Courses / Master Trader Program
Managing OPM
Other People's Money — fund management basics
Managing other people's money is the ultimate step in a trading career but comes with enormous responsibility.
Requirements: 1. Regulatory compliance (licensing, registration) 2. Minimum 2-3 year audited track record 3. Legal structure (fund, managed account) 4. Investor documentation (PPM, subscription agreements) 5. Risk management framework 6. Reporting systems
Fee structures: - Management fee: 1-2% annually on AUM - Performance fee: 10-20% of profits above high-water mark - Hurdle rate: Minimum return before performance fee kicks in
Psychological challenges: - Pressure of managing someone else's money - Investor communication during drawdowns - Career risk vs personal trading risk - Balancing performance with risk controls
Pro tip: Build your track record now. Even on a small account, document every trade professionally. This becomes your auditable record..
Common mistake: Managing others' money without proper licensing. Better: Get proper regulatory approval and legal structure before accepting any outside capital.
Key takeaways
- Requires regulatory compliance and licensing
- Need 2-3 year audited track record
- Standard fees: 2% management + 20% performance
- Managing others' money is psychologically different
Quiz
- To manage OPM professionally, you need: Answer: Regulatory compliance and audited track record. Managing OPM requires proper regulatory licensing, legal structure, and verified track record.
Educational content, not financial advice.