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; The company behind Futex is Independent Derivative Traders Ltd. As of 31 May 2014 they had exactly £1,049,610 of current ...

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Old Apr 26, 2015, 1:23pm   #1
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Futex - company's financial situation

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.
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Old Apr 26, 2015, 3:10pm   #2
 
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That is rather presuming they have the same margin requirements as the man in the street.
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Old Apr 26, 2015, 4:02pm   #3
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Air is all over the place. Believe 2% of what you read and risk 2% of what you have.
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Old Apr 26, 2015, 4:56pm   #4
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Quote:
Originally Posted by DionysusToast View Post
That is rather presuming they have the same margin requirements as the man in the street.
Well, in theory margin requirement for day trading futures might be zero as this margin has to be posted for clearing after the end of session. However, even if it was 25% of what the exchange requires, £1m is still not a lot in terms of a company claiming to back their traders financially.
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Old Apr 26, 2015, 4:57pm   #5
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Originally Posted by Solas0077 View Post
Air is all over the place. Believe 2% of what you read and risk 2% of what you have.
By "the place" you mean Futex specifically, or prop trading industry in general?
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Old May 5, 2015, 5:53pm   #6
 
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Not sure how this stuff is accounted for, though you clearly do. So margins are definitely listed as assets, not potential liabilities (contingent perhaps)......say if someone blows up? In other words, are you 100% sure you are not misinterpreting the balance sheet?

Also let's say margin is classified as current asset, this could be equivalent of a shops stock, which if the shop required to sell stock to raise funds to continue to run as a going concern to say buy other more marketable stock then that would make sense classifying it as current, and liquid. However if Futex pulled their margin, the company could no longer operate as a going concern (unless it changed its business model etc).

So, what are all the other prop firms current assets? And please can you post the accounting standard regulation which confirms margin is posted as current asset.

Thanks in advance.

(Simple maths, flawed reasoning)

Last edited by rsh01; May 5, 2015 at 6:13pm.
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Old May 6, 2015, 5:19pm   #7
 
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did you get rejected by futex and now seek revenge? (albeit very poorly)
I would give accountancy career a miss also.
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Old Jul 15, 2015, 9:33pm   #8
 
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A grad starts out on a 50/50 split, when a trader hits 90/10 they would typically have 1mln+ on account and are essentially self backed. These are the guys with 100's of contracts.

The top 25% of traders have the most money and most size.

Consider how this skews the math.

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