Help: My Offer from a Prop Firm

Y

youn7001

I was offered a proprietary trader job, and wanted to judge it by your reactions. I appreciate all of your input, and I'm hoping for a lot of responses (good and bad, whatever the case may be). Thanks in advance.

(1) $0 of my own money to start
(2) 3 days of class room training, followed by 3 months of on-the-job training; volume of shares during training is restricted to 100 shares per trade. I will not be responsible for loses. I will not be paid for gains.
(3) After 3-months of training is up, I have a maximum of 5000 shares per trade.
(4) No fees on the trades
(5) 30% payout
(6) Minimum of $5000 gross profit per month; if I fail to generate the $5000 minimum in two consecutive months, I will be fired.

I'll let you know my own thoughts later. I don't want to sway your reactions.

Thanks for your help!
 
For a complete newbie, that deal sounds good. You have zero exposure and the opportunity to learn on someone else's dime. Do you know the quality of the other traders? Is it a good environment where you can really learn something from veteran people? Have you met any of the traders? If there are good traders there who you can learn from, go for it! The payout percentage is low but zero commissions more than offsets this. You better verify the commissions, though. Most likely you'll still pay pass-thrus of some sort (ECN fees, SEC charges, bullets, etc.).
 
I am assuming you have little to no trading experience.

You have about a 5% chance of making $5k in your 4th and 5th month. Therefore you should expect to be fired. If you look at this as a free learning experience and you can support yourself with saved up funds, then go for it. Think of it as 5 months of free training, then you can go somewhere that has a better deal.

edit: goldenarm you beat me to it.
 
that sounds like the best deal I have ever heard of for a new trader. If you are a kid fresh out of school living at home you can't get better than that. That is a no lose deal. The only downside is that if you do make it, you will want a higher payout and you will probably be bound by a contract. But, that is a small price to pay to get started so you should just grin and be happy.
 
The fact the training's free and there is no capital required upfront is a big plus as it's pretty rare to find a firm that will back you 100%. It sounds a little odd that there's a share limit as opposed to a buying power limit. Are you saying you can have 5000 shares each of as many different stocks as you want or 5000 shares total in the market?

30% only is a bummer but I guess it's the price you pay to come in without capital. You'll probably tire of that real quick once you realize how much you're making for the boss each month. Did you find out how long you're locked in before you can renegotiate?

Still, for starting out, it's a chance to learn at no cost to you like goldenarm, Dustin, and mondotrader already said. If you've got good trainers, $5K won't be a problem. If the training sucks and you still haven't reached your quota, just buy 5000 BRKa and pray for an uptick. :D

:cool:
 
Definitely the Swifttrade deal. Looks like it smells like it .Good luck ! There is no question that this is a good deal for a newbie because you get exposure to the market on their dime. The risk on their part is very limited since they have very tight stop-loss parameters that they will enforce on you. Of course they need to do this to prevent you from going into a death spiral and loosing a ton of dough.

Don't fool yourself though and believe that this deal is going to make you rich. It is tough in this market, 'real' tough to make the cut. On top of that the fact that you don't get paid during "training" regardless of whether or not you are net profitable for the firm means you will be filling their pockets for awhile before you see a dime. In fact if you can't support yourself without a pay-check for four months you are going to have a hell of a tough time. Remember, your pay is always 1 month in arrears so even after you make the 5 G's and get "hired" on you have to wait a month to get paid!

Check this out before you consider signing anything with these guys. http://www.elitetrader.com/vb/showthread...p?threadid=9945. These are the guys who own the firm, you really think that they are going to set up a deal that benefits you greatly? Sorry my friend there is no free lunch... everything has a cost.

p.s. here is another thread you might want to check out http://www.elitetrader.com/vb/showt...p?threadid=9432
 
Thanks to everyone who posted for their input.

To clarify:

-yes, the firm is Swift Trade
- yes, I am responsible for pass through's. No, I don't know how much pass-throughs to expect.

*Mr. Dinly: re: 5000 share limit - Can only hold a position on one stock at a time (to a max of 5000 shares); I am not sure for how long the 30% commission is locked-in

*MACD_addy: I couldn't get your links to work on my computer. However, I did do a search on Swift Trade and found some interesting/encouraging/disturbing things about the company. The White Wash incident scares me. As does the "scalping for pennies + recieving credits" strategy. Personally, I don't mind scalping or trading for credits, but it appears that this strategy is only possible at ST where commissions are zero. Maybe I'm not understanding correctly, but I son't want to learn a strategy that is not transferrable to a Retail account.

My next job is to find out if other prop firms have the same issues.

Thanks again for helping me out. I welcome more feedback if anybody has it.
 
Originally posted by youn7001
, but I don't want to learn a strategy that is not transferrable to a Retail account.
More...

There are quite a few strategies that can't be done retail......

The question to ask is "can they be done at another prop firm with a better payout?"

Robert
 
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