How do prop firms operate?

M

matador04

So I have cash and instead of opening a retail account at IB or ThinkorSwim, I hand it over to BrightTrading LLC and they loan me $1m...

I'm kinda clueless so please help me understand the business of Prop Trading. Am I an employee, an indy, client?
 
can you also please explain the difference in terms of operation between prop shops
and non prop shops which operate in a somewhat similar manner.
 
what do you mean by "difference in terms of operation" exactly?

in a true prop trading set up, the trader gets paid a salary, a small cut of the profits, and assumes no risk. proprietary trading setups as we all know them (see Echo, Bright, etc) are nothing more than disguised retail accounts with a bonus: leverage.
 
Since options aren't margineable to retail guys, are there prop shops that will let you trade options? And if so, can you hold your positions indefinitely?

thanks
 
Quote from matador04:

Since options aren't margineable to retail guys, are there prop shops that will let you trade options? And if so, can you hold your positions indefinitely?

thanks
More...

Yes.
 
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