Funding new traders Search for a better business model

[bone]

They all operate in the Futures domain some of them have Education selling as part of it other;s only have paid test . ( as compared to the true props who hunt talent at their own cost Dont charge people for any test )
So my question was if equity props firms are regulated like hell to protect mum and dad investors (Maverick's point) from scrupulous operators , then why not Futures props?
Does it matter if it is equity or futures or option?, it is still risking money !

And I am asking you to name names please - be specific! I am not aware of any “prop” firms selling education or making someone pay for a test in order to trade regulated futures for that firm! In fact, I’m pretty sure the exchanges and the NFA wouldn’t allow it.

Also, IMO you’re a bit misinformed about futures proprietary trading firms - they are required by exchange rules to be registered with the exchanges. They are specifically NOT allowed to risk employee (trader) funds. They are required to pay traders as employees on a W-2.

Futures exchanges are SRO’s - self regulated organizations. They have a regulatory agreement in place with the SEC and the CFTC. The NFA is an SRO. It’s not correct to say that Futures and even a Futures prop firms are not regulated. They are regulated by the Trading exchanges as part of the Commodity Futures Trading Act. In fact, every electronic order coming out of a registered futures prop firm has a unique identifier tag.

If someone is running a fraudulent futures prop firm - that would be referred by the Trading exchange and the NFA to the CFTC. In turn, the CFTC would determine if criminal charges should be filed - if so, they would refer that to the Dept. of Justice.

 

[Maverick74]

Bone, I was not referring to your Education training business, I was referring to so called Prop who has a model where people pay for a test and hope to get funded.
They all operate in the Futures domain some of them have Education selling as part of it other;s only have paid test . ( as compared to the true props who hunt talent at their own cost Dont charge people for any test )
So my question was if equity props firms are regulated like hell to protect mum and dad investors (Maverick's point) from scrupulous operators , then why not Futures props?
Does it matter if it is equity or futures or option?, it is still risking money ! from the point of view of consumer protection) and Futures trading is becoming mainstream !
Simply put with automation testing for talent should not be expensive now a days and that way it can take away this stigma of hamster wheel. and trading can still be bought to masses and those who have talent get funded!

You keep saying something that is factually incorrect. The firms you mention who are running combines or selling education are NOT the backers. This might seem trivial to you but it's not. I could create an entity called "Mav's Trading Superstore" where I sell training and then the guys that show promise, I can send to my buddy's firm, "Superstar Traders, LLC" to do the backing. They are completely different.

And second, futures trading is not mainstream, not even here on ET. LOL. I think less than 5% of the posters on this forum trade futures and the name of this site is called "Elite Traders". LOL. Go figure. So no, mom and pop are not trading them and people like me would not welcome the additional regulations and fees imposed on my trading so that a few mom and pop types can be "protected" from themselves.

 

[qlai]

if equity props firms are regulated like hell to protect mum and dad investors (Maverick's point) from scrupulous operators , then why not Futures props?

Do people here generally agree with this statement? I don't think equity props even bother to separate education services from funding. I'm thinking T3 and ifundtraders as example.

 

[Overnight]

I am not sure what is going on, but to see Mav74 and bone have a discussion is worthy of some popcorn. But I AM disturbed by Mav's thought that he thinks that only 5% of people on this forum trade futures? Geez, what else are they trading? Stocks, options, bonds, FX and all that? I weep for the future.

 

[Maverick74]

I am not sure what is going on, but to see Mav74 and bone have a discussion is worthy of some popcorn. But I AM disturbed by Mav's thought that he thinks that only 5% of people on this forum trade futures? Geez, what else are they trading? Stocks, options, bonds, FX and all that? I weep for the future.

There are two large contingents on ET. Older members who are primarily investors but trade their IRA's or 401ks more or less moving stocks around. And younger users with no capital that trade spot FX with stupid leverage. If you collect some data on the daily posting patterns you will see those threads mentioning individual tickers and FX getting the most posts and views.

Even the threads on ES are basically armchair traders who just scream shit from the peanut gallery trying to pick tops in the market. Barely one of them actually has a futures account and trades their own calls.

 

[Maverick74]

Do people here generally agree with this statement? I don't think equity props even bother to separate education services from funding. I'm thinking T3 and ifundtraders as example.

I don't know what the T3 model is currently. I know they made a lot of changes to it. I got this directly from their website:

"Either you would be required to make a first loss capital contribution to begin trading or, with a profitable track record, may be considered for full funding by the firm."

I suspect most traders "don't" have a track record and therefore provide first loss capital which is the norm now for most equity props. It looks like they sell education as well but but they seem to be clear that if you trade there, you are putting up risk capital. There does not appear to be mixing of educational funds and trading funds. Am I incorrect on this?

 

[Maverick74]

Do people here generally agree with this statement? I don't think equity props even bother to separate education services from funding. I'm thinking T3 and ifundtraders as example.

OK, I found this directly from their website and I was correct. They DO separate their trading from education.

