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Non-Tech : Meet Gene, a NASDAQ Market Maker -- Ignore unavailable to you. Want to Upgrade?

To: gene_the_mm who wrote (1365)	2/13/2002 6:27:10 PM
From: Bilow	Respond to of 1426

Hi gene_the_mm; Of course a lot of people still have this thread on their "SubjectMarks", so even though nothing has gone on for a while a post here will still be noticed. Can't given any observations, much less advice on hedge funds. I hadn't realized that volume was so far down on the Naz. -- Carl

To: gene_the_mm who wrote (1365)	2/14/2002 10:14:47 AM
From: 10K a day	Read Replies (1) \| Respond to of 1426

gene is that you.

To: gene_the_mm who wrote (1365)	2/17/2002 3:35:08 AM
From: Threshold	Read Replies (1) \| Respond to of 1426

Well Gene, if you want a following here, why not start educating the audience as to what tricks and tactics the MM's use to separate joe public from his cash. a steady and consistent supply of that type of info may just build the following you are looking for. we all watch the Level II dance as a distraction from the charts. what's the secret? divulge and prosper. aj

To: gene_the_mm who wrote (1365)	2/18/2002 2:10:25 PM
From: Dan Duchardt	Respond to of 1426

OOPS! Duplicate message

To: gene_the_mm who wrote (1365)	2/18/2002 2:12:46 PM
From: Dan Duchardt	Respond to of 1426

Hi Gene, Interesting to hear about your evolution and new interests. I was hoping you might get some responses from people in the know about hedge funds, but so far at least I'm not seeing any. I'm not terribly surprised by that, since I doubt that few of us who have read this thread would meet the eligibility requirement to invest in such a fund. It's well outside my range of experience, but it is my understanding that except for a limited number of participants the investors have to be well capitalized, sophisticated individuals who are likely to fully understand the risks. Perhaps you might fill us in on your understanding of the nature of such a fund, the requirements that must be met by investors, and the requirements that must be satisfied by a fund manager. For example, does the fund manager need special certification, or any certification at all for that matter? Could an unregistered person decide to start such a fund and solicit investors? Perhaps you could point to some reference material on the internet for those interested. I, and several others I have talked to share your belief that very short term trading has become increasingly difficult. I don't know how to allocate the cause of this to SuperSOES, or decimalization, or anything else, but I can certainly see that penny increments have made it impossible to profit from a "true" market making function (profiting only from taking the spread while serving as a middle-man between buyers and sellers). I have always believed that MMs served a legitimate (at least in theory) function as providers of liquidity, and that they deserved fair compensation for doing so. My heartburn with what I have observed in the market has been my perception that instead of making markets, those who have ben given granted the tools to do so have evolved into hugely capitalized swing traders with the power to drive the markets wherever they want them to go. In the absence of any profit motive for taking the spread that will be the only game left, so I don't see this as a positive change, and certainly not "better prices" for investors. I have toyed with a few hedging strategies of my own that I think have good profit potential. I doubt it's anything nobody else has thought of, but clearly there are things one could do with offsetting options and futures positions that would offer considerable leverage and consistently profit from time decay. It will be interesting to see what opportunities are created by the emerging single-stock futures market. I'm guessing the futures will not have the liquidity needed to make this attractive for some time, but who knows. Good luck to you, and the rest of us still trying <ggg> Dan

To: gene_the_mm who wrote (1365)	2/22/2002 5:42:24 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 1426

Hi, Gene. I traded and managed money for a hedge fund, so I know a bit of the game. However, I never started one. I worked for one that had a private family's money behind it. By far, the biggest problem with a hedge fund is raising sufficient capital. You cannot advertise and you don't have a record in the hedge fund format. Your other experience means that folks will be willing to watch, but actually convincing brokers to throw clients' money your way will be tough without the record on paper that they can show to well-heeled customers. Some managers backtest the trading system, but that has less and less impact as investors become more sophisticated. The administrative and legal crapola is a hassle. There are firms that you can pay a fee to to do that stuff for you, but you have to have reasonable size to make it worthwhile. You will probably also have to allocate commissions to brokers who provide you with clients. This and the fees for administrative junk really eat into your returns, as you will not get good prices on allocation trades. But there is a lot of upside and the business is great fun. Also, once you make customers a bunch of money, they tend to stay with you and bring in their friends. Good Luck.