|
Quote: |
|
 |
|
|
Good points SMW; however.... managing OPM can be VERY lucrative. Much more lucrative than your personal deal at a prop.
And that's what managing OPM is about - MONEY. AND MORE OF IT.
Think of it like this - if you can do what you are doing now and just trade much bigger sizes, why not? A 3 pt trade on the ES is 3 pts no matter if that's on 5 or 500 contracts. Only difference is the amount of zero's behind the P&L.
I think you've painted a very bleak picture of OPM and it's simply not the case. If you find competent advisors (key word competent) it's not that bad at all. It depends on how much you personally want to do vs. paying someone else to do it.
And not to mention, there are MANY tax, retirement, etc advantages to running a fund and/or CTA setup for you and the clients.
It's really about whether or not you want to scale your trading up or not. That's it. It's much easier to become personally wealthy trading 500 ES contracts vs. 5.  Of course, you have to be able to make money at it too. |
|
|
|
|
I'm not really biased towards one or the other.
I was illustrating it is a lot harder to get hold of OPM, and I don't really think it is worth it until your in a bigger league.
Most of the successful traders who go into managing OPM is because of the reasons I stated. They either 'hit their head' on the limit through prop, or have a trading style not suited to prop. They also want to do different things - run long positions, short term positions, options, etc. When you start getting too big and too complicated, you need a whole firm just to manage "you". You need more than a risk manager split between all the other traders at a prop. firm, you need your own risk manager, your own admin, etc.
The 'limits' you would run into at prop would be greater than 1000 ES. The biggest traders in the office I used to be at in London had limits of 4000 Bund contracts. 4000 not enough for you? Then yes, head over to manage OPM.
I guess it depends on your own local tax laws, but in London the tax situation is basically the same.