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Thanks Bob! This all makes complete sense. It is pretty much what I was thinking was the case, but I just needed some verification. I am seriously considering signing up, so I wanted to make sure I was not going to be taxed on money I would not see (the 20% TopStep keeps). Thanks again!
Can you help answer these questions from other members on NexusFi?
ONE MORE PIECE OF NEWS BY TST:
Because of the volatility created by the covid19, now you have more restrictions.... basically you buy one contract at 8:40 and you have lost your account.
@SamJames already posted about TST restrictions on funded accounts during this volatility. Here's the rest of the new changes, including non-funded Combine accounts, as well as "Swing" (micros) and "Pro" (see their site for description.)
Personally, I think trading just one contract as your personal max is a good idea right now, unless you are a truly good, long-profitable trader who has a lot of experience in dealing with high-risk periods, but perhaps that's just me. I would do the same in a Combine, but maybe that's just me too. Control risk and you will be able to trade again would be my motto.
The reference to market limits being reached would be (I'm assuming) when futures go limit up or down. This seems to be giving their trade simulation problems in Combine accounts.
As to the 8:30 to 8:45 period, look at a chart. It can be a meatgrinder then. I would suggest observing this in your own live accounts and even in Combines. There is money to be made now, but accounts will be blown up too. Be careful, all.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
I am not a CPA/Accountant/tax professional either, but to my understanding, this is where a K1 outperforms a 1099. With a k1 you still get to honor 1256 [AUTOLINK]contracts[/AUTOLINK] (40% short term gains/60% long term gains) plus other benefits of a k1. Can be pretty big tax savings. Unfortunately, earn2trade/Helios is the only one out of these similar firms that offer a K1. I am still stuck on who to go with =[
@TopstepTrader will you ever be able to offer a k1 for funded trades? With losing the tax savings and significantly higher round turn costs for true professional platforms(unlike tradovate, ninja etc) It is giving up a lot more than 20%. With the volume of contracts a professional does a month you can get .25 side through an FCM and get platforms like TT, CQG Qtrader, CTS T4 "Advanced"(not CORE that you guys limit your traders to).
Offering a K1 is a matter of company ownership structure. It is the form that is used to report partnership and similar earnings of people who have an ownership interest in a firm. (Thanks to Google, because I had no idea what it was at first. ) So it's used by firms that are set up as an LLC or LLP or S corp. In the case of trading firms, their traders would be part owners of the firm.
I will have to just let the TopStep people respond on the question of their plans, but the thing that occurred to me is that if someone is already a professional trader, they won't be looking for any of these programs anyway, will they? These things are for people who are starting out, basically. If anyone is already doing high volume a month, is profitable with that volume and is able to negotiate low commissions based on their volume, they generally aren't going to be looking for funding with any of these firms, and won't need it.
I agree that an LLC or similar structure would be nice because of the tax situation and is something to think about. Part of the weighing of pros and cons, and an individual matter. I have no idea if there are any cons or not, and would leave that to professional advice.
Bob.
When one door closes, another opens.
-- Cervantes, Don Quixote
Thank you for all of your questions and feedback over these past few months. We admittedly haven't dedicated enough time to this thread, but that's all going to change! Please continue to engage here, and we will make sure you're getting the answers you're looking for.
We'll get a post up soon addressing questions that have gone unanswered, so keep an eye out! We are eager to jump back into the conversation. Thanks for your patience.
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