what does FUTEX do ?

[FUTEX]

To try and keep the truth from the myth I will try to use this thread to answer responsibly posed questions. To kick off, let me explain. Futex is a proprietary trading and investment house. We have over 100 traders as at September 2011, either working from our offices or via partner arrangements from all around the world. We were established in 1995, and opened the first dedicated electronic trading office for locals in 1998 (what may have been called at the time an arcade). The arcade term is now a misnomer. We do not rent desks to third parties other than under exceptional circumstances.
Our business is to partner with Locals and make our returns from trading profits. Contrary to popular belief, we do not make money from renting desks, infact, we lose money from renting desks, but try to get as close to break even as possible.
Where we have been extremely successful is training people to trade. Over 90% of our traders are graduates of Futex Investment and Trading Academy. Demand is exceptionally high, and less than 1% of applications for backing make it on to the Futex sponsorship scheme.
I am happy to answer any questions, politely made, and hope this thread will be a good resource to anyone who may be interested in finding out what Futex is all about.

 

[Shakone]

Initially what constraints do Futex place on those they sponsor, in terms of market, position size, risk on a particular trade, and acceptable drawdown over several trades or daily?

 

[FUTEX]

May I assume you mean for a NEW trader: It depends on the market, the volatility of the market, and the individual. For example, for those currently trading Bund futures they would be expected to trade clips of 2 to 5 minimum, with 10 to 20 lots max position. A typical daily stop-loss for a beginner would be £1,000.
For Dax the size limit would be smaller, but for Currencies or STIRS much larger.
For those with experience, limits go much higher, in the hundreds and for a few in the thousands of lots.

 

[Pento]

Find it hard to believe that you could lose money by renting desks. Your office is based in Surrey and the desk rents are 2 grand?

I don't mean to be offensive or trying to STIR trouble (like what I did there?), but your overheads for staff must be huge if you are losing money on desks.

 

[FUTEX]

Find it hard to believe that you could lose money by renting desks. Your office is based in Surrey and the desk rents are 2 grand?

I don't mean to be offensive or trying to STIR trouble (like what I did there?), but your overheads for staff must be huge if you are losing money on desks.

They are less £2000 and we have offices in London too. Why do people pay for this, because they get more than this back in terms of the advantage it brings. It is like having a shop front on oxford street as opposed to the back end of nowhere. However, getting back to your question:

Pento, that is exactly why I started this thread so people could understand that which they make assumptions about. When setting up professional trading floors there is a raft of expenses that are not known or considered by many. To run an office you need to pay staff, you need to hire software, TT, Stellar, you have the professional services to provide, Reuters, Bloomberg, CQG, . You need two IT guys to look after it. You have to pay for rent, rates, computers, cleaners, decorators, the coffee machine. You even have to cost in legal fees. The list is endless. As an example of an unknown cost, in each office we have two back up batteries, that kick in if there is a power failure. They cost £18,000 each. We have direct lines to the exchanges at many thousands of pounds per month in lease charges. Thats the difference between pro-trading and bedroom trading.

Even if you strip the fixed costs out and take just one pro desk, you have the costs of software, ususally in excess £800, plus information services, averaging at £400 each. Remember at this level we are plugged in to all the top end providers, brokers, and various analytics.

All this has to be paid for even before one trade is made. If you take those costs and divide them by the number of traders, you will find it does not cover the cost. Thats why when people try to do it on their own, they rarely get off the ground.

 

[Pi3141]

Hello,

Excellent idea for a thread. Would you mind describing what a typical working day in the Futex office as a trader is like? Starting from what time you are expected to get into the office, what time you leave and everything else that typically happens in between.

Thanks

Pi

 

[FUTEX]

Hello,

Excellent idea for a thread. Would you mind describing what a typical working day in the Futex office as a trader is like? Starting from what time you are expected to get into the office, what time you leave and everything else that typically happens in between.

