Can anyone explain me what is the advantage of trading at a prop shop, say, the same Coastal, instead of trading with a discount broker like IB? Also, I cannot understand what "locking depo for 1 year" means, could anyone elaborate on this?
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Anyone take/taking a job with Coastal Trade Securities?
- Thread starter MIK3707
- Start date
Quote from Doctor Leo:
Can anyone explain me what is the advantage of trading at a prop shop, say, the same Coastal, instead of trading with a discount broker like IB? Also, I cannot understand what "locking depo for 1 year" means, could anyone elaborate on this?
Basically,they take your money and commingle the funds with others peopsl to create a large pool, which is used to give traders intraday leverage (margin)...
I believe they keep it for a year, to avoid people just joining up and quitting (to reset an experiring series 7 license for example) and creating administrative hassles.
Thank you for the explanation. However I still cannot understand why this trick is a benefit. The only reasonable explanation for me is that this could potentially allow for trading with very high leverage (if all the pool's money is at your disposal), but this is for kamikaze I believe...
Any other advantages, anyone?
Any other advantages, anyone?
I can't speak of Coastal but I will tell you it is not sinister to hold the money for a year. It is a rule. If not you would be a client and not a member.
Any questions I can forward the reg.
Any questions I can forward the reg.
Quote from Doctor Leo:
Thank you for the explanation. However I still cannot understand why this trick is a benefit. The only reasonable explanation for me is that this could potentially allow for trading with very high leverage (if all the pool's money is at your disposal), but this is for kamikaze I believe...
Any other advantages, anyone?
Also, It allows customers to get around the pattern day trader rule. Basically if you make X amount of trades, you get flagged as a PDT, and must maintain 25K at all times in your brokerage account, if you were simply to open a retail online account (ameritrade, etc)..
Joining an llc allows you to get around this. So it basically allows people to get involved and try trading, with lower costs to entry. Also, some peopel like trading from an office where other people are, etc..
Quote from sublime:
I can't speak of Coastal but I will tell you it is not sinister to hold the money for a year. It is a rule. If not you would be a client and not a member.
Any questions I can forward the reg.
YES!!!!! Show me where this RULE is. The one where my money is lock-up for one year.
I'll email it to you tomorrow.
Yes please show this rule to me too.