how to start a prop firm

T

traderefe

In a previous thread I asked about real, honest, secure, legal prop firms in Canada, since most are shady fronts set up to steal your security deposit or disappear overnight with your money after a couple of months, and didn't get any viable suggestions. So I guess none exist.

My next option is to open my own prop firm here in Canada just to trade for myself and try and grow it with other traders in an honest way.

My interest is to benefit from the rebates and low cost per shares executed, to be able to day trade.

Does anyone out there know how to go about it? Can’t be that complicated since they pop up and disappear constantly. I live in Montreal and seen more than 10 props come and go in the past 5 years.

My main concerns are:

How much investment is necessary?

Who do you contact to be the clearing firm?

Is there any volume conditions associated with this set up?

Do I need a firm or can do it as an individual?

Is there a link or contact to help with this process?

Any help and advice pointing me in the right direction will be welcome and appreciated.

I'm tired of contacting all these trading firms that advertise they need new traders and NEVER reply to your inquiries.

I love trading but to do it through a discount broker is too expensive. The cost per trade to high and no rebates credited. Barriers to entry into established companies to high, since they only admit experienced traders with track records or new young graduates. I’m already beyond that and don’t have a track record.
 
You have been on this forum since 2012. You haven't figured out that you should be talking to either:

Maverick74 - for consulting ( You better offer him some money. The guy is worth it.)
Don Bright - to setup a branch
a Primer Broker for all the possible connects - +1 for Bob Morse, our benevolent sponsor

There are only so many players in this game. Is everyone on ET a vendor lackey trying to generate conversation?
 
xandman said:
There are only so many players in this game. Is everyone on ET a vendor lackey trying to generate conversation?
More...

Seems to me 30-40% vendors, 40% wannabe, 15% NAV choppers or waiting to blow, 5% genuine.
 
traderefe said:
In a previous thread I asked about real, honest, secure, legal prop firms in Canada, since most are shady fronts set up to steal your security deposit or disappear overnight with your money after a couple of months, and didn't get any viable suggestions. So I guess none exist.

My next option is to open my own prop firm here in Canada just to trade for myself and try and grow it with other traders in an honest way.

My interest is to benefit from the rebates and low cost per shares executed, to be able to day trade.

Does anyone out there know how to go about it? Can’t be that complicated since they pop up and disappear constantly. I live in Montreal and seen more than 10 props come and go in the past 5 years.

My main concerns are:

How much investment is necessary?

Who do you contact to be the clearing firm?

Is there any volume conditions associated with this set up?

Do I need a firm or can do it as an individual?

Is there a link or contact to help with this process?

Any help and advice pointing me in the right direction will be welcome and appreciated.

I'm tired of contacting all these trading firms that advertise they need new traders and NEVER reply to your inquiries.

I love trading but to do it through a discount broker is too expensive. The cost per trade to high and no rebates credited. Barriers to entry into established companies to high, since they only admit experienced traders with track records or new young graduates. I’m already beyond that and don’t have a track record.
More...

I can't help because I know nothing about Canadian regulatory laws.

I can tell you that since most broker dealers are getting out of the business of prop that you are looking to get into, it will be challenging with no experience. In the U.S. You need to create a BD with the SEC. Align with a SRO, then find a clearing firm willing to enter into a JBO relationship. Before you start, you will have to meet certain regulatory hurdles and have more than $1m in net capital.

I would not recommend this path to start a trading operation for equites.
 
If you contact Mike Bellafiore of SMB capital he would be able to help if willing.
He knows about the start up pitfalls, hurdles and cost associated.
Twitter@MikeBellafiore

"I love trading but to do it through a discount broker is too expensive. The cost per trade to high and no rebates credited. Barriers to entry into established companies to high, since they only admit experienced traders with track records or new young graduates. I’m already beyond that and don’t have a track record."

What do you mean you don't have a track record ?
Anyone that has started a prop firm has worked for several prop firms might I suggest you do that first.
All the best
 
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