How much would it cost to open a Prop Firm Office (ie. Bright Trading Affiliate)
- Thread starter CoolTraderDude
- Start date
Don, do you still have the office in boston, mass?
I once owned and ran an office.
I started as a soes trader... went over to Bright and then started an office with two others.
Its all about having profitable volume traders.
You probably need a lead trader to show people that it can be done.
It would be nice if you could show people how to do it.
While I was profitable I had a business which was nicely profitable.
As my edge faded the volume and profits went down in the office as well. Then one friday, while I was out, a trader took home a position against guidelines.
It cost me about 8 grand and I decided the office was no longer worth the risk.
Note if you are a profitable trader who trades volume or if you thought Don could show you how to be a nicely profitable daytrader... I would start an office no problem. If you are making money, some of your traders will make money.
For that matter Don, if you could make me a profitable daytrader again, let me know... I already have an office and a fast data connection.
I started as a soes trader... went over to Bright and then started an office with two others.
Its all about having profitable volume traders.
You probably need a lead trader to show people that it can be done.
It would be nice if you could show people how to do it.
While I was profitable I had a business which was nicely profitable.
As my edge faded the volume and profits went down in the office as well. Then one friday, while I was out, a trader took home a position against guidelines.
It cost me about 8 grand and I decided the office was no longer worth the risk.
Note if you are a profitable trader who trades volume or if you thought Don could show you how to be a nicely profitable daytrader... I would start an office no problem. If you are making money, some of your traders will make money.
For that matter Don, if you could make me a profitable daytrader again, let me know... I already have an office and a fast data connection.
Hi jemâ¦!
Iâm a lot like you⦠former profitable prop trader looking into details about an office⦠I never bothered to ask my office manager about the details of running an office because I thought that might look oddâ¦!
So open questions to anyone who might want to answerâ¦
What is a reasonable risk deposit with the parent company� (meaning how much capital do I put up as gambling money with the firm⦠lows vs. highs)
What is a reasonable commissions split between the parent company and the office?
What is a reasonable trading profit/loss split (in percentages) between the parent company and the office� (how much do I get as profit, how much do I eat as a loss)
Should the parent company invest in the office itself or are fixed costs (ie⦠computers, desks etcâ¦) to be covered entirely by the person opening the officeâ¦?
Again⦠No need for any specific details like what firm you did business with etc⦠If you guys can just be honest and let me know from your experience that would be great!
Hi Donâ¦!
Just looking to get some basic information from office operators in order to better form an opinion/âbaselineââ¦!
from reading this thread it sound like you (the OP) are undercapitalized. You should put together a solid business plan to attract traders in this difficult environment and seek a partner to front some cash. Others have already pointed out that operators are getting out of the business....something to consider?
Nope... Not undercapitalized..., just really cheap and stingy with my money...!
But you don't answer any of my questions... I'm looking for a way to figure out what a good deal looks like... in this environment.
So yeah... people getting out of this business is a good point... I retired from trading once I burned out and my edge was gone. Had a really good run at it though... Took some time off and now I'm seeing some really good strategies that work... Thinking maybe I should get back in... But I'd rather manage and let others deal with the stress of trading. In my last year trading I was pretty much an alcoholic... Took me a while to quit that and turn things around.
There is no money in running an office. Zero. If anything, it will cost you money to keep it open.
So the answer I'd be looking for would look something like this...
1. 100 k (or whatever) deposit with the firm on your part and traders have to fund their accounts...
2. 50/50 profit split between you and H.O. and 50/50 loss split after you settle with the trader...
3. You cover all of the office costs...
4. You get to keep all of the desk fees...
5. 50/50 split on commissions...
Something like that... Is this reasonable...? Are there better deals out there...? ...etc... Some examples from people with experience would be nice...
1. 100 k (or whatever) deposit with the firm on your part and traders have to fund their accounts...
2. 50/50 profit split between you and H.O. and 50/50 loss split after you settle with the trader...
3. You cover all of the office costs...
4. You get to keep all of the desk fees...
5. 50/50 split on commissions...
Something like that... Is this reasonable...? Are there better deals out there...? ...etc... Some examples from people with experience would be nice...
Really,...?
Has it gotten that bad these days...?
What's to blame...?
I know the "penny" game / rebate thing is dead in the water... But some of these moves are pretty awesome... Are you saying no one's making money off of them...?
No, no, no. LOL. Look, let me walk you through this. No firm outside outside of Mongolia is going to split commish with you 50%. Here is how it's going to work. Whatever the firm nets on commish, that is net, not gross, they might give you anywhere from 10% to 30%. So say Echo's cost on shares is 10 bips and they charge the trader 30 bips, that's a 20 bip spread. They might give you say 20% of that 20 bips or 4 bips. That's 40 cents for every 1k shares your traders trade!
They will also make you cover all the overhead which includes putting your name on along term lease (12 months). You will pay for all the equipment, connectivity, etc. If all your traders bail or blow out, you are on the hook for 12 months of over head.
Now, on to trading activity. Nobody is trading. NOBODY! There is no volume. You'll get 5 people to come into an office and trade 5k to 10k shares a day. Dude, you'll make $5 to $10 a day on these guys and you will own all their risk. Plus you will deal with all their headaches. This doesn't work, that doesn't work, my sheets are wrong, that's not my position, etc.
The only hope you have of making any money is if you can try backing some traders who can actually make some money. That's a 10 to 1 long shot.
Good luck bud. I honestly think you would make more money starting an Amway franchise.