[Tradewinds]

Trading OPM. I just heard the term "OPM", Other People's Money. Never heard that term before. I don't know if it's a common term in the retail trading world or not. Maybe it's used more in the world of institutional traders.

[MightyMouse]

Originally Posted by Tradewinds »

Trading OPM. I just heard the term "OPM", Other People's Money. Never heard that term before. I don't know if it's a common term in the retail trading world or not. Maybe it's used more in the world of institutional traders.

Have you ever heard of OPP?

[SIUYA]

opp - yeah you know me.
A sign of our ages!

goggle O.P.P. (song)

[MightyMouse]

Originally Posted by SIUYA »

opp - yeah you know me.
A sign of our ages!

goggle O.P.P. (song)

Ha ha!

Have you ever ever gone over your friends house to eat and the food just ain't no good? the macaroni's soggy, the peas all mushed and the chicken taste like wood. Sugar Hill Gang - "Rappers Delight" Old School. Very Old School

[TheNegotiator]

Originally Posted by Tradewinds »

Trading OPM. I just heard the term "OPM", Other People's Money. Never heard that term before. I don't know if it's a common term in the retail trading world or not. Maybe it's used more in the world of institutional traders.

I heard it said by 'Buzzy' in Pitbull.

[SIUYA]

I think there are a few ways to make money in various businesses, and are roughly summarized here when in comes to trading.....
you can leverage your own money - great freedom, highly risky
you can leverage OPM - either as a broker or a trader - less freedom, less risky, generally more profitable - even if you are wrong.
you can leverage other people - by investing in them, employing them etc; - variations on the risk and freedom aspect

Many traders working at instos cannot trade (due to restrictions) and generally due to different skills sets, their own money and hence maxmise what goes in their pocket by trading OPM. There are lots of ways to do it but for my two cents if all you are interested in is the money, then trade OPM. It also could be seen as a safety net.
would you rather trade your 10,000 for a 100% return where you keep 100% or trade OPM and amounts of 1 mil, for a 10% return where you keep 25% of the return?

[Tradewinds]

Originally Posted by SIUYA »

. . . There are lots of ways to do it but for my two cents if all you are interested in is the money, then trade OPM. It also could be seen as a safety net.
would you rather trade your 10,000 for a 100% return where you keep 100% or trade OPM and amounts of 1 mil, for a 10% return where you keep 25% of the return?

100% percent gain on $10,000 = $10,000
10% percent gain on $1,000,000 = $100,000
$100,000 * 25% = $25,000

So that would be $25,000 earnings trading OPM or $10,000 earnings trading my own money. On the surface, that seems like a "no brainer". But I have more questions.

One initial question for me is; "Is it the same or easier to get a 10% return on 1 mil than a 100% return on 10 grand?" I would think it would be easier to get the 10% return on the 1mil. But it gets more complicated that that, because I want to earn more that either the $10,000 or $25,000 a year. If I only want to earn $10,000 a year, then I can go get a minimum wage job. I don't think people are attracted to trading to earn $10,000 a year.

The other question is, what kind of returns are reasonably achievable? Let's say I traded for two years, and built up my account to $20,000 dollars. Then after two years trading experience, was able to make $1,000 dollars a day trading. That's approximately $250,000 a year. With the OPM example, to make $250,000 a year, with a 10% return, I'd need to get a return of 1 mil a year, and that would take 10 million of OPM. I'd need to be managing and trading 10 million dollars of other people's money. They would need statements, and consultations, and have their distributions managed, etc, etc. And I would need to find people with that kind of money and convince them to invest with me.

Then the next question I have; "Is it as easy or easier to get a 10% return on 10 mil as it is on 1 mil?" That's the big question I have. If it gets more and more difficult to manage the larger and larger amounts of money, then the balance point would need to be calculated.

[MightyMouse]

Originally Posted by Tradewinds »

100% percent gain on $10,000 = $10,000
10% percent gain on $1,000,000 = $100,000
$100,000 * 25% = $25,000

So that would be $25,000 earnings trading OPM or $10,000 earnings trading my own money. On the surface, that seems like a "no brainer". But I have more questions.

One initial question for me is; "Is it the same or easier to get a 10% return on 1 mil than a 100% return on 10 grand?" I would think it would be easier to get the 10% return on the 1mil. But it gets more complicated that that, because I want to earn more that either the $10,000 or $25,000 a year. If I only want to earn $10,000 a year, then I can go get a minimum wage job. I don't think people are attracted to trading to earn $10,000 a year.

The other question is, what kind of returns are reasonably achievable? Let's say I traded for two years, and built up my account to $20,000 dollars. Then after two years trading experience, was able to make $1,000 dollars a day trading. That's approximately $250,000 a year. With the OPM example, to make $250,000 a year, with a 10% return, I'd need to get a return of 1 mil a year, and that would take 10 million of OPM. I'd need to be managing and trading 10 million dollars of other people's money. They would need statements, and consultations, and have their distributions managed, etc, etc. And I would need to find people with that kind of money and convince them to invest with me.

Then the next question I have; "Is it as easy or easier to get a 10% return on 10 mil as it is on 1 mil?" That's the big question I have. If it gets more and more difficult to manage the larger and larger amounts of money, then the balance point would need to be calculated.

If you can turn 10k into 20k in 2 years by scalping ES, you can trade my money for me.