Trading for a family member

Discussion in 'Trading' started by Tech Analysis, Jan 27, 2004.

  1. Is it legal to trade stocks for a member of the family without being licensed or a broker?

    Scenario: An immediate relative of mine wants to give me some money to trade with - question is, how to report the profits (and losses ;) ) and who pays the taxes on them.
  2. simsim


    It is better to open account in his name and not mix up with own account.

    Other wise u can start an investment club if more family members are interested.
  3. The IB Family Advisor Account!

  4. sure, it is legal. your relative pays the taxes. you pay the taxes on what he pays you to trade for him.

    HOWEVER, i would advise not trading for family members, unless they are well aware of risk involved.


  5. gms


    You need to be authorized by them to trade their own separate account. Don't lump their monies with yours. Then, depending on your State's regulations, make sure you're not over the number of accounts you're permitted to manage without being licensed, as well as the SEC's. And very importantly, report to the family member infrequently, perhaps once a quarter, and never tell them the peak value of the account... that will save them from having to understand concepts they won't like, such as risk, equity curve and drawdowns :D
  6. mark1

    mark1 Guest

    Or do like i do, keep gathering money from your relatives, give back to them small amount of money each semester (2-3%) as result of your great trading skill, then when you are really full of money, read the thread on how to live in Thailand :D :D :D
  7. simsim


    This planet has shrinked, Mars wil be an option
  8. cvds16


    three words: don't do it ! nothing is as bad as trading for family, friends is a close second.
  9. Here's another question:

    If I employ a strategy in a joint trading account (LLC, etc.) that involves scalping, are the investors subject to the wash sale rule or is there a way for the company to elect MTM so that all losses are passed through to investors as well and deducted from gains?

  10. There is nothing worse than dispensing trading advice to family and friends except trading for them.

    If you enjoy Thanksgiving, Christmas and Easter get-togethers DON'T DO IT.
    #10     Jan 28, 2004