Thank you. This is more of the information I wanted to know about. It seemed too easy to be true and obviously there is more to it. I have just seen all the fly by night firms and thought if those fools can do it then maybe it is as easy as it looks. Maybe they are just an arm of some bigger company, who knows. Thanks.
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How difficult is it to start a prop firm?
- Thread starter angerbridge
- Start date
Thank you. This is more of the information I wanted to know about. It seemed too easy to be true and obviously there is more to it. I have just seen all the fly by night firms and thought if those fools can do it then maybe it is as easy as it looks. Maybe they are just an arm of some bigger company, who knows. Thanks.
Quote from angerbridge:
Thank you. This is more of the information I wanted to know about. It seemed too easy to be true and obviously there is more to it. I have just seen all the fly by night firms and thought if those fools can do it then maybe it is as easy as it looks. Maybe they are just an arm of some bigger company, who knows. Thanks.
Yes, they are usually a sub-LLC of the firms you say you are trying to get away from. A sub-LLC is not the same thing as a prop firm. Are you a disgruntled trader or something? I ask because you mention ticket charges as being the reason you wanted to do this. Who the hell charges ticket charges anymore? Come on man, commisions now days are nothing or close to nothing. Have you ever been at a prop firm or was this just some thought that came to your head, "hey, why don't I start a prop firm". I'm just curious.
Quote from AutoMate:
Angerbridge's thoughts on starting a prop firm are like a mechanic who says to himself, hmmmmm............... I am a pretty good mechanic and know everything about cars, I think I should start my own car company. I mean seriously how tough can it be, I'll just get a few of my mechanic buddies together, throw in a couple of bucks, and we'll starting building cars out of the garage in my house.
Thanks for pointing out the exact way Lamborghini was founded. Expect he didn't even work on cars, he worked on tractors.
"A wealthy manufacturer of tractors and air conditioning and heating units systems after World War II, Lamborghini was an enthusiastic owner of sports cars, including Ferraris. He noticed that some of the clutch components were the same as the ones he used on his tractors, as well as suffering recurring reliability issues not unfamiliar to Ferraris. He approached Enzo Ferrari with his criticism. Ferrari insulted Lamborghini, effectively stating that a tractor manufacturer was not qualified to criticize Ferraris. Affronted by Ferrari's reaction, Lamborghini decided to "build better Ferraris than Ferrari" and to prove that supercars did not have to be as temperamental as Ferraris."
http://en.wikipedia.org/wiki/Ferruccio_Lamborghini
Quote from Maverick74:
Yes, they are usually a sub-LLC of the firms you say you are trying to get away from. A sub-LLC is not the same thing as a prop firm. Are you a disgruntled trader or something? I ask because you mention ticket charges as being the reason you wanted to do this. Who the hell charges ticket charges anymore? Come on man, commisions now days are nothing or close to nothing. Have you ever been at a prop firm or was this just some thought that came to your head, "hey, why don't I start a prop firm". I'm just curious.
No I am not disgruntled, I like my prop firm. Just wanted to find out how hard it would be to start one since so many are always popping up.
Quote from angerbridge:
Thanks for pointing out the exact way Lamborghini was founded. Expect he didn't even work on cars, he worked on tractors.
"A wealthy manufacturer of tractors and air conditioning and heating units systems after World War II, Lamborghini was an enthusiastic owner of sports cars, including Ferraris. He noticed that some of the clutch components were the same as the ones he used on his tractors, as well as suffering recurring reliability issues not unfamiliar to Ferraris. He approached Enzo Ferrari with his criticism. Ferrari insulted Lamborghini, effectively stating that a tractor manufacturer was not qualified to criticize Ferraris. Affronted by Ferrari's reaction, Lamborghini decided to "build better Ferraris than Ferrari" and to prove that supercars did not have to be as temperamental as Ferraris."
http://en.wikipedia.org/wiki/Ferruccio_Lamborghini
LOL, nice! I would only respond by pointing out two important points; Mr. Lamborghini was both "wealthy", and already a "manufacturer". These two factors meant that he had both experience in the world of manufacturing, and the money he needed to approach it in whatever manner he chose. I dare say if he had neither money , nor experience (and existing infrastructure) in manufacturing complex machines, that we would never have heard of Lamborghini.
My guess Anger is that you are trying to improve your financial situation by getting a 'cheaper, better payout' trading scenario in the 'near future'. Not taking something that is a hobby and turning it into a world class , world recognized brand. I am sure Mr. Lamborghini spent a shit load of time and money before he got anywhere, nevermind the level or prestige that Lamborghini has today. This was probably fine with him since he already had made his fortune and had a good paying day job building tractors.
Who knows, maybe in 20 or 30 years you'll have a world renowned prop firm, good luck my friend!
Quote from AutoMate:
LOL, nice! I would only respond by pointing out two important points; Mr. Lamborghini was both "wealthy", and already a "manufacturer". These two factors meant that he had both experience in the world of manufacturing, and the money he needed to approach it in whatever manner he chose. I dare say if he had neither money , nor experience (and existing infrastructure) in manufacturing complex machines, that we would never have heard of Lamborghini.
My guess Anger is that you are trying to improve your financial situation by getting a 'cheaper, better payout' trading scenario in the 'near future'. Not taking something that is a hobby and turning it into a world class , world recognized brand. I am sure Mr. Lamborghini spent a shit load of time and money before he got anywhere, nevermind the level or prestige that Lamborghini has today. This was probably fine with him since he already had made his fortune and had a good paying day job building tractors.
