Futex - company's financial situation

This is a discussion on Futex - company's financial situation within the Trading Firms forums, part of the Trading Career category; You don't need a lot of money to get a ton of leverage. Recently got the following email from a ...

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Old Jan 15, 2016, 5:24pm   #9
Joined Sep 2006
You don't need a lot of money to get a ton of leverage.
Recently got the following email from a prop firm to show you what i'm talking about:
£50k account [as in that's the money you have deposited with the broker:
max position limits EuroStoxx/Bund/Emini S&Pís:
Eurostoxx: 75 lots
Bund: 75 lots
Emini S&P: 45 lots
a combination of the three.

So doing the maths, balance of 1 million=
1500 eurostoxx max
1500 bund max
900 SandP max
a combination of the three.

It's still a lot, but also doesn't imply that there are traders doing really big business as the margin would be used up by the big boys leaving smaller traders locked out of trading?
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Old Jan 16, 2016, 12:41am   #10
DT
Joined Sep 2003
presumably some of the larger traders are self funded ergo they don't count... also if these guys are regularly taking on trainees then are they not going to have a revolving door of a dozen or so either trading on a sim or trading 1 lot... so they're not going to require much in the way of margin either

as for the rest then surely it is their net position that is important - presumably they don't need that much... I mean what sort of balance sheet does this sort of arcade really need - they've got a few dozen guys in some, presumably rented, office outside London... a bunch of PCs, some servers/leased lines etc.. few people in risk/trade support. The OP seems to portray it as something suspicious when it could well be fairly explainable.
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Old Jan 17, 2016, 1:43am   #11
Joined Apr 2015
Philly_UK started this thread
Quote:
Originally Posted by DT View Post
presumably some of the larger traders are self funded ergo they don't count... also if these guys are regularly taking on trainees then are they not going to have a revolving door of a dozen or so either trading on a sim or trading 1 lot... so they're not going to require much in the way of margin either

as for the rest then surely it is their net position that is important - presumably they don't need that much... I mean what sort of balance sheet does this sort of arcade really need - they've got a few dozen guys in some, presumably rented, office outside London... a bunch of PCs, some servers/leased lines etc.. few people in risk/trade support. The OP seems to portray it as something suspicious when it could well be fairly explainable.
And how would you explain that they assign only up to $20,000 per trainee trader, as they now openly state? If you lose that amount, you are out.
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Old Jan 17, 2016, 2:08am   #12
DT
Joined Sep 2003
I'm not sure what you're asking?
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Old Jan 17, 2016, 9:44pm   #13
Joined Apr 2015
Philly_UK started this thread
Quote:
Originally Posted by DT View Post
I'm not sure what you're asking?
I'm just stating the fact that as a new trader you are only $20,000 away from being sacked. Not a big margin for error
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Old Jan 17, 2016, 9:50pm   #14
DT
Joined Sep 2003
maybe not even that.... presumably some won't progress past the sim and others are perhaps going to lose less than that and get sacked...
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Old May 27, 2016, 3:13pm   #15
Joined May 2012
http://www.profit-loss.com/articles/...ading-at-futex
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Old May 27, 2016, 5:15pm   #16
Joined May 2016
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Originally Posted by Philly_UK View Post
The company behind Futex is Independent Derivative Traders Ltd. As of 31 May 2014 they had exactly £1,049,610 of current assets on their balance sheet. Considering they had about 70 traders at that time, that's only £15,000 per trader. That's enough margin for around 10 lots of FESX. This means the company can't give its traders the size they would need in order to achieve P&L necessary for a decent living.
These are pure facts behind all the smoke and mirrors. You can trade company's funds but these funds are not very large. Then you have a desk fee of £1,500, 40% of your profits and a tax of 20%. Simple maths.
That is a little presuming indeed.... It is possible that current assets that they post publicly are not part of the actual fund itself which may well be locked up in some BVI shell, I am guessing that most of us have life experience and no how to make the tax man uncomfortable, so in my opinion that is a poor judgement measure for any company. Public record is normally full of holes.
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