Basic questions before joining a prop

C

chicagodon

Please help me understand this correctly..

If I go to a cbsx prop firm and put up 10k on March 1st 2012, I can't get my deposit back until March 1st 2013, but I can withdraw profits on whatever schedule my firm allows?

Will my account show a balance including my deposit, example if I made $100 my first day, will it show $10,100? or just the $100?

What happens if after the first year my account is -$5k, can I only withdraw the remaining 5k from my initial deposit to close the account or am I liable for the $5k my account is negative also?
 
Quote from chicagodon:

Please help me understand this correctly..

If I go to a cbsx prop firm and put up 10k on March 1st 2012, I can't get my deposit back until March 1st 2013, but I can withdraw profits on whatever schedule my firm allows?

Will my account show a balance including my deposit, example if I made $100 my first day, will it show $10,100? or just the $100?

What happens if after the first year my account is -$5k, can I only withdraw the remaining 5k from my initial deposit to close the account or am I liable for the $5k my account is negative also?
More...

With us, you deposit say $20K. You make $5k, you now show $25K. If you wanted to resign, you give 30 day notice with $25K. If you were to lose $5k, you leave with $15K. No lockup of deposit. Your PnL is posted daily, hourly, actually by the second, so you always know where you stand.

Hope this helps, other firms may be different.


Don
 
Thx Don (nice name btw).. I thought Brights deposits were higher then 20k? What is your min, I was just putting out 10k as an example, but will be depositing more. Also, does a 56 work for Bright or would I have to get my 7?
 
You are correct. with CBSX firms, you can withdrawal all profits but not any capital contribution or deposit make into the account for 1 calendar year.
 
Quote from chicagodon:

Thx Don (nice name btw).. I thought Brights deposits were higher then 20k? What is your min, I was just putting out 10k as an example, but will be depositing more. Also, does a 56 work for Bright or would I have to get my 7?
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$20k for sure, sometimes $15k after some discussion etc. And, no, the 7 over-rides the 56 but not vice versa as of yet, maybe someday. One of the reasons I have shown that passing the 7 is preferable to the 56, at least it applies everywhere and you could get a job at Merrill (BAC) if worst came to worst. No big deal anyway, just takes a week or so of studying. Heck, every stockbroker passed it, how tough can it really be? LOL.

Don
 
anything you make or lose goes into your equity (which starts out as your deposit. any profits or loses are added or subtracted from here.

If you deposit 10k and in 1 year your equity is 5k, you can withdrawal it. The amount you deposit is required to be locked up for 1 year. So any penny over 10k you can withdrawal at any time but you can't withdrawal the first 10k in the account for 1 year.

If you deposit 10k and make $1000, your new equity will be $11,000 and you can withdrawal the $1000 profits.
 
This is the reason I have some trouble with people's "over-concern" about putting any money up. Most have taken out more than their deposits after a period of time anyway. The money is theirs.

And, for "non-deposit" firms, the money they make is split, therefore it is a long term deposit that keeps charging the trader every month. Of course, if they don't make money right away, they're gone anyway.

For more on these various alternative, for those who haven't read it, here:

http://www.stocktrading.com/startingtotrade.html


Don
 
Quote from Don Bright:

This is the reason I have some trouble with people's "over-concern" about putting any money up. Most have taken out more than their deposits after a period of time anyway. The money is theirs.

And, for "non-deposit" firms, the money they make is split, therefore it is a long term deposit that keeps charging the trader every month. Of course, if they don't make money right away, they're gone anyway.

For more on these various alternative, for those who haven't read it, here:

http://www.stocktrading.com/startingtotrade.html


Don
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It's like the old saying, "at the end of the day, everybody pays."
 
How would this work? Say I join a firm with 20k deposit and after 6 months I'm not happy. I know that it takes a year to get my deposit back, but can this firm 'block' me from going to another firm within that same year? Doesn't the original firm have to U5 me or let me go before I can join another firm?

Also, getting back to a previous question, how is is possible to get into debit with a firm? Won't they cut you after you lose your deposit?
 
Quote from chicagodon:

How would this work? Say I join a firm with 20k deposit and after 6 months I'm not happy. I know that it takes a year to get my deposit back, but can this firm 'block' me from going to another firm within that same year? Doesn't the original firm have to U5 me or let me go before I can join another firm?

Also, getting back to a previous question, how is is possible to get into debit with a firm? Won't they cut you after you lose your deposit?
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You can leave anytime you want. Getting the U5 is very fast. Once your money is gone, they show you the door or just kill your login from home. There are no issues with going to another firm. But the firm will not let you go into a debit.
 
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