Commissions for trading on my behalf?

[meinkiev]

I want to start my trading by allowing someone else to trade futures on my behalf. We have set up a demo platform and all seems to go well. I need to know how much to pay this person for trades? Do I pay a set percentage of profits? This person is waiting on my guidance for payment mode.

But actually, I have another person who would like to trade for me. He is experienced and suggested payment of 20% of the profit if he traded stocks, or 50% if he traded futures, and another undisclosed figure for Options. The futures commission percentage seems way over the top to me?

Can anyone give me some general guidelines or suggestions on this situation? They would not have any permissions to take money from my account.
Any help much appreciated.

 

[dezzy]

Hi Meinkiev, there are no general guidelines on this situation, so it is hard to say whether the suggestion commissions are way too much. I believe as long as he is taking the money out of "profits", it is generally safe.

20% of a $10,000 profit is much more than 50% of a $1,000 profit remember that, so you have to take that into consideration when he quotes you all these. It's good to see his past performances in the various areas he is trading too.

Next, there is www.collective2.com that offers you forex,stocks,futures and options (not sure about options) automated trading, so you might want to compare the rates there before making any rash decisions.

Wish you all the best in your trading journey!

 

[meinkiev]

Dezzy, thanks for the help and suggestion.

 

[dezzy]

Dezzy, thanks for the help and suggestion.

My pleasure, glad I could help

 

[JonathanLeon]

Hedge Funds Charge 2 and 20.

I want to start my trading by allowing someone else to trade futures on my behalf. We have set up a demo platform and all seems to go well. I need to know how much to pay this person for trades? Do I pay a set percentage of profits? This person is waiting on my guidance for payment mode.

But actually, I have another person who would like to trade for me. He is experienced and suggested payment of 20% of the profit if he traded stocks, or 50% if he traded futures, and another undisclosed figure for Options. The futures commission percentage seems way over the top to me?

Can anyone give me some general guidelines or suggestions on this situation? They would not have any permissions to take money from my account.
Any help much appreciated.

Hedge Funds and CTA's charge a 2% management fee per year broken up over 12 months and 20% of trading profits is the industry norm. If he wants to trade the account for you he will need to become a CTA and have you fill out his disclosures etc. Most firms offer exempt CTA's for this situation but he wouldn't be paid through the FCM and they would need to make sure he had no financial interest in the account. You would be better off finding a CTA with a proven track record than going with someone preaching those figures. Only the top of the top fund managers will charge 50% and thats if they have done amazing for years.