Thanks

Pi

Traders start 30 minutes before the open, so for europe either 6.30 or 7.30 . Lunchtime for most US products. Traders will conduct a review pre open. The review will include yesterdays trades, and also the overnight sentiment and moves and any pertinent facts. Trading commences on the open of course, and the Traders are under their own steam, taking breaks as and when they need them. The markets as you know have busy and quiet periods thru the day, and Traders work around those. They leave after the "cash close" of their markets. Some "nutters" even stay till 9 oc every evening. Thats briefly it, and it is not glamorous, but it is proven succesfull.

 

[Pento]

FUTEX

Thanks for your reply. When you break it down into all the separate costs I can see how the desks must cost you a lot. I like the business model and completely agree the advantages to working in an arcade/prop house outweigh whatever the desk costs.

 

[arabianights]

What happened to the first guy running your scheme?

How many traders have been accepted onto the scheme and how many are still at Futex (excluding those who have been there less than one year)?

 

[FUTEX]

which guy and which sheme, not sure what you mean exactly.
I would have to check the figures, about how many have been thru our training, but in excess of 120 have been thru our training. About 70 are still with Futex, some have moved away, some trade via other locations, such as new york, singapore, cypus, but mostly people stay with Futex. One or two succesfull traders also left because they decided trading was not the life for them.

 

[psixtrader]

Of the 70 traders can you give a ball park idea of what they earn per month. I can imagine that it may widely vary,but can you say that majority of them earn at least 5 figures per month.

 

[FUTEX]

Of the 70 traders can you give a ball park idea of what they earn per month. I can imagine that it may widely vary,but can you say that majority of them earn at least 5 figures per month.

Our wise one, states basically paraphrasing," If you are not going to make significant six figure sums if not seven figures per annum, go and find a different career, because otherwise its just not worth the hours and the stress"
As for what Futex traders earn, many earn 5 figures in a day when markets are like this. That is a very unfair question though, as some who are off form lose money, so its a balance.

 

[pboyles]

Our wise one, states basically paraphrasing," If you are not going to make significant six figure sums if not seven figures per annum, go and find a different career, because otherwise its just not worth the hours and the stress"
As for what Futex traders earn, many earn 5 figures in a day when markets are like this. That is a very unfair question though, as some who are off form lose money, so its a balance.

I understand you take graduates and then train them, I assume competition is tough for those places.

Dont you also have a scheme where people can pay to do the training?

 

[FUTEX]

We have Futex Investment and Trading Academy, but this is not the forum to discuss that, because I want to keep this thread pure from anything that appears to be promotional.

 

[pboyles]

We have Futex Investment and Trading Academy, but this is not the forum to discuss that, because I want to keep this thread pure from anything that appears to be promotional.

I understand but presumably the success rates there differ from the grad scheme. Have you published those statistics elsewhere?

 

[FUTEX]

I understand but presumably the success rates there differ from the grad scheme. Have you published those statistics elsewhere?

I have just checked with head of Training and we do not keep those stats. He said, we have testimonials on the web-site re individual successes, and we have one very successful hedge fund manager. Basically, we have a mixture on the floor of those who were hand-picked by Futex, and those who paid for training themselves.

 

[pboyles]

I have just checked with head of Training and we do not keep those stats. He said, we have testimonials on the web-site re individual successes, and we have one very successful hedge fund manager. Basically, we have a mixture on the floor of those who were hand-picked by Futex, and those who paid for training themselves.

Oh come on you know exactly how many make it and how many don't. Obviously it's not very many because if it was you'd be shouting about it.

 

[Pi3141]

I'd like to ask if there are any significant differences in the success/earnings between those traders that work in the Woking (sp?) office and the London office? The reason I ask is because I was just curious if the London office pulls in more profit maybe because of it's location in the city, or whether this really makes no difference because the methods taught in both offices and Futex as a whole are the same throughout.

Thanks,

 

[FUTEX]

There is no difference in profitability between the traders who work from London compared to Woking. The training is exactly the same as are the specifications of each office. It's down to Trader preference, location, and keeping teams together, as to how location is preferred by each trader

 

[pboyles]

There is no difference in profitability between the traders who work from London compared to Woking. The training is exactly the same as are the specifications of each office. It's down to Trader preference, location, and keeping teams together, as to how location is preferred by each trader

Have you been able to get the figures for the paid trainees v graduates?