Difference bet Prop firm, trading for bank/financial inst.

marketsurfer · Mar 27, 2006

Quote from FaderTrader:

I know for a fact Prestige pays out 100%, 80X leverage, rates as low as .003/share

Liquid 100% payout as well, 100X Leverage, no clue about the rates.

yes, i have heard this also about prestige. what has your experience been with them?

thanks!

surfer

FaderTrader · Mar 27, 2006

Mulling a move there soon.

Right now I'm with a shop that put up the money for me, so I am obligated to give them 25% on top of a heafty ticket charge.

It was fine when I first began as I was happy just to be able to trade, but I'm past it now.

Prestige offers Blackwood, which is a copy of Anvil/Hammer. The guy who owns Prestige was one of the founding partners of Andover before they sold to Sunguard.

marketsurfer · Mar 27, 2006

Quote from FaderTrader:

Mulling a move there soon.

Right now I'm with a shop that put up the money for me, so I am obligated to give them 25% on top of a heafty ticket charge.

It was fine when I first began as I was happy just to be able to trade, but I'm past it now.

Prestige offers Blackwood, which is a copy of Anvil/Hammer. The guy who owns Prestige was one of the founding partners of Andover before they sold to Sunguard.

cool. thanks for the info.

surfer

formikatrading · Mar 27, 2006

I'm currently researching prop firms and it seems as long as you're putting up decent money $20-25K (not the 5K people often mention for prop firms), you should expect 100% payout, good commission rates and then a charge of somewhere around $200/month for software/system, etc. However, if you do decent volume, that monthly charge will be rebated back to you. Does that sound about right to everyone else?

Quote from FaderTrader:

Not insane at all. If you're familiar with the prop industry, you'll know that 500,000 shares per month is a small-time trader.

That's MINIMUM $1500/month commish for each person. Prestige has a two-floor loft in manhattan with over 100 traders.

So, the very low end is 150k per month for Prestige. I figure the rent is 20-30k. The only other expense they have is the hardware.

So, you figure the owner is netting a solid 800k/year for very little work. All he has to do is ensure than the pros are able to be profitable and that the fish are able to churn all day long.

FaderTrader · Mar 27, 2006

Quote from formikatrading:

I'm currently researching prop firms and it seems as long as you're putting up decent money $20-25K (not the 5K people often mention for prop firms), you should expect 100% payout, good commission rates and then a charge of somewhere around $200/month for software/system, etc. However, if you do decent volume, that monthly charge will be rebated back to you. Does that sound about right to everyone else?

You don't need to put up a ton to get that deal - it's really about your own negotiating skill.

Here's my take on it -

Join a trading group WITHIN a prop firm. You just buy B Class LLC Shares. They are incentivized to help you become profitable. Obviously the question of safety of funds comes up, but your initial exposure will be limited to 5k.

5k will get you 500k in BP. So realistically, you'll need to up closer to 10k....

I'm also assuming in all of this that you aren't a complete newbie. If you are, then you'll blow right through that so quickly you won't believe it - mostly because you'll be getting into too much size, averaging down and whatnot.

Copernicus · Mar 27, 2006

Quote from FaderTrader:

[Prop traders don't let stocks move against them by points at a time. [/B]

you would be surprised :-)

heavy · Mar 27, 2006

"Well, you need to realize that they aren't going to let an account go to zero."

Hehe... I've seen MANY accounts go waay past 0. Even 6 figures in the red, if you can believe that.

fliesch · Mar 29, 2006

"Join a trading group WITHIN a prop firm. You just buy B Class LLC Shares. They are incentivized to help you become profitable. Obviously the question of safety of funds comes up, but your initial exposure will be limited to 5k. "

What do you mean by that? Does this tradinggroup trade a pool of money within the prop firm?

=> Definition + pro's/con's of a trading group?

FaderTrader · Mar 29, 2006

Quote from heavy:

"Well, you need to realize that they aren't going to let an account go to zero."

Hehe... I've seen MANY accounts go waay past 0. Even 6 figures in the red, if you can believe that.

.

So, you're telling me that in instances where a trader went to a prop firm, put up money in order to buy leverage, that they let him lose more than his initial deposit? Impossible.

Most firms won't let you lose more than half of your deposit before asking you to replenish it.

Copernicus · Mar 29, 2006

Quote from FaderTrader:

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So, you're telling me that in instances where a trader went to a prop firm, put up money in order to buy leverage, that they let him lose more than his initial deposit? Impossible.

Most firms won't let you lose more than half of your deposit before asking you to replenish it.

of course they wont let, but when things go bad they go bad, when things gap risk management can only watch, same thing when someone jumps in with a basket when things are moving, by the time they cover your positions, your 5k or whatever is long gone. Airport trade on a supposed mistake 5 seconds before the close will do the trick too. Supposedly you are long/short 5k of stock with next days earnings, 5 seconds to close you mean to cover, but "somehow" you put in wrong order to double your position.