I have a trading capital of 4 lakhs. I make around 2-3 % on it per month. (25-35% per year) I have done it from 3 months now. Where can I find a firm which provides me with a capital of around 20lakhs with a profit sharing model. 80%(me) and 20%(firm).
I found many websites who give you a trading challenge with a small capital and if you clear it then give you a bigger capital to trade with. The profit sharing they advertise is 90% trader 10% to the firm. But all of these websites were based off in US,UK and other countries. I couldn’t find any such model in India. Is there any?
Isn’t it too little of an amount,
for too short a period,
and doesn’t showcase how effective/reliable your strategies are, especially in changing market conditions.
Q1. How do you plan to utilize the additional capital (20L)?
a. were there additional opportunities that you had to pass on due to lack of capital?
b. if not, are you planning to take-up more risky investments? or explore investments with slightly lesser returns?
Q2. Does you existing strategy already deal with different market sentiments (bearish / bullish / sideways)?
a. If not, what is your plan to achieve similar/better returns in a different/varying market?
Q3. Can you elaborate a bit on your risk-management philosophy that was in place during the 3 month stint?
No company can fund others to trade derivatives in India as far as I know.
Zerodha could use all their cash to launch a leverage product if it was so easy
And, 3 months is lot less time to evaluate the trading performance. Take atleast 2 years on the same cap (without adding I mean), evaluate and see if you are able to handle all the market conditions without blowing up, then proceed to scale
I do option selling. I plan to continue the same with the additional funds. I agree that 3 months is too short a time period but I don’t think the percentage returns is small.
How much do you think is a good return per month ?
I was trying to highlight the fact that getting some returns on 4L
doesn’t necessarily mean one can repeat the same with 20L in hand.
Have you confirmed that there were enough option buyers,
such that you could have deployed 20L (additional funds you are asking for) and achieved similar returns?
Also, why do you think that folks will continue to buy options (offering similar returns) in the near future ?
Also, why would anyone offer you a 80% cut to do this (instead of doing it themselves) ?
Also, giving you a 80% cut (of 25-35% profit you claim to generate), will leave them with 5-7% returns.
That is lesser than the returns from a zero-risk 100% guaranteed sovereign GSEC.
With such paltry returns (after your cut), why should anyone take any risk with your proposal?
Market is race , you can’t fix your profit for the month . But you can fix maximum profit for the day . 10 % profit on investment per month is achievable target. Better strategies can give upto 20 % profit per month
Nope. I was merely telling him in a very serious manner. Pretty sure he wouldn’t approach them and take my answer as a precaution that taking such loans sinks.
35% per year means approx double every 2 years if compounded.
Good returns, and possible. But 3 months is a very small sample size, close to useless.
Taking loan to trade + this kind of sample size seems like a recipe for disaster. Much better to manage other people’s money and take smaller cut vs take loan + pay interest + full risk on oneself.
and take my answer as a precaution that taking such loans sinks.