Deal or No Deal?
- Thread starter Cotton
- Start date
And again, in reference to my previous post, those guys are rebate traders. They have an edge. Payout is irrelevant in that case. Look, I'm not trying to be a dick, there are many types of prop firms and certain structures only work with profit splits. The market making model for example works great with splits. Pure discretionary trading is horrible with splits.
I'd rather not say. I don't believe they have been mentioned here before and I don't want to come across as some shill - you know, some low post idiot pumping a firm no one heard of (turned off pm so people don't bug me privately). That happens here enough already. They do have one of those anonymous CL postings tho.
I have no idea who this firm is, but if you're new to the business and can learn on their dime, WITH A DRAW, you'd be an idiot not take the offer. Long term, Mav is correct, 50/50 sucks - but, if it allows you to learn the business while getting paid regardless of your performance, it's great.
Find out what the commission rate is, per thousand shares. That's the only missing piece of the equation.
Find out what the commission rate is, per thousand shares. That's the only missing piece of the equation.
Don't know what the rate is because there hasn't been a followup yet. But knowing they are non-licensed, overrides shouldn't be an issue and I know enough of rates other firms get and give to know whether or not it is bs or not.
As to the split, what I wrote is pretty much what was told - that it is a starting rate. Don't know what or if there are high water marks where that splir changes, like I said hasn't been a followup. I also assume that buying power increases too if you prove yourself. What would you consider decent bp with split to make it worth anyone's time?
But I am no newbie. I'm just looking for a place to trade and I can't go the regular route due to the U4 issue and my choices are rather limited.
If you're not new then there are other shops where you can put money down. Same reasons as you I won't name names but its' all been posted on this board. Seems with the split you're trading putting $ up for a % of p/l. That's okay if that's what you want and if you can up the p/l % as you build up deposit capital.
Since you're not putting up $ you can't really ask for BP, they'll probably start you with between $50k and $100k until you show results.
Guys, if i sound like a jerk, i apologize in advance.
I have been futures trading for several years, with some success. I have heard of the term "prop trading" often. Please enlighten me:
Do the prop firms have their own "trading system" and you trade their system only.
If firm is going to give you all the money (trader contributes 0) what does the trader contribute other than time? Does the trader take his "secret system" to a firm and he trades his system with their money?
In today's computerized world, a firm that has the money and their own system can trade with automated systems. Why would they give even 50% of their profits to a trader.
If the Prop firm is so confident of a trader's personal "system" that they will give him 100% money to trade with, why is the trader not confident of spending his own money, even if it is only $1000 and not use porps money. With the type of margins available to any trader today, if you have a winner system, one can make good money. So, let his own money build.
Based on the points i am making, knowing nothing about props, i am just skeptical about anyone giving someone else 100% of risk money and let you trade with it for 50% or even 90% of profits to keep.
Even though i am profitable in my trading but i do have my bad days, I would gladly work for a prop for 0% share in their profit if in the process I will learn their "secret" method of consistently making profits. After all even their proprietary "system" must also be uniquely profitable, only then they will let someone trade it with their money.
Lots of questions, am i making sense.
I appreciate the responses from the pros here. Thanks.
I have been futures trading for several years, with some success. I have heard of the term "prop trading" often. Please enlighten me:
Do the prop firms have their own "trading system" and you trade their system only.
If firm is going to give you all the money (trader contributes 0) what does the trader contribute other than time? Does the trader take his "secret system" to a firm and he trades his system with their money?
In today's computerized world, a firm that has the money and their own system can trade with automated systems. Why would they give even 50% of their profits to a trader.
If the Prop firm is so confident of a trader's personal "system" that they will give him 100% money to trade with, why is the trader not confident of spending his own money, even if it is only $1000 and not use porps money. With the type of margins available to any trader today, if you have a winner system, one can make good money. So, let his own money build.
Based on the points i am making, knowing nothing about props, i am just skeptical about anyone giving someone else 100% of risk money and let you trade with it for 50% or even 90% of profits to keep.
Even though i am profitable in my trading but i do have my bad days, I would gladly work for a prop for 0% share in their profit if in the process I will learn their "secret" method of consistently making profits. After all even their proprietary "system" must also be uniquely profitable, only then they will let someone trade it with their money.
Lots of questions, am i making sense.
I appreciate the responses from the pros here. Thanks.
Let me help clarify a few things here. There seems to be a lot of false information on this site about prop firms and how they work. The way most "futures" prop firms work in Chicago is they are actual salaried jobs. They are very competetive. Most these firms are spreaders. And most of them trade the yield curve. However as the yield curve trade has died, they have gone into energy spreads (crack, spark, calendar, etc). Some trade spreads in the grains now and various others. Their "secret" is not a secret. It's technology. You simply cannot trade and execute at the level and cost these firms can. You are basically trading at cost with rebates from the exchanges. A retail trader cannot compete with this for the most part. You also are using far better software and backend technology then you could ever trade with on your own.
Is it easy? F*ck no. It's insanely difficult, very stressful and very competitive. It's one of the reasons why prop firms go after jocks. But smart jocks. The guys that played sports in college but also had a good academic background. They also want you young. They don't have the time and money to re-train guys and get you to unlearn all your bad habits.
For the most part, they are not interested in your "system". So you are going to have to trade what they trade and how they trade. And for the most part, they are not discretionary. No one is using bollinger bands or moving average crossovers.
Keep in mind the futures model is very different from the equity model and even different yet from the option model. Also the Chicago model is different from the NY model although similar to the London model.
I should note that most the guys that work for salaries or that are backed are miserable. The self funded guys generally are much happier and generally last longer in the business. Burnout is very high. If you want a "job" where you have a boss that is going to chew you out every day, then sure, try to go after those backing deals or salaried jobs. Be prepared to work nights, work long hours, hate the people you work with and generally hate your job. There is a tradeoff.