Capital Required to start your own shop

How much capital do you think you'd need to start your own prop trading shop or trading focused hedge fund?  I'm sure it depends on asset class so for the sake of argument, suppose you were a commodity trader that hates going into the office and wants to keep working remotely...

 
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get an IB account. Trade futures. If its to sustain yourself and grow, Id recommend having $250k capital to trade. Obvi with futures thatd give you access to as much as $2MM+ in index positions/gold/oil etc etc. 

Probably have $50k set aside for living expenses etc. So If you were to go at it your own, id say $300k. ASSUMING you know what youre doing. If you are not statistically profitable (i.e. p value less than 1%, so you know its not luck, its risk mgmt and skill) do not trade anything in size. 

I keep my trading account to ~$200k and i have no problem making fat returns of $20k to $40k a month whilst using maybe half my total buying power. Portfolio Margin is nice to have on IB too. 

IDK your question sounds to be one of a student or recent grad. setting up an actual fund is VERY EXPENSIVE and completely unneccesary for an individual. I wouldn't even think about it unless you had $2mm+ of investor capital lined up, and thats the absolute bare minimum. 

edit: i should say this has been a very good year but on avg i target 10-20k a month as a long term target.

 

I appreciate you taking the time to respond sincerely to what was in all honesty me venting about being forced back into the office after enjoying work from home.  Thank you! :)

Agree with GoodBread, you've got some pretty impressive returns!  Are you swing trading or what's your general strategy? 

Fuwuyuan

IDK your question sounds to be one of a student or recent grad. setting up an actual fund is VERY EXPENSIVE and completely unneccesary for an individual. I wouldn't even think about it unless you had $2mm+ of investor capital lined up, and thats the absolute bare minimum. 

No I've been in trading roles at various orgs since graduating college 5 years ago.  I trade commodities though, mixture of physical and financial.  And lately I've been doing some OTC structured products that I enjoy.  Long term the goal is definitely to set up my own fund and do this for myself.  I think I'd need that kind of capital or more to set up and do the kind of trading that I want to do.

I guess this post was a shot in the dark hoping to connect with people that have set up their own commodity prop shops or investment funds.  I've heard of people doing it so I was curious what it took to get the ball rolling.

 

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just google it...you're welcome

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