New- I come to the same conclusions as you re: hedge fund. I just want trade and make $$$$, not deal with any of the extraneous b.s. Question: What's a FIX system? Also wondering, a friend of mine at a hedge fund says he has a "REDI machine" that he uses to trade at .002 per share but I think he does a ton of volume. Have you ever heard of that?
Retail If you can make it on your own then there is no reason to do anything else. Love my freedom, travel a lot and trade for the hotels that I stay in. If you manage to get a residency permit in one of those conutries that is favourable for your tax then that is much better. Better to trade longer timeframe: less slippage, less mistakes, less tied to your computer, better lifestyle. Love IB - can trade the ES / Euro-USD / ER2 with a 28k modem. Screw this "server based" business model of the others where every time you log in have to download megabytes of software for working with IE! And then the datafeed of Ib is nice too: they "compact" the data to transmitting it about 3 * / second which really has a big impact on minimizing network traffic. And when there is 1 ~ 2 second internet latency that is 3* / second is more than fast enough. Besides that, my reaction powers are less than to be able to react in that timeframe. When at home I scalp, when travel I position trade. scalping has different requirements like internet uptime. Sherlock
I used REDI for a very short period of time (about a week). I hated it. But I know many who like it. FIX is a common interface to send message to a brokerage firm. IB offers FIX but it is quite expensive ($1,000 monthly minimum commission). Additionally, FIX is only for order information. It does not include quotes or account info. But it is supposedly rock solid. Here's some more info on it from IB: http://www.interactivebrokers.com/en/software/interfaceComparison.php?ib_entity=llc http://www.interactivebrokers.com/en/software/connectionComparison.php
For anyone who hasn't mentioned this and cares to share: What's your "style"? Who's your main broker? How's your biz set up (i.e. sole prop, sub s, LLC, LLP)? How long have you been trading profitably? What did you do b/f? Me: What's your "style"? I mainly daytrade, but am trying to learn how to swing trade to scale up use of capital. Who's your main broker? IB How's your biz set up (i.e. sole prop, sub s, LLC, LLP)? LLC, with elected tax status as a "sub s corp" How long have you been trading profitably? 2.5 years What did you do b/f? Sell-side equity analyst since grad school (7 yrs.) Got tired of all the new regs and b.s. and fortunately had a friend who was willing to teach me how to trade.
So you've got me wondering, at what volume/asset level would you essentially be able to become a self-financed "pro". In other words get prop-level commissions but through your own self-financed entity? And how would one go about doing this? Or is it just not worth the trouble and let IB take care of clearing, etc and just pay them the .01/.005 for their trouble.
Full time retail for a year. Part time +10 years. Sole prop. Use IB as main broker, Tradestation for technical analysis and back-up. Trade mostly index options, but also equity options, futures and futures options. Style is position/swing trader. A year ago, I was doing marketing for technology company.
Shred- Not sure if this one was for me, but a couple thoughts... My buddy with the redi machine works for a 2-3 bil hedge fund and probably trades a couple million shares a day just over the machine (not counting all the other vol he does). I don't know the "minimum". So far as becoming a "hedge fund" I think about it a couple ways. I've read estimates that the new "registration" process with the sec - if the fund is over $25 mil - (and it's hard to make real cash with less) adds about $200k/yr in administrative expenses. So, without running thru the numbers...1% of this and 20% of that, maybe that raises the bar to $50 mil to get a good start and that's b/f I have to try to find a place for that much cash, which would be a whole lot different that what I do now. I'm not sure if that's what you were asking, but hope it helps.
I wasn't looking to recruit customers, so I don't know how much the SEC would have to be involved. I just wondered at what point I could get things like sub .005 commissions and a redi machine as a self-financed entity. Anyone who knows is welcome to respond.