Potential deals in Trading firms in London

[djcvdjcvd]

Hi everyone.

I am a futures trader who is working in a prop shop in London (50-50 split, trading their money) with 2 years of experience and a proven profitable track record over this period.

I am interested in depositing and risking my own money in order to get a better deal in terms of OVERNIGHT margin and profit split.

Does anyone know what is the norm in that deals? Lets say I deposit 30k and I will do 5000 RT in oils and STIRs per month. What kind of deals should I expect to receive?

for instance, does 100k overnight margin 80%-20% profit split make sense?

Thanks

 

[TaeKim]

If you can deposit the full margin requirements set by the exchange, then obviously you will be able to keep 100% of your profits.

You will need to pay a monthly license fee for software.

Finally, you need to pay exchange fees (exchange fees are fixed but there are exchange incentive programs, memberships and etc), and commission to you broker. If you are doing 5000 RT per month, you should be able to negotiate broker commission of about $0.15 per contract.

Now, since you have deposited 30K but need 100K in margin, the prop shop will need to make a risk adjusted return on their capital. There are four ways they can do this. A profit split, higher commission, desk fee and extra charge for software.

Without knowing your risk profile, and the rates you pay for commission, desk and software fee, it is difficult to say whether a 80%-20% profit split is fair.

 

[djcvdjcvd]

Thank you very much for your detailed reply TaeKim.

$0.15 broker commission sounds really good comparing to what I am paying at the moment. On the other hand I am currently taking part in incentive schemes that reduce significantly the cost per lot in some markets. I suppose that each prop shop has access to different opportunities in this field.

Coming in to margin again I would be really glad if you can provide me a very rough idea about the trade off between the leverage and the profit split (or the extra desk fees etc). Assume that I can demonstrate a 2-years steady profitable performance.

I need to know how much leverage I am able to demand since I give up some profit and since I take the full risk of losses.

Cheers