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hope4gc 01-21-2011 10:39 PM

Quote:

Originally Posted by smisachu (Post 2260198)
What exactly do you mean when you say starting this business? Do you want to open a trading account on your own and trade? Join a day trading firm? Or open a Fund? Each one will have different implications on H1. You can open your own investment account with a brokerage firm and trade your own money, no problem with H1 what so ever.
If you join a day trading firm you will have to be on H1 with them. Very few ones do but I know of a couple who will do it. In fact a classmate of mine is working as a Trader/Analyst with a small trading firm in NYC. They have sponsored his H1.
Starting a fund, (if you can get the seed money :D), you open a LLC and sponsor yourself. You will be an employee of the company and draw a salary. You tell me what you have in mind and I will tell you what to do or what I did.

smisachu,
Thanks for that Info, here is my requirement
I am on H1B and plan to have my own company as a trader to trade stocks.
I will be the owner and wish to draw profits, may not have employee in my company for now(please advice, if i need to)
I need inputs to know what type of company should that be (LLC, S Corporation.. e.t.c.)?
Is it advisable to have a GC holder/citizen as partner?
What form of income should i withdraw(salary/profits/dividends/Interest..) How is the income considered when i file my taxes?
I am not aware of anyone who can sponsor my H1 as a trader atleast for now, if i get the right opportunity, i am open for that
Thanks again

smisachu 01-22-2011 12:20 AM

Quote:

Originally Posted by hope4gc (Post 2260906)
smisachu,
Thanks for that Info, here is my requirement
I am on H1B and plan to have my own company as a trader to trade stocks.
I will be the owner and wish to draw profits, may not have employee in my company for now(please advice, if i need to)
I need inputs to know what type of company should that be (LLC, S Corporation.. e.t.c.)?
Is it advisable to have a GC holder/citizen as partner?
What form of income should i withdraw(salary/profits/dividends/Interest..) How is the income considered when i file my taxes?
I am not aware of anyone who can sponsor my H1 as a trader atleast for now, if i get the right opportunity, i am open for that
Thanks again

1. If you want to trade stocks only, with your own capital ,then set up a LLC or C corp. If you trade other peopleís capital then maybe become a RIA.
2. If you form a llc you become a employee of your own company (say managing director, CIO etc) and sponsor your own H1.
3. You can have a fixed salary and a draw, which is what a typical trader gets. Draw is a percentage of the profits you generate by trading.
4. You donít need a gc/Citizen as a partner.
5. The company/fund makes money by trading securities and the earnings are retained by the company, you draw salary and bonus.
6. You file taxes as a regular employee would.
7. You might be able to get H1 from a day trading firm, a day trading firm is not a market maker. They trade company capital and typically you have to post some risk capital based on which they will provide you leverage and provide you with equipment etc. You donít get a salary, just a draw.

But let me ask you something; I am not aware of your expertise in the markets so forgive me if I sound patronizing.
1. Do you have a seven figure capital pool? You will need at least 1MM if you want to make a living trading.
2. Are you aware of the equipment and ECN and direct access software needed assuming you are technical trader.
3. Do you have a prime broker who is going to provide you leverage and settlement? If you have not decided consider Interactive Brokers.
4. What kind of risk management software will you be using?

If you are in the NY/Nj area I suggest try day trading at a firm posting risk capital (typically 10K) then decide if you want to do this full time. It will also help sharpen your skills. If you want I can recommend a few. They will not sponsor H1 though, you will have to have some consultant do that for you.

hope4gc 01-22-2011 01:41 PM

Smisachu,
One more question for now
Do i need to apparoach an immigration lawyer and a CPA for setting up a company?
I have PMed you with some questions you have asked
Thanks

floridasun 01-22-2011 03:45 PM

Quote:

Originally Posted by smisachu (Post 578958)
There are many good strategies but I have no idea on sophistication of each individual. For example right now you can sell credit default swaps on Goldman sachs medium senior secured notes and hedge it with delta units of binary in-the-money call options on the VIX. This will give you synthetic exposure to the notes with steady cash flow and the binaries are cheap. If goldman defaults the VIX will sky rocket giving you a handsome payout better than what you will have to pay on the senior secured notes because of high recovery rate if all the default climbs up to the senior tranche. Actually this would be equal to the end of the world in todayís market.

Or better yet just buy SPX and sit, the market is doing all the work for you.

The US natural gas market is in contango (I swear this is not jargon:o, there is no other term). So buy long dated/leap calls at the money now. In 2 years you will be so deep in the money you wont know what to do. But average retail investor cannot hedge this as he cannot trade spot.

So I guess my point is there are sophisticated ways to make money for which the average retail investor has no access to. If there is a simple way then it has already been exploited under the no-arbitrage clause of free markets.

