Never for intraday use of cash. And, yes, GS charges haircut... as do all firms that I know of....if you know of someone who doesn't, please let me know, LOL.. Don
Thanks for posting. I agree 100%. It is so amazing how quickly this thread manages to derail into a prop propaganda! I posted here to discuss the best legal structure for the hedge fund and the support stucture to go with it from those who are going along that path. I look forward to hear about Prime Broker options for small funds starting with about 4-5MM -- or if a fund starts w/o a Prime Broker, is there any notable disadvantages? Thx
Oh...ok...I see I thought there may have been some mistake..... wasn't sure. BTW: So all the Pairs Trades are getting hit with haircut fees?
Your problem is AUM. Put off the PB and Administrator and Auditor until your AUM are sufficient to handle the considerable drag. Under almost all circumstances youâd be better off with OPM in a Reg-T account. That is until yous get large
As far as pairs traders, some use excess capital, some don't... it all depends on their personal trading plan. Judging by the influx of new Bright traders, there's quite a number who are happy to have access to the money....(any business person who can make 10X by paying 1X for capital, will likely do so)....and we're glad to help, of course. (Just to point out, it's much better to pay a few points for capital than to give away 80%, IMHO). But, to each his own. All the best, Don
This is from page two of this thread. I wrote this 4 years ago and it still applies today. This thread was created as I was starting my firm - the purpose being to communicate with others who knew the business. This thread isn't about me, but since the legitimacy of starting small has been questioned repeatedly, maybe it's time I provide an update since so much time has passed. Originally, I was asked to go in with a partner who was more of a financial advisor than money manager. That didn't work out and I started my own firm several years ago. The experience has been very rewarding. My firm is successful well beyond my expectations, with last years performance being in about the 5th percentile of funds listed in the major databases. We have added clients and increased AUM exponentially. This is not some "friends and family" venture thrown together as a hobby. None of my clients are relatives or friends from anywhere except through the business. I spent nearly 18 months and many tens of thousands on legal, accounting and other setup to get this going. I still spend an annual fortune on audits, legal, accounting and regulatory upkeep...and I wouldn't trade it for any other job in the world. Just because I don't have a Wall St pedigree and didn't raise 500M out of the gate doesn't make my (or any other) fund less legitimate. I could cite many who have started very very small and grown to 9 figures or more with hard work and solid performance. This is NOT a debate about prop vs. hedge fund. There is an entire section of threads on this site for prop trading that has Don's firm clearly flashing as the sponsor. I would guess that there aren't HF guys going into the prop threads accosting prop guys over there and I would hope we can keep this thread on topic going forward. Thanks ktm
Some do some don't ....ok. Questions please: 1) The ones that do use SLK's money overnight get whacked for haircut charges....yes? For the budding manager, would you advise bringing OPM into a JBO type of account such as the one that Bright administers? 2) I'm curious about the ones who don't use SLK's money overnight in a pairs trade. Those accounts then must capitalized sufficiently (1:1) to carry those trades....yes? How much would you estimate those accounts would have to be funded for to make a decent living trading pairs... 500K....1mil...more? Thx
out of curiousity. how much would i need to deposit if i wanted to be long (non hedged, nor short) $20 million in US equities overnight. thx in advance.
Help a novice with some of the lingo please. AUM? What exactly is a "prime" broker? From what I've read they are the large firms that are experienced working with hedge funds. What advantage is there to using these firms vs. a non-prime broker? Say I want to start a small investment partnership of 1-2 million. Why would I want to use GS, MS or UBS? What would you get for using these expensive (I assume) firms? Sorry for the simple Q's but I suspect that many casual lurkers are wondering the same things.