Trying to raise money part 2

Discussion in 'Professional Trading' started by zf trader, Jul 20, 2005.

  1. Thank for the feedback on my first thread. Here is a little different approach. It comes in three parts; first the fund objectives, then an example trade and finally my resume. Let me know what you think.
  2. Fund Objectives;

    The primary objective to generate monthly income streams through activity in financial markets. Maintaining capital and limiting risk will go hand and hand with the primary objective.

    Past Performance;

    Forth quarter 2004- 16% gain

    First quarter 2005- 36% gain


    Income will be generated using proven trading methodologies that take advantage of ultra low commissions and low volatility markets that persist today. These methodologies will have low correlations to traditional investments. Here is a summery of key concepts;

    -Always trade from a position of limited risk.
    -Use daily predictable increases in volatility to exit positions.
    -Trade in multiple uncorrelated markets to diversify away from risks.
    -Trade in multiple markets across different time frames of the twenty-four hour trading day.


    I have over three years of direct access and ECN trading experience totaling over $100 million dollars in trade. Being an independent I am free from conflicts that lead to churn and excessive fees and commission. I have also successfully started and ran businesses outside of finance.


    Management fees will be 20% of monthly payouts.
  3. Example trade;

    The goal of this trade is to profit in the congested overnight market while fully insured against excessive loss by owning a put and call (price insurance against an up or down move) for each future. The contract is the futures on the U.S. Government five year bonds on the Chicago Board of Trade. The goal is to exit all futures at a profit before the 8:20pm pit open and use the volatility of the pit open to exit the options positions (price insurance)at a profit. First 7 calls and 7 puts will be bought at a cost of 1,554.77.A limit order will be placed to sell one tick above the 5:00pm close and at each half tick above there. A limit order will be placed to buy one tick below the 5:00pm close and at each half tick below. Position will be closed by taking profits with a limit order one full tick in the profitable position and re-opened a half tick away from where they were closed. This should cover about the full natural range of the future during the overnight hours.

    Closing price-107-215
    Call Strike 108-000 (5/64)
    Put Strike 107-160 (9/64)

    Trading Activity
    (Expressed in 1/32 of $1000 or ticks)

    1) Buy 21 25) Sell 22
    2) Buy 20.5 3) Sell 21.5
    4) Buy 21 24) Sell 22
    5) Buy 20.5 23) Sell 21.5
    6) Buy 20 22) Sell 21
    7) Buy 19.5 20) Sell 20.5
    8) Buy 19 11) Sell 20
    9) Buy 18.5 10) Sell 19.5
    12) Buy 19.5 19) Sell 20.5
    13) Buy 19 14) Sell 20
    15) Buy 19.5 18) Sell 20.5
    16) Buy 19 17) Sell 20
    21) Sell 3 puts for 10/64
    26) Sell 7 calls for 6/64
    27 Sell 4 puts for 10/64

    The first trade was just after 8pm eastern July 18, 2005 and the last trade was at 10:15 am July 19, 2005.

    The maximum risk for the trade was 2101.65 producing a profit of $478.50 or a 23% gain.
  4. There are some grammatical, tense and spelling errors that I would correct before sending out.
  5. Work History

    September 2003-Present

    Financial Asset Trader, Assets include stocks, bonds, futures,
    options and mortgages. Traded over $14.2 million dollars in 2004. I am very skilled a financial risk management.

    March-September 2003

    Travel, I visited Britain, Mexico and Alberta.

    May 2000-September 2003

    Entrepreneur, started an appliance, real estate and environmental business.

    Owner R&M Rentals- We rent over 100 bar fridges at the University of
    Guelph over a 2 week peroid. It is a large sales and logistics effort.

    Owner GRIM Environmental Systems- Custom chemical free weed control
    for school boards and municipalaities.

    Owner Rental Properties- Managing accoadation for 24 students in
    Guelph. Duties included arranging financing and keeping tenants happy.


    Ontario Academic Credits, FE Madill Secondary School Wingham 1993-1998

    Agricultural Economics, University of Guelph 1998- 2003


    Sports including hockey and Australian Rules football


    Understanding finance and how it interacts with markets; this
    includes arbitrage, business valuation, macroeconomics and financial

    Sales skills such as cold calling, large group presentations and negotiating

    Knowledge skills such as making pressure decisions based on real-time
    information and analyzing large amounts of news on a daily basis.

    References Upon Request
  6. Sanjuro


    Here are some questions I would ask:

    1. If you say you have 3 years of experience in the management section, why do you only give 2 quarters of performance?

    2. What do you mean by ultra low commissions and how do you achieve it? Never heard that term used before.

    3. Correct the spelling of summary.

    4. I would ask you more about your outside businesses in detail and were they successful.

    5. What is the maximum drawdown experienced with this system?

    Good Luck!
  7. vikana

    vikana Moderator

    Please take what I'm going to say as constructive criticism.

    The whole style and content looks "naive". You have to plan at least a 8 to 10 page prospectus with historical simulations, graphics, statistical measurements. Statements like "limiting risk", without saying "how" is meaningless. This is the bare minimum without the legalize.

    Low commissions - a silly thing to say. The thing that matters is return and the risk you take, not what computer you run on, your commission schedule etc.

    20% fees without high water mark - again naive.

    I seriously recommend getting professional advice before sending this out.
  8. Please take what I'm saying as constructive. Unless you're offering a fund that is registered, you should consider taking these posts down.. they could be construed by the SEC as "marketing" securities to individuals who are neither accredited nor qualified and with whom you do not have a pre-existing relationship -- I only mention this because you used the word "fund".

    My advice is get an attorney and look at other offering docs. That way you'll know what you should write/disclose and how you should do it. Otherwise you might want to use private email.
  9. ktm


    These guys are right. Renting out fertlizer machines is one thing, but once you start accepting OPM, there are some rules that need to be followed. A few big ones that were written in 1933 and 1940 and still apply.
  10. mnx


    i don't wanna be super negative on you either, but if you want to 'trade' or make markets or whatever I would think you are much better off doing just that. join a prop firm if what you're doing scales well with more BP then you could have a lot of fun...

    have a good day.

    #10     Jul 20, 2005