Hi friends
I have been tasked with setting up a new desk and exploring new markets at a prop firm of ~55 people. What is a reasonable profit split in general? Can provide more details if needed. Essentially what I’m doing is going to be solo’d off.
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Rule of thumb is that you can't support a profit split that's greater than 1/3rd (33%) of gross margin.
https://www.markables.net/trademark_profit_split
10-90%. And I can justify any of those values.
For a guy pointing and clicking with tight risks limits 90% can be fair.
For a guy who is resource heavy with using a balance sheet 10% can be fair.
Also need to ask out desks free which again can vary from 20k a year to 1.5 million a year or more.
Do you mean the profit split between you and the firm for your desk, or the profit split that you should be providing your staff that you bring on for your team?
If the former, my limited data points suggest that 10-15% is normal for the large funds to allocate to the desk lead, who has full discretion over how to propagate to analysts. The latter question is too variable, since it really depends how valuable the individual's contributions are. I would say anything between 0 and 10x base would be reasonable, 0 if the team loses money, and 10 if the team does extraordinarily well, and the individual has had a measurably immense impact.
There are 4 partners. I have the option to opt for very minimal salary for greater percentage of the profits.
Due to the nature and the way it’s silo’d off, is from my cut after all is said and done. What I’m asking is not how much I pay those who work directly for me, but how much the trading firm should give as profit. Would an even split between myself and partners be asking too much?
The firm is helping with API and all exchange connectivity stuff and that’s coming out of their pocket.
I mean to say that the salary I pay those working underneath me come from my split. With this considered, what is a reasonable percentage?
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