Contracts- Pay the balance of £200,000??

[joelwright]

Hi.....I have just received an offer from a city firm. I am 21 and recent grad. Upon reading the contract it says that should I leave within 3 yrs and have not made the company £200,000 (£400,000 with a 50/50 split) then I must pay the balance (so they get at least this amount out of me).

Is this a joke? Is this normal?

I think I'll be a good trader but if something went wrong and I didn't take to it and wanted to leave they'd expect me to pay up. Is this enforceable? Surely as long as you don't lose the company's money they can't do this. Any help......

Many thanks

 

[Anonymous]

If it is a validly enforceable contract, um... well... (needs some more thinking about that one).

Do they give you a salary, how much? Is it more than £200,000 over the 3 years?

 

[joelwright]

No salary. Its a standard prop firm deal whereby you trade firm's capital, pay desk fees and then take 50/50 split.

I can understand that they want to deter people form leaving to trade for another firm but I'm only 21 and if after a year or so I decided that I wanted to do something else with my life then it sounds like they'd ask for this money.

 

[Anonymous]

1) you trade firm's capital = good
2) pay desk fees = no good
3) and then take 50/50 split. = in a profit and loss, if there is a loss who foots the bill?

If you start off a career without salary, can you gain trading experience comfortably? No salary yet have to pay desk fees?

 

[Tuffty]

joelwright, Is it an employment contract or will you be self employed?

 

[neil]

Same question on Elite Trader

Hi.....I have just received an offer from a city firm. I am 21 and recent grad. Upon reading the contract it says that should I leave within 3 yrs and have not made the company £200,000 (£400,000 with a 50/50 split) then I must pay the balance (so they get at least this amount out of me).

Is this a joke? Is this normal?

I think I'll be a good trader but if something went wrong and I didn't take to it and wanted to leave they'd expect me to pay up. Is this enforceable? Surely as long as you don't lose the company's money they can't do this. Any help......

Many thanks

I see you got more answers here on T2W to the same question you posed on Elite Trader:
http://www.elitetrader.com/vb/showthread.php?threadid=52833

Did they help?

 

[joelwright]

Daft contracts

Technically I'm employed for 5 months when I'm paid a salary for training but after that I'm self-employed.

As I said, I was offered basically the same job at two other firms, should I expect these daft contracts to come from them as well?

Thanks

 

[Anonymous]

What do you mean by "Daft contracts" or is it "draft contracts"?

Have you accepted the contract? As in, have you signed on the dotted line?

 

[joelwright]

What do you mean by "Daft contracts" or is it "draft contracts"?

Have you accepted the contract? As in, have you signed on the dotted line?

No i did mean daft contracts.....I haven't signed it. Are these 'prop shops' all the same do you think? They appear to have clauses over time spent at the company, money you have to make etc. etc.

 

[Anonymous]

What you can do is do a comparison:

Check around with the City's banks (those around the Strand etc.), see what their employment terms and conditions are for a similar position.

Check LIFFE and other exchanges' membership privileges, costs etc. as an individual trader.

Check the latest developments in electronic trading platforms, think of platforms like www.fxall.com , www.currenex.com , read The Banker and Euromoney magazines (hint: it means an individual can bypass the middlemen).

Think of the difference between salary and self-employed but have to pay desk fees, £200,000 etc.

Then think about whether you really want to sign on the dotted line. It's your life.

 

[Windlesham1]

Get a job as a nightwatchman, learn to trade for yourself,and keep 100% of your earnings. There may be some fast tracks to trading(evidently your proposed company doesn't know any),but for me trading is a marathon,not a sprint. I expect to be trading in 20 years time-if you have the handicap of a huge debt allied with bad experiences you'll never recover to trade again,I think. Go well young Skywalker.
Nurse..........
NURSE!!!!

 

[Anonymous]

Good idea with the nightwatchman job, but what I think Windlesham1 means is getting any salaried job is better than risk getting into debt.

Trading takes time, perseverance, and many times suffer days or weeks or longer with no profit. At other times you can make more in 5 minutes what many make in a month or a year. Even when you can consistently make a profit by arbitrage you still have to be wary of operational risks, like computer problems, and sabotage.

In my earlier years there were many financial firms, not functioning in the same way as the props you mention, they recruited people to be "brokers" to recruit customers to put money into the company, the "brokers" then traded the customers' money for them, or put their own money into the company to trade. No salary, no proper training whatsoever. Swim or sink.

Some whom I was acquainted with lost millions (their clients' money). There were those who, one day was driving around in a posh car, the next day jumped off a tall building because of mounting losses (not a joke, this is real).

It is not heroic to take the hard route.

 

[BroadSword]

...I am stunned that a firm would have the temerity to ask for this, and wouldn't touch it with a barge pole if I were you.

I totally, totally agree! Run very fast in the other direction.

 

[Tuffty]

Any lawyers out there? My thoughts are that as a self employed person you can enter whatever contracts you like, however as an employee the law is a lot firmer on what it will and will not allow. Not sure how they structure the contracts regarding this. On the surface it looks strange to me, but proper legal advise may be appropriate.

 

[Robertral]

hmmmm why would anyone want to enter into a prop shop on those terms....

The prop shop are actually getting a free call option on your PnL if u agree to those terms....I'd tell them to fook off and look for another job.........

 

[joelwright]

Thanks everyone

Thanks everyone for your replies.

Do you think all these prop shops have ridiculous clauses in that exploit your self employed status?

 

[qazwsxedc]

Thanks everyone for your replies.

Do you think all these prop shops have ridiculous clauses in that exploit your self employed status?

Not all of them, only the bad ones. :cheesy:

 

[Verno]

JoelWright, there are plenty of prop shops out there who won't ask this of you. Many of them will tie you in for a year and say you can't work for another firm for a month after or some may make getting your capital out difficult but none will make you pay a chunk of money if you don't make money.

As someone else said, run fast the other way. If you want to know names of more honest prop shops then PM me.

 

[khi]

Hi.....I have just received an offer from a city firm. I am 21 and recent grad. Upon reading the contract it says that should I leave within 3 yrs and have not made the company £200,000 (£400,000 with a 50/50 split) then I must pay the balance (so they get at least this amount out of me).

Is this a joke? Is this normal?

I think I'll be a good trader but if something went wrong and I didn't take to it and wanted to leave they'd expect me to pay up. Is this enforceable? Surely as long as you don't lose the company's money they can't do this. Any help......

Many thanks

hey fancy trading for me? i would half the min amount to 100k :cheesy: no desk fees and 50:50share...