if you want to work for someone, it's similar to applying for any other job - whether they like you or not. to get that first interview, again, it's like applying for any other job, how do you stand out among the 300 other applicants? to run other people's money, it sounds like you looked into the firm that starts incubation funds. give it a shot.
Jimmy Jam, I think you have hit the nail on the head. After reading the posts all of you have been kind enough to leave, it seems that I am trying to rush things. I have a great system, and I just need to be patient. Apex's suggestion of managing investor's money while leaving it in their own account combined with me starting an incubation hedge fund to trade my own funds sounds like it might be the best option. Thank you. Daryl
I would try to go to a prop or somewhere your you can get real leverage/margin/haircut. That will allow you to trade bigger. I fyou could trade 3x bigger you would be looking at aroudn 15% drawdown and 90% year return. Things would grow a whole lot quicker. Becoem a pro on your own. Just my 2 cents.
Minmike, thanks for the suggestion. Do props require a certain # of trades per day/quarter? I am not a daytrader, hold my trades an average of 41 days, and tend to only make a handful of trades per month. My system takes time to produce results. Would they be patient in waiting for those results to be produced? Are there props you would recommend that would be receptive to this style of trading? Sincerely, Daryl
It sounds like you've achieved results selling spreads in QQQQ. Big deal. That's why you can't raise money. There's a million funds from Ansbacher to Chang to Niederhoffer ect. who're index premo sellers. They've all had the same results as you. Crowded trade. Institutional investors are bright enough to know that on any unhedgable "event" i.e. mid-session rate hike, you and your ilk will drop 20-30% in one minute. That's why your shallow d/d's don't matter. Everyone knows that your true drawdown potential is much greater than what's been evidenced in the environment of declining volatility.
Thanks for your reply Pa(b)st Prime. Just to set the record straight, I don't sell spreads. Also, I am waiting for opportunities of high volatility as you have described to make money, not lose money. "Unhedgable events" are my bread and butter. I get into the markets when they are greatly "destabilized" and get back out when they regress to the mean. Also, I am not claiming to be anything special or know anything more than anyone else. I am just trying to substantiate the fact that I have developed a trading methodology that I would think should be worth something to someone. But as I have pointed out in prior posts, I AM a self admitted outsider and have no perspective on what is strong/weak, good/bad/ normal/abnormal. Further, I know that those of you who are insiders have worked damn hard to be there and would therefore be knowledge about the process. And you are right in saying that my drawdown will most likely increase. Pa(b)st Prime, thanks again for your insight. Sincerely, Daryl
Eventually you are going to realize that tarders who think outside the box, don't follow the herd and are able to implement strategies which are not obvious to everyone with their similar education/mindsets wouldn't be accepted by the industry, anyway ... and so much the better, as that is always where the real value lies. Good trading, JJ
You say that you are selling premium, but NOT selling spreads? Selling puts maybe? Short with dispersion trades? ??? If it has a long and a short in it, or the underlying, it's a spread imho. Maybe if you detailed your methods a little, the more experienced traders here could point you down the right path - at least based on their experience, anyway. No, nobody will "steal" your method. Whatever it is, i will guarantee it has been done before. I do urge caution, tho. How would your method do if the Naz 100 stocks were down, week after week, for years? And with ferocious rallies in between? The last few years have been cake for prem sellers. That will end and take many many op sellers that got too comfortable with risk, to Blowout Land. Good luck in your efforts. <img src="http://chart.finance.yahoo.com/c/5y/q/qqqq"/>
Regulatory / compliance: no, I don't think it's the structure that matters, it's the fact that you are acting in a fiduciary capacity. Each asset class is different, and I have no clue what the rules for options are. You may well be exempt from formal registration, based on factors such as your AUM, domicile and representation actions (e.g., not holding yourself out as an investment manager to the public, etc.), but you'll need to do your homework. If you are exempt, still a good idea to act as if you were registered (record-keeping, performance measurement, fees, communications) at all times. Personally, I have no interest in running or being a part of a traditional, teamwork-based hedge fund. Continued strong performance -- both on an absolute and risk-adjusted basis -- on increasing asset base (client's and my own) is one of my key goals for 2007. Do investors make a distinction between the fund manager's funds and outside investment funds? - In my admittedly limited experience, yes, very much so.