Converting general Ltd to Prop firm

[maxima]

I am going to convert general UK Ltd company to be able to trade its own capital. And therefore account losses and profits on trading as losses/profit of the company.

I am going to trade myself.

Do I need to change articles somehow to accomodate this? Is there accountants who specialise in accounting for companies like this? Any other special actions (tax,legal,accounts) has to be taken to do so?

 

[donaldduke]

I am going to convert general UK Ltd company to be able to trade its own capital. And therefore account losses and profits on trading as losses/profit of the company.

I am going to trade myself.

Do I need to change articles somehow to accomodate this? Is there accountants who specialise in accounting for companies like this? Any other special actions (tax,legal,accounts) has to be taken to do so?

I dont think there are any legal requirements:

This is what you typically need to open a brokerage account for a ltd company:

Corporate Account - Private Company

Im sure that if there was any legal red tape then IB would have made you provide evidence of compliance when opening your account.

I use a regular chartered accountant, but if you can find an accountant that has experience of trading company accounts (and charges reasonable fees) then you might be better off going with them..

 

[grantx]

Max,

Wouldn't it be simpler to be a Sole Trader (or Self-backed trader)and submit a Self-Assessment tax form at the end of your tax year? Profit/loss (and expenses/costs) still accounted for.

Grant.

 

[maxima]

Max,

Wouldn't it be simpler to be a Sole Trader (or Self-backed trader)and submit a Self-Assessment tax form at the end of your tax year? Profit/loss (and expenses/costs) still accounted for.

Grant.

No the point was - to lease CME seat which gives you -$2 per RT and you can do it only for a corporate. I unfortunately dont see myself trading for an arcade (as soon as it has so many strings attached). And on retail prices it is difficult to make money unless you are a swing/position trader or something.

I havent made money to cancel my day job yet so these are just plans

 

[grantx]

Max,

What's the cost of a lease? You've also got your IT set-up to consider. And isn't the CME-only option a bit limiting?

Grant.

 

[maxima]

Max,

What's the cost of a lease? You've also got your IT set-up to consider. And isn't the CME-only option a bit limiting?

Grant.

There are quite a few options including full lease for 300K or something. I am thinking about cheap option which costs 2000 to apply. No fees (there is minimum round-trips threshold however).

As long as I know you dont need any specific set-up. Also you are not bound to trade only one exchange.

I dont see any other way for retail scalping for myself. These limitations are nothing to compare to those you get on arcade (as you painted it )

 

[grantx]

Max,

"there is minimum round-trips threshold however". What is the figure per month?

The only possible limitation with arcades is the minimum trading capital.

Grant.

 

[maxima]

Max,

"there is minimum round-trips threshold however". What is the figure per month?

The only possible limitation with arcades is the minimum trading capital.

Grant.

500 something.

The last information I had about arcades was : http://www.trade2win.com/boards/tra...ee-detailed-order-book-bund-2.html#post432514

The process of negotiations can take ages for me. I spent 2 weeks negotiating with 4 US brokers.

In the arcade list there are tonns of names and most of them UK businesses which mean more painful negotiation.

Also another guy told me that arcades require 1-2 years contract so you are bound to trade.

These 3 points altogether made me look for another way. Exlusivity of services (when you have to prove worth to talk to you), profit splt (which might be not bad thing when seen alone but in the bunch just exagrerates) and legal responsibility to be in business for lengthy period...

 

[grantx]

Max,

Two weeks is nothing.

No arcades (as far as I know) insist on contracts.

The procedure is very simple - 'phone and tell/ask them:

you want to be a self-backed trader
your trading capital
anticipated turnover per month
any experience (not always required)
can they offer the facilities
what are their charges (round-trip)
clearing fees
desk fees
set-up fees
profit split
any other costs/charges.

Always ask if vat is added to any of the figures - sometimes this is conveniently omitted.

The minimum expected turnover would be around 1000 - 2000 round-trips per month. If it's lower, you will pay higher rates.

Grant.

 

[maxima]

Thank you again for your efforts.

Not having binding contract creates much simpler perception of arcade business.

To make it even more clear. I found a guy who can sell me ES on volume 1000..5000 for about $3 per RT (I'll PM if you are interested). With CME membership I can get below $2. How much normally arcade quotes e-minis? [it is difficult if possible to compare euro products as US companies rarely interested in those]

 

[grantx]

Max,

$3 or c £1.50. I'm paying c 61pence round-trip on same volume.

Grant.

 

[maxima]

Max,

$3 or c £1.50. I'm paying c 61pence round-trip on same volume.

Grant.

No. $3 is for individual. If you lease a seat - below $2. 61p is about $1.2. 80c is quite a difference but I had 4.50 2 weeks ago. So jump to 3 is a big and to under 2 will be even bigger. So now you have to account all other parameters to make informed decision. I will have to get through these steps first anyway. Arcade is last stop in the trading career (or is it?). I am in very beginning.