Australian (ASX) Stock Market Forum

Prop Shops in Australia

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Gringotts Bank said:
And then if you have that under control, what they really want to know is can you make them money, which is what % return is, yep?
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No sorry you are very wrong. They do NOT look at return or profitability in a % of account capital. For friggin obvious reasons!!
 
Trembling Hand said:
No sorry you are very wrong. They do NOT look at return or profitability in a % of account capital. For friggin obvious reasons!!
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Well it's not friggin' obvious to me! Perhaps I'll apply to Propex and tell them I lost 70% of my account last year. That should get me a seat next to yours truly. We can be trading buddies. :)
 
Trembling Hand said:
No sorry you are very wrong. They do NOT look at return or profitability in a % of account capital. For friggin obvious reasons!!
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I bet they must care how unprofitable you are though, and what happens when are unprofitable.

CanOz
 
Gringotts Bank said:
Well it's not friggin' obvious to me! Perhaps I'll apply to Propex and tell them I lost 70% of my account last year. That should get me a seat next to yours truly. We can be trading buddies. :)
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Ok I'll spell it out for you. They want traders who can size up, are active and can survive long term by controlling their own risk.

I've spoken seriously to three different ones. Never did they ask "what % return did you make the last......"

% return is nonsense when they are wanting you to go from 2 lots to 100!!
 
Trembling Hand said:
Ok I'll spell it out for you. They want traders who can size up, are active and can survive long term by controlling their own risk.
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Cool. I can do those three things quite well. Not sure if I'll make any money for the company, however. Do I still get a share of the profits?
 
Gringotts Bank said:
Trembler you're cracking me up today! :)

Prop shop will look at draw downs, frequency of trades, Sharpe, good money management, etc etc. And then if you have that under control, what they really want to know is can you make them money, which is what % return is, yep?
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GB, for the record, Sharpe is a measure of returns normalised over time and variance. That means of course that nobody would be examining TH's Sharpe ratio, saying "everything looks under control here, now tell me what your % return was."

Having spoken to a few traders, my understanding is that return profiles are actually not dissimilar between say a daily swing trader and an intraday trader (hinging largely on cyclical vol), it's the massively lowered variance that makes the difference between a Sharpe ratio of 1.5-2 and one of 6.

If all Propex wanted was a bunch of algos with a nice % return then they would have just payed some quants to make them. What they want is exposure to traders who are: scalable, dynamic and robust. They let the market separate the high Sharpe traders from the dead wood.
 
I think of Sharpe as a measure of risk-adjusted return, the higher the number the better.

Surely an algo can be scalable, dynamic and robust? They want people who make money, which is why I asked how much TH makes. Why so complicated with everything?
 
Trembling Hand said:
Nope. I get to size up to levels that are just not possible when trading your own account. The chance to be a real player :grinsking

The other thing is there is no account drag from tax, draw down, and living expenses etc. Hugely underestimated by dreamers who one day hope to trade fulltime.
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% return is nonsense when they are wanting you to go from 2 lots to 100!!
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And there it is RIGHT THERE.

And for those trading $5000 of stock
Try it with $500K.---of your money.
 
tech/a said:
And there it is RIGHT THERE.

And for those trading $5000 of stock
Try it with $500K.---of your money.
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Are you saying psychological factors come into play? Most of your Aussie stock trades are $5000 lots if I remember correctly?
 
sinner said:
Having spoken to a few traders, my understanding is that return profiles are actually not dissimilar between say a daily swing trader and an intraday trader (hinging largely on cyclical vol), it's the massively lowered variance that makes the difference between a Sharpe ratio of 1.5-2 and one of 6.
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What's a good Sharpe ratio? I read that S&P500 long term Sharpe is only 0.4. Does that mean a Sharpe of 2-3 is pretty decent?
 
Are there any Prop shops in Melbourne? I don't want to move to Sydney the coffee is lousy :D
 
skc said:
What's a good Sharpe ratio? I read that S&P500 long term Sharpe is only 0.4. Does that mean a Sharpe of 2-3 is pretty decent?
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Yep, 2-3 is quite good.

I believe 0.7 is the "benchmark" for finding trading systems with potential. e.g. if you code a super simple system like 30-50 day breakouts 30-50 day time exit and ran it across a basket of futs, the markets/systems which naturally give a Sharpe of >0.7 would be good candidates for trend following systems.
 
sinner said:
Yep, 2-3 is quite good.

I believe 0.7 is the "benchmark" for finding trading systems with potential. e.g. if you code a super simple system like 30-50 day breakouts 30-50 day time exit and ran it across a basket of futs, the markets/systems which naturally give a Sharpe of >0.7 would be good candidates for trend following systems.
Click to expand...

I read somewhere that any system that short volatility is going have a high Sharpe. It will work consistently well for some time... Until it doesn't work. Sort of like the quants model of subprime securities before they go bust. Or shorting the lotto numbers.

One example i can think of is simply long bank hybrids. You have a locked in 200bps outperformance against risk free bonds, with virtually zero volatility in the last 36 months. So you get a great Sharpe ratio. But clearly if things were to go wrong they'd go pretty wrong. Plus it is unlikely you can take that strategy to the prop shops!
 
Not sure if anyone has mentioned these guys yet.

Amscot which is the online broking division of State One Stock Broking have a equities prop trading desk.

They have offices in Perth and Sydney. Their online broking also pretty much blows everyone else out of the water price wise especially for day traders.

https://www.amscot.com.au/about/opportunities.aspx
 

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