If you have 2-5 year horizon. Go long the market and sit on it would be my best advice. If people want to meet and share ideas I am open to it. I live in NJ so NY/NJ is fine spot to meet.

good thread. I do little bit of trading myself from a personal brokerage account and made some pocket change (few hundreds by trading commodity ETFs) recently. in layman terms, can u explain wht do u mean by ' US natural gas market is in contango' .

smisachu 01-23-2011 10:57 PM

Quote:

Originally Posted by floridasun (Post 2263699)
good thread. I do little bit of trading myself from a personal brokerage account and made some pocket change (few hundreds by trading commodity ETFs) recently. in layman terms, can u explain wht do u mean by ' US natural gas market is in contango' .

First of all note that the original post was alomst year and a half old so dont go by the ideas there now :D

In commodity markets you trade futures and spot. Spot means immidate delivery of the under lying commodity. In futures you pay today for delivery at a future date. So typically the price of the future will be the price of spot + the storage charge (simple calculation to give you an idea considering no premiums). As the day of delivery approaches the price will pull to spot price. For example if west texas intermediate (WTI) crude is $92 spot price the 3 month future will be $100. (92+8 for storage). Considering that the spot price does not change at all, in three months time the price of the oil you will now be purchasing will be $92, but you paid $100 for it. This is backwardation. This is usually how markets are most of the time.

Now if in 3 months the price of WTI is trading at $110, you will own oil you paid $100 for and now can turn around and sell for $110. This is contango.

When you buy a commodity ETF, they dont take actual delivery of the product, they roll their contarcts. So they will hold a 3 month contarct and when the third month approaches they sell the contarct and get another 3 month contaract. If market is in backwardation then they will always be buying high and selling low. If market is in contango they will make money but as soon as it switches back to backwardation they will ride down the slide and loose all the money they made. So I dont think ETF's are agood way of making money in commodities passively. You can actively manage the ETF portfolio and make money using options and hedges and leveraged ETF's. But buy and hold, I suggest go and invest with a CTA who will be trading rule based to negate the effects of contango and backwardation.

Hope this is simple enough:)

smisachu 01-23-2011 10:58 PM

Quote:

Originally Posted by hope4gc (Post 2263366)
Smisachu,
One more question for now
Do i need to apparoach an immigration lawyer and a CPA for setting up a company?
I have PMed you with some questions you have asked
Thanks

I dont think so. I PM'ed back.

krishmunn 01-24-2011 09:29 AM

I have read in several forum that one cannot form own company and sponsor H1 through that. The logic is sponsoring H1 is work and you cannot work without H1.
I think it is acceptable logic. Otherwise many would have sponsored H1 for self.

Check with some attorney.

smisachu 01-25-2011 11:19 PM

Quote:

Originally Posted by krishmunn (Post 2270647)
I have read in several forum that one cannot form own company and sponsor H1 through that. The logic is sponsoring H1 is work and you cannot work without H1.
I think it is acceptable logic. Otherwise many would have sponsored H1 for self.

Check with some attorney.

I started my company when on H1 but I did not sponsor myself or anyone. I also did not withdraw earnings from the company since it was not my main income. I only started withdrawing earnings from the company after I got my GC and I can claim on taxes. But it is a good idea to ask an attorney.

floridasun 01-27-2011 12:30 PM

Quote:

Originally Posted by smisachu (Post 2268873)
First of all note that the original post was alomst year and a half old so dont go by the ideas there now :D

In commodity markets you trade futures and spot. Spot means immidate delivery of the under lying commodity. In futures you pay today for delivery at a future date. So typically the price of the future will be the price of spot + the storage charge (simple calculation to give you an idea considering no premiums). As the day of delivery approaches the price will pull to spot price. For example if west texas intermediate (WTI) crude is $92 spot price the 3 month future will be $100. (92+8 for storage). Considering that the spot price does not change at all, in three months time the price of the oil you will now be purchasing will be $92, but you paid $100 for it. This is backwardation. This is usually how markets are most of the time.

Now if in 3 months the price of WTI is trading at $110, you will own oil you paid $100 for and now can turn around and sell for $110. This is contango.

When you buy a commodity ETF, they dont take actual delivery of the product, they roll their contarcts. So they will hold a 3 month contarct and when the third month approaches they sell the contarct and get another 3 month contaract. If market is in backwardation then they will always be buying high and selling low. If market is in contango they will make money but as soon as it switches back to backwardation they will ride down the slide and loose all the money they made. So I dont think ETF's are agood way of making money in commodities passively. You can actively manage the ETF portfolio and make money using options and hedges and leveraged ETF's. But buy and hold, I suggest go and invest with a CTA who will be trading rule based to negate the effects of contango and backwardation.

Hope this is simple enough:)

Thanks smisachu. that was informative. FYI right now I am double shorting crude oil - with everyone calling higher crude oil prices in future, I may be in for a loss here... but willing to hold till I get break even :-)


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