Lynx Capital Partners

Discussion in 'Prop Firms' started by gibrahim, Jun 21, 2002.

  1. Daniel....

    Fair enough!! Good Luck...

    Don
     
    #101     Sep 18, 2002
  2. GHJ

    GHJ


    If a trader in company "B" loses more money than what's in his account, the firm takes the hit. Depending on how established the sub-LLC is, the firm itself may absorb some or all of those excess losses. Some fly-by-night sub-LLC's pass along ALL excess losses to the other members. This would definitely be cause for concern if you were a trader at one of these firms.
     
    #102     Sep 18, 2002
  3. The point being, do your homework.

    Know your risks.

    Know the risk parameters of the firm.

    Strategies of the traders of the firm. Scalpers, Pair Traders, Arb traders?

    Overnight Exposure? (Higher Risk)

    Leverage given to traders? Liberal (Higher Risk) or Conservative (Lower Risk)?

    Number of traders? Remote? Office Based?

    Read and understand what you sign.

    There are several threads discussing the risk of any LLC. My favorite is TheTraderProfit's post earlier in this thread:


    As far as Lynx Capital Partners, LLC is concerned, if you are concerned about your 5k to 25k deposit, then trade retail (with the same tools) and have SIPC insurance.

    Hope I can help answer any of your questions that concern Lynx.

    JWK
     
    #103     Sep 19, 2002
  4. This concludes this topic !!!
     
    #104     Sep 19, 2002
  5. Carboxyl

    Carboxyl

    Those three points are probably the best summary of the entire thread! And I know some traders are asking, where would I begin to "do my homework"? My recommendation would be to look at whether the subLLC has a backer that's financially stable. Lynx Capital in this case is the subLLC, and Andover is backing them....all you have to know is whether Andover is financially sound or not? And an easy way to do that is by seeing if they are self-clearing (in this case Andover is). It's not easy to establish your own clearing firm, you must be able to meet a high volume of trades per day and minimum amount of asset/revenue to even qualify...most other smaller firms (or don't do as well) may clear through SLK or Southwest, etc...Therefore, you can determine as a first step the risk parameteres of the firm (rule 3) simply by asking the trading firm regarding the self-clearing matter.
     
    #105     Sep 19, 2002
  6. OHLC

    OHLC

    One point to consider is the trader 's real exposure vs the financial stability of the firm.

    As an example one of the very secure and well capitalized firms asks for a 100k deposit, if the trader wants to retain access to certain trading vehicles.
    Another firm, a subLLC, not as popular, asks for a 5k deposit.

    So, in one case, the trader might loose 20 times more.
    Unless he deems the first firm more than 20 times safer, the less risky option is the second firm.
    Hence, the best option statistically may not necessarily be the more financially stable firm.(although risk is not the only criteria in joining a firm)

    Second point is the buffer capital in a firm vs the number of traders. Some firms expanded quickly and without increasing enough their capital through traders deposits. They actually end up with very little buffer capital per trader.
    This is one of the reasons why some firms do not allow themselves to have an unlimited number of remotes and use quotas.


    OHLC


    Not intended to bash any firm, just comments.
     
    #106     Sep 19, 2002
  7. nitro

    nitro

    Heh,

    One of the reasons I have not gone to a prof firm is the SIPC that retail gives me - as my buying power is almost adequate.

    I think it is really dangerous to give advice on these issues unless you are a lawyer and understand the ramifications of a sub-llc and the way that it has been set up. I can easily imagine that this has been setup so that the parent is not responsible for the catastrophe's of the sub.

    It's one thing to give advice on a stock where no one knows what they are talking about, another in a field where there is no gray area...If I were going to go to one of these things, I would probably get a lawyer to read over the docs for me. I may even write the SEC to understand my exposure better.

    nitro
     
    #107     Sep 19, 2002
  8. Agreed.

    If trading is your business, do the homework necessary to operate. The market will be there tomorrow.
     
    #108     Sep 19, 2002
  9. Granted the bar to self clear is higher than a firm that rents a 500 sq suite ,becomes a correspondent firm to SLK, Penson, etc. But if you call the regulators - SIPC, Depostiary trust clearing corp(50% sure of name) and the bar is not as high as you think. 500k cash a CFO, a compliance officer and several licenses. 500K is no small potatoes ( I wish I have 500K) BUT 500k in the context of having 100-400 traders using 10:1 leverage is nothing. Do your homework!
     
    #109     Sep 19, 2002
  10. Bryan Roberts

    Bryan Roberts Guest

    geezzzzzzzzzzz, i said virtually the same thing awhile back and had my head ripped off.
     
    #110     Sep 19, 2002