Trading as a business

[Miggey]

Hello,

I'm a day trader and have made most if not all of my living this way for the past few years. Word of my success has spread to some family and friends. Some have asked me to trade on their behalf which I am willing to do.

My question is do I need to obtain any licenses, permits, etc and is it advisable that I form some type of entity?

The group would be kept small, limited to under 20 people, or maybe more eventually.

My style is to use technical analysis to trade futures, CDFs and forex in the European and US markets.

I'd appreciate any advice or references that I might use.


Miggey

 

[jpwone]

Hi Miggey

I understand Sandy at www.theblindsquirrel.com has done a lot of work on something similar. It might be worth dropping him an email.

 

[JonnyT]

Hi Miggey,

You cannot trade for others without FSA approval. This is a long and windy process and I think you will need a lot of dosh. It's probably not practical.

However you can set up a Limited Company and have Shareholders/Directors and trade through that entity.

Either way you need professional advice

JonnyT

 

[mmillar]

Don't mix family and friends with money. It will only end in tears.

 

[bonsai]

ditto
when you trade someone else's money it is NOT the same as trading your own !
And you will need to keep their funds very separate from your own.
And if they become disillusioned you will become the man who lost their money.
I won't mention some of the temptations that might creep in
but they are there.

 

[Skimbleshanks]

Whatever you end up doing, you'll need very good watertight contracts - in YOUR favour, not theirs. 'Cos when things get sticky (as perhaps they will), you'll be very glad that you have a contract to fall back on.

 

[Simon]

Miggey,

Why not impart your knowledge to some of these people & allow them to trade their own account, perhaps with limited guidance from you?

Regards,

Simon

 

[Trader333]

The only way I can see this working without getting FSA registration is to get those who would like you to trade for them to "Gift" you an amount of money. Part of this should include them signing a declaration that the money has been gifted to you and that they accept the money will not be returned. If you are profitable you could then gift it back to them.

It is important that they realise they could lose all of their money and gifting is a very clear way of doing that. Of course this involves them trusting you but if it is family then there should be no problem (I hope).

Others comments on here are right though I have seen families torn apart because of money before so be careful how you proceed.

Cheers


Paul

 

[jafa]

Hi Miggey,

This would be a very dicey business indeed for all the reasons mentioned above.

Add in the possibility of some sort of litigation sometime in the future makes this very unappealing.

I don't know about the UK, but here you can end up in court over the most absurd of reasons.

I have been approached also, but after examining the risks (not the least of which is losing friends) I have discarded the idea.

Cheers Jafa

 

[Miggey]

Thanks everyone!

I'd better think a bit more about this issue I suppose. After all, trading and money are not everything in life...?

Cheers,
Miggey

 

[CityTrader]

I think as far as the FSA would be concerned, you would effectively be starting up a hedge fund. Having had a few friends who have left well paid City jobs to start their own hedge funds, the only words of advice they have imparted upon me concern the incredible amount of compliance, paperwork, time, effort and bureaucracy involved. don't do it!!!

 

[oatman]

The FSA and compliance have killed the City. We all used to be in fear of US regulations, but they still seem able to rip the ar*e out of your orders and get away with it while in this country you can't even cough without being noticed. That's the UK for you. We abide by the rules and everybody else laughs at us and walks round them.
I feel better for that
ps. notice the "editor" didn't like ****.
Good luck