Office managers manage risk, not the traders. Traders are completely independent. The leverage is a function of being a member of an exchange and getting haircut relief. No one is actually borrowing you money. There is no backer. So no, there is no one to answer to who is putting up money. Volente, you really seem to have very little knowledge of the prop environment. Perhaps you should spend some more time researching the topic before you spend any more time on here pontificating about it. Just a suggestion.
You may prefer home, but I have the numbers to back up my argument. I'm not saying 100% of traders who trade remote are not profitable. But I will say this, of all the traders who trade remote, just remote traders, maybe 2% of them are profitable. Of all the guys in an office, I would say over 50% of them are net profitable. The numbers don't lie.
Let me further explain here. The reason why so many hedge funds are highly concentrated in south FL and Connecticut and CA is not because of the weather, or they want to be away from NY, it's because hedge funds tend to set up shop around pockets of wealth. If you are going to raise money for your hedge fund you are not going to set up shop in North Carolina, although the weather is beautiful down there. There also aren't many hedge funds in Seattle despite the nicer weather. So your argument is a little lacking. Hedge funds moved out of manhattan because NY is mostly a sell side town, not a buyside. They are not moving to "interesting places". LOL. BTW, I live in Chicago, and I would say 80% of all the CTA's in the world live and trade here. And guess what, it's not because of our beautiful weather. LOL.
-------------------------------------------------------------------------------- Quote from Maverick74: Trust me, any trader worth his salt will choose to be in a productive office over sitting at home by yourself. yeah right maverick, you truely dont understand the value of trading from home
Interesting numbers. I'd be interested in knowing where you came up with them. I have no substantiative numbers myself for ALL traders who are remote or ALL traders who trade in an office, but from the remote trader's I've personally worked with, the success rate is significantly higher and for the in-office traders I've worked with, it's lower. However, if you take ALL remote traders, and this includes people who are throwing in a few trades here and there part-time, using web based software (as opposed to Direct Access), didn't get any education, are constantly distracted, etc., then I would not be surprised by your 2% figure. Likewise, if you include ALL in-office traders, including the guys at MS, GS, MER, NMR, Fidelity, Vanguard, T Rowe Price, etc. I wouldn't be surprised if your in-office figure is low. I think the key is numbers in context to make this kind of statistical determination. Cash
Steel, I'm simply giving you the stats. You don't have to believe them. I really don't care. Every trader has their own unique needs. I sit here in Chicago and talk to 50 guys a week. Most of these guys are former floor guys or guys that are trading from home. I would say 95% of them tell me the isolation is absolute torture. Again, I am simply giving you my experience. I spend a lot of time talking to traders in Chicago. If you are in Chicago, we are doing a big trader social event at a bar downtown. A lot of guys will be there from all over. You can talk to these guys in person and see for yourself. These guys are dying to get out of the house. The reason we are now doing these monthly bar events is because guys need to get out of the house.
I might agree that a higher percent of profitable show up at an office. "Losers" can more easily not face the reality at home. And losing at an office isn't easy when you're with guys who ARE making $$$. That said, I think the percent of profitable remote traders is well above 2% (assuming we're talking about serious traders and not including the bored housewife, guy who dabbles while on vacation from work, etc.).
FYI, the total aggregate of net profitable traders is only 5% as a whole. So keep that in mind. The sad reality is, most traders don't make money. I know a lot of guys say its closer to 10% or 15%. I'm sticking with my 5% number though.
Through my contacts, I have the info from a lot of prop firms here in Chicago that probably include about 1000 traders from 5 different firms including my own. I understand why you as a remote manager are talking up the remote traders. I too, have a lot of remote traders. I just have no problem calling a spade a spade.
Mav, hey I dont doubt for a second trading from a office is a great idea, especially in chitown,, all im saying is there are also benefits to trading remotely... when I lived at fullerton and racine in chitown I enjoyed trading in a group downtown,, but different places may be a different story.... so. cal for example, could not hold a candle to chicago in terms of working with a group of traders