Who knows, maybe in 20 or 30 years you'll have a world renowned prop firm, good luck my friend!
You are probably right that without wealth and an existing infrastructure in manufacturing Lambo would not be around. Anyways, I understand the point of your original comment.
The point of the thread was to find out why traders hadn't banded together to create their own prop firm more often. Also to see if the prop firm is just an unnecessary middle man. I have worked at a few prop firms and am very happy with the one I have now. But I ask for very little from them and from the surface it seems simple.
it is not hard to start a branch of a prop firm. There is why there is so many swifttrade branch in China. But if u want to built another swifttrade or title trading. I think it is not easy. Can anyone explain me the things u need to do to establish a new
prop firm or how can i find those information? thanks
prop firm or how can i find those information? thanks
(Smiling at some of the replies, LOL).
OK, I have gone through this a few times on the board, but here is the basic route to starting a Firm.
1. Buy a seat on an exchange, or, if nothing else, join the NASD as a broker dealer.
2. Find a good clearing firm to clear your trades. Capital contribution varies from firm to firm, I think Goldman has a minimum of $10mil or so (others are probably a lot lower).
3. Find a really (really) good Compliance Officer to help you through the regulatory hurdles.
4. Come up with a good method of risk control to protect your money, and to protect the traders from themselves.
5. Find a group that makes good money, and hopefully they will provide "value added" to attract new traders and traders from other firms. Notice I said "attract" not "recruit" - not a good idea.
A little history....after a couple of our mangagers started Van Buren Securties a few years back, followed by my trader(s) starting Echo trade (which merged with Van Buren, and then became part of Pax Clearing, and ultimately Merrill Lynch), my brother and I decided that it was not a good idea to "create competition" from within. (Nothing wrong with competition, however).....Better to "reward initiative" by setting up ways for highly energized traders to "run a company within our company" - with incentives for doing so. This has worked quite well for us and the traders (PairCo, affiliates, BTM and DFG groups, S &S Trading, etc.). We look forward to assisting others in this arena.
All the best,
Don
OK, I have gone through this a few times on the board, but here is the basic route to starting a Firm.
1. Buy a seat on an exchange, or, if nothing else, join the NASD as a broker dealer.
2. Find a good clearing firm to clear your trades. Capital contribution varies from firm to firm, I think Goldman has a minimum of $10mil or so (others are probably a lot lower).
3. Find a really (really) good Compliance Officer to help you through the regulatory hurdles.
4. Come up with a good method of risk control to protect your money, and to protect the traders from themselves.
5. Find a group that makes good money, and hopefully they will provide "value added" to attract new traders and traders from other firms. Notice I said "attract" not "recruit" - not a good idea.
A little history....after a couple of our mangagers started Van Buren Securties a few years back, followed by my trader(s) starting Echo trade (which merged with Van Buren, and then became part of Pax Clearing, and ultimately Merrill Lynch), my brother and I decided that it was not a good idea to "create competition" from within. (Nothing wrong with competition, however).....Better to "reward initiative" by setting up ways for highly energized traders to "run a company within our company" - with incentives for doing so. This has worked quite well for us and the traders (PairCo, affiliates, BTM and DFG groups, S &S Trading, etc.). We look forward to assisting others in this arena.
All the best,
Don
the only way to run your own firm is to do ...actually do all the things don said ...
and then grow the firm to a huge size so you can benefit from its scale
just remember it can take 5 or 10 years to build a firm and only 15 minutes to destroy one..
and then grow the firm to a huge size so you can benefit from its scale
just remember it can take 5 or 10 years to build a firm and only 15 minutes to destroy one..
Quote from Don Bright:
(Smiling at some of the replies, LOL).
OK, I have gone through this a few times on the board, but here is the basic route to starting a Firm.
1. Buy a seat on an exchange, or, if nothing else, join the NASD as a broker dealer.
2. Find a good clearing firm to clear your trades. Capital contribution varies from firm to firm, I think Goldman has a minimum of $10mil or so (others are probably a lot lower).
3. Find a really (really) good Compliance Officer to help you through the regulatory hurdles.
4. Come up with a good method of risk control to protect your money, and to protect the traders from themselves.
5. Find a group that makes good money, and hopefully they will provide "value added" to attract new traders and traders from other firms. Notice I said "attract" not "recruit" - not a good idea.
A little history....after a couple of our mangagers started Van Buren Securties a few years back, followed by my trader(s) starting Echo trade (which merged with Van Buren, and then became part of Pax Clearing, and ultimately Merrill Lynch), my brother and I decided that it was not a good idea to "create competition" from within. (Nothing wrong with competition, however).....Better to "reward initiative" by setting up ways for highly energized traders to "run a company within our company" - with incentives for doing so. This has worked quite well for us and the traders (PairCo, affiliates, BTM and DFG groups, S &S Trading, etc.). We look forward to assisting others in this arena.
All the best,
Don
Thanks for the reply Don. Obviously starting a prop from scratch is very capital intensive. All the little new props must just be offshoots of other companies like you and Maverick were talking about. Not a bad idea allowing traders to create different arms of the company while keeping the Bright Bros on top. Many prop firms just groom (or in most cases the trader figures it out on their own) traders and then the trader leaves for someone else once he has become successful. But you seem to have a great idea to keep the good ones in the company by helping them start "their own" company, impressive.