duration). There are many short-term privateers out there that would make me look like I was playing at the kiddy table, but I doubt they are interested in this kind of proposal. Profitable daytraders/short termers do indeed exist, but they are generally lone wolves and quite introverted. Like myself, other daytraders who are profitable will most likely be fiercely independent. Would we like to run 100 million dollars one day? .... maybe.... but not by the conventional ivy league, cookie cutter, secret handshake approach. I hope all parties involved really do find what they are looking for, but it will be an interesting road for both buyer(s) and seller on this particular transaction. Goodluck,
I couldn't see why any successful trader would want your deal. The other posts sum up my feelings also. Why would we use our strategies for your interests? MK
the point here is that he is offering profitable day traders an "in" to the world of hedge funds. there are those of you that would like to manage large sums of money one day, and this is an opportunity to "prove" your worth to a legitimate player. yes, of course, you can get a better deal at some prop shops but that will most likely lead nowhere--face it. this offer definately is not for most, but for those of you who want to "break in" this is your chance..... best wishes, surfer
If he's got so much confidence in his strategy, let him put his money where his mouth is and then I will consider putting up my capital along with his. There is a slight difference between trading the firm's capital vs. trading one's own capital. If one trades the firm's capital, one thinks more about trading than money. In another words, you don't count the money while you are sitting at the table until the dealing is done.
While I do not believe that daytraders have any edge at all, I do believe that there may be a diamond in the rough out there (ala Steve Cohen, etc.) waiting to be found. I'm not willing to risk my nickel trying to find that person, however, if one is willing to put their own capital behind their actions, I'm willing to offer them a platform from which to do so. Let's say it didn't work out, would that person rather have on his resume, Trader- Worldco or Long/Short Trader- XYZ Capital Partners, L.P. I am offering a rare chance for someone to break into the VERY difficult world of hedge funds and I am asking them to prove themselves. Not much to ask. If you don't think it's beneficial to be a trader for a Fund, you are welcome to continue along trading your own capital keeping your profits and suffering your losses (which is basically what I am proposing anyway, except i'm charging .25c more and giving you a nice office space with genius collegues). Like I said, I'm not looking to fill a room, 1 or 2 guys is fine. FYI, as far as revenue is concerned a trader doing 200,000 shares per day with .25c going to me as my vig= $10,000 per month in revenue. Hire 3 of those guys and the $30,000 extra in revenue per month helps out a great deal. Capice?
With all the respect, you have no business telling me that I don't know anything about trading. I'm quite sure that I know more than you think! As for the "edge", I believe that you are showing your ignorance. Maybe I am not making clear my definition of a daytrader, as I define a typical person sitting upstairs in front of some REDI platform trading to get ahead of Goldman or whatever. I am not referring to floor traders,etc. As I stated before, Floor traders have a tremendous edge (order flow, speed, illicit deals on the floor, etc.). Market Makers, have a major edge in terms of leaning on Order flow. Day trading worked during the bull market because people generally enter trades from the long side, and thus are inherently keeping a long position overall. If the market is rising powerfully like 97-2000, an idiot could make money daytrading (being long). In other words, they were making money but they didn't even know why they were making it. It was the market bailing them out, not their skill as daytraders. I tip my hat to anyone still surviving, however, if you don't believe what I am saying, just look at home many daytraders are left.
Incidentally, even though you tried to insult me, i'm still willing to listen to your commission rate offer. Whatcha got?