Going pro vs staying non-pro

jay21 · May 21, 2015

Hello Elite Traders,

Why should someone be a professional trader ? They have to pay extra for quotes and be heavily regulated as oppose to stay as non-professional.

I have been trading part-time as non-pro for 8 years. Have been consistently making profits in the last 2 years. Should I go as professional ? (By taking series 56 and join a proprietary trading firm). Or should I stay as non-professional and avoid the costs ? I hope to trade for living someday.

Thank you for your kind thoughts.

dealmaker · May 21, 2015

jay21 said:
Hello Elite Traders,

Why should someone be a professional trader ? They have to pay extra for quotes and be heavily regulated as oppose to stay as non-professional.

I have been trading part-time as non-pro for 8 years. Have been consistently making profits in the last 2 years. Should I go as professional ? (By taking series 56 and join a proprietary trading firm). Or should I stay as non-professional and avoid the costs ? I hope to trade for living someday.

Thank you for your kind thoughts.

if you are not trading for a living or if your account is size-able enough why bother....

Scataphagos · May 21, 2015

"Going Pro"... only worthwhile if you can leverage your efforts with OPM (Other People's Money).

If you can raise $50 Million minimum, charge management and/or incentive fees, then by all means do it. If not, work the math. The regulatory burdens and costs of being "pro" are significant.

jay21 · May 21, 2015

Once I go pro, can I easily switch back to non-pro ? (by leaving the prop firm for example)

Scataphagos · May 21, 2015

jay21 said:
Once I go pro, can I easily switch back to non-pro ? (by leaving the prop firm for example)

Perhaps not so easily.

Data providers want you to pay pro fees if possible. You'll have to convince them you are no longer pro.... don't know how difficult that would be.... after all, many will lie about their "pro vs no/pro" status to get lower fees... and providers will try to not let that happen. It's not exactly like, they "just take your word for it" when money is involved.

syswizard · May 21, 2015

jay21 said:
by leaving the prop firm for example

Watch-out....many prop firms have lock-up clauses in their contracts that prevent you from withdrawing your original deposit and/or accrued profits....sometimes for up to one year of time !!

jay21 · May 21, 2015

syswizard said:
Watch-out....many prop firms have lock-up clauses in their contracts that prevent you from withdrawing your original deposit and/or accrued profits....sometimes for up to one year of time !!

Other than for extra buying power, why should someone going pro by joining a Prop Firm ?

ScalperJoe · May 22, 2015

jay21 said:
Once I go pro, can I easily switch back to non-pro ? (by leaving the prop firm for example)

Yes, once you get your "U5" form in the mail, you are no longer considered a "professional trader" and hence you can indeed "easily switch back to non-pro."

It doesn't matter if you have a Series 56 license, since the license would remain dormant until you either joined another prop firm, or just let it expire.

ScalperJoe · May 22, 2015

Scataphagos said:
Perhaps not so easily.

Data providers want you to pay pro fees if possible. You'll have to convince them you are no longer pro.... don't know how difficult that would be.... after all, many will lie about their "pro vs no/pro" status to get lower fees... and providers will try to not let that happen. It's not exactly like, they "just take your word for it" when money is involved.

Actually, they do take your word for it, since you have to sign a form with the exchanges indicating if you're pro or not. However, the basic criteria is if you're a registered member with an exchange. Once you leave a prop firm and obtain your "U5" in the mail, you are no longer registered, and thus no longer obligated to pay "pro fees" to the next provider you join (in the case of opening a retail account, for example).

ScalperJoe · May 22, 2015

jay21 said:
Hello Elite Traders,

Why should someone be a professional trader ? They have to pay extra for quotes and be heavily regulated as oppose to stay as non-professional.

I have been trading part-time as non-pro for 8 years. Have been consistently making profits in the last 2 years. Should I go as professional ? (By taking series 56 and join a proprietary trading firm). Or should I stay as non-professional and avoid the costs ? I hope to trade for living someday.

It depends on your capital, your strategy, and whether you are currently daytrading or holding overnight. Most Series 56 props won't allow for overnights, it's strictly intraday.