From their site:

DISCLOSURE *
T3 Trading Group, LLC is a Registered SEC Broker-Dealer & Member of the NASDAQ PHLX Stock Exchange.

T3 Live, LLC, T3 Securities, Inc and T3 Trading Group, LLC are separate, but affiliated companies through common ownership.

T3 LIVE is NOT a Broker Dealer. T3 LIVE engages trader education and training. T3 LIVE offers a number of products and services, both electronically (over the internet through T3LIVE.com) and in person.

T3 LIVE products are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decisions you make, and such decision will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.

T3 Securities, Inc., a Member FINRA NFA SIPC, will provide brokerage services for retail customer accounts in the active trader space. Customers will have access to select education and services from T3 Live, an affiliated by separate entity, and a world class back office and support team that is the backbone of the T3 experience. T3 Securities will cater to active traders, high frequency and black box traders, small to mid-sized hedge funds and family offices.

 

[traderjo]

You keep saying something that is factually incorrect. The firms you mention who are running combines or selling education are NOT the backers. This might seem trivial to you but it's not. I could create an entity called "Mav's Trading Superstore" where I sell training and then the guys that show promise, I can send to my buddy's firm, "Superstar Traders, LLC" to do the backing. They are completely different.

And second, futures trading is not mainstream, not even here on ET. LOL. I think less than 5% of the posters on this forum trade futures and the name of this site is called "Elite Traders". LOL. Go figure. So no, mom and pop are not trading them and people like me would not welcome the additional regulations and fees imposed on my trading so that a few mom and pop types can be "protected" from themselves.

"The firms you mention who are running combines or selling education are NOT the backers. "

Yes Mav true, two separate entites to perhaps save their back side ...however they are in bed with each other so to speak, (T3 Live, LLC, T3 Securities, Inc and T3 Trading Group, LLC are separate, but affiliated companies through common ownership.)
) don't know about the other 3 mentioned on this forum but lets keep that aside for a min

What about those firms who do not sell education but the business model is still "Pay for test and hope you get funded" and pay for tests again and again
Where as real top tier firms hunt for talent using own resources not relying on test revenue!

I am referring to the ethics of it not the legality.

What diff does it make at all if it is Equity or Futures?

But I guess you are soled to the idea when you say " people like me would not welcome the additional regulations " no point in disusing it further then , you think it is OK to have this business model not regulated as there is no need for any scrutiny

 

[traderjo]

And I am asking you to name names please - be specific! I am not aware of any “prop” firms selling education or making someone pay for a test in order to trade regulated futures for that firm! In fact, I’m pretty sure the exchanges and the NFA wouldn’t allow it.

Also, IMO you’re a bit misinformed about futures proprietary trading firms - they are required by exchange rules to be registered with the exchanges. They are specifically NOT allowed to risk employee (trader) funds. They are required to pay traders as employees on a W-2.

Futures exchanges are SRO’s - self regulated organizations. They have a regulatory agreement in place with the SEC and the CFTC. The NFA is an SRO. It’s not correct to say that Futures and even a Futures prop firms are not regulated. They are regulated by the Trading exchanges as part of the Commodity Futures Trading Act. In fact, every electronic order coming out of a registered futures prop firm has a unique identifier tag.

If someone is running a fraudulent futures prop firm - that would be referred by the Trading exchange and the NFA to the CFTC. In turn, the CFTC would determine if criminal charges should be filed - if so, they would refer that to the Dept. of Justice.

3 mentioned on this forum all the time! but then again you are going to say like Mav that two separate entities, one either selling education or test and one actually a Futures prop so perfectly legal I suppose
Meanwhile thousands of suckers go through burning hundreds each month hoping to get Funded! and that is perfectly legal too!
you guys are more experienced than me so on legality of it all I take your point , but how ethical all this is is a big question and many half decent people who do their due diligence can see the red flags IMHO

These following guys must be idiots who dont seem to charge anybody any test money for aspiring traders.. damn must write to their CEOs about this golden opportunity they are missing!
https://www.optiver.com/ap/en/job-opportunities
https://www.flowtraders.com/careers
https://www.tibra.com/careers/
https://propex.com.au/trainee-traders
https://www.citadel.com/careers/
https://b2tradinggroup.com/jobs/

 

[bone]

but how ethical all this is is a big question and many half decent people who do their due diligence can see the red flags IMHO

Listen, I’m not arguing with you. And I personally do not take trading account funds from clients, and I do not personally steer any of my clients towards any particular clearing firms. I take no haircuts on client work. None.

And as you mentioned, anyone who takes the time and effort to do some due diligence can see the red flags.

If you think that a trading educator is misappropriating client funds I would urge you to report that person or entity to the National Futures Association.

In fact, the first place to look is to see if a trading educator is registered with the NFA to take client funds. That’s a different thing entirely than being a registered proprietary trading firm with a regulated futures exchange.

I read on another thread earlier today here on ET that an “educator” taking client funds for a “trading account” was arrested by the FBI. He wasn’t legally registered to do so with the Regulators and he was embezzling the funds. So now he’s in the pokey.