Just a little clarification concerning the term leverage: a firm that has traders trading money put up by the owners, i.e. no risk deposits, does not give leverage - that was a wrong choice of words - leverage is a multiplier for your deposit. The private "hedge fund" gives individual traders buying power which is margined against the main account. The firm deposit account gets Reg T leverage of 4-1 intraday or possibly more if Portfolio Margining is used (not always more but can get up to 6-1 depending on the account portfolio) because they are not a b/d. There are other ways a firm can get higher leverage on their funds thru prime broker accounts, but that starts getting a little complicated.
keystone trading group
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bstay, I'm not ripping you apart, I'm simply stating that you need to do more research about these places. A training fee should pay for the course and that is all. A prop firm is one where the trader puts down no money, pays the same commission rate as the firm and the firm only makes money when the trader does.
Once again, all this is is a masked risk deposit with a training course.
You said it yourself, the training fee is handled according to the terms of the contract. The fact that taking a training course is mandatory in order to trade for the firm should say it all. And if you pass this course then why are you later required to take it again if you lose a certain amount of money.
A true training course should be like an SAT course, you pay the money and that's it. You learn what they're teaching and then practice on your own time. The way this is set up is that in order to take the actual SAT test you must take class on it first. The fact that the course and joining the firm are tied together defeats the entire idea of it just being educational.
And again I will ask you, what percentage of the guys are newbies, I would guess probably atleast 90%. So I ask you, aside from actually having a risk deposit show up in your account, what is the difference b/w a place that requires a risk deposit to trade and the mgmt helps you out in learning and a place that requires a learning deposit and mgmt helps you out with learning. Both situations require money up, teach you the basics and require more money if you burn thru your upfront money, just different names for the same things. Except in your case you give away 50% of the little you make and with a risk deposit you standardly keep your full profit and the firm only makes commissions off of you. I'm not sure how you see a difference in what you're doing and a risk deposit, but i guarantee you that in your contract there's some way of phrasing that if you go thru your learning deposit you have to put more up.
Once again, all this is is a masked risk deposit with a training course.
You said it yourself, the training fee is handled according to the terms of the contract. The fact that taking a training course is mandatory in order to trade for the firm should say it all. And if you pass this course then why are you later required to take it again if you lose a certain amount of money.
A true training course should be like an SAT course, you pay the money and that's it. You learn what they're teaching and then practice on your own time. The way this is set up is that in order to take the actual SAT test you must take class on it first. The fact that the course and joining the firm are tied together defeats the entire idea of it just being educational.
And again I will ask you, what percentage of the guys are newbies, I would guess probably atleast 90%. So I ask you, aside from actually having a risk deposit show up in your account, what is the difference b/w a place that requires a risk deposit to trade and the mgmt helps you out in learning and a place that requires a learning deposit and mgmt helps you out with learning. Both situations require money up, teach you the basics and require more money if you burn thru your upfront money, just different names for the same things. Except in your case you give away 50% of the little you make and with a risk deposit you standardly keep your full profit and the firm only makes commissions off of you. I'm not sure how you see a difference in what you're doing and a risk deposit, but i guarantee you that in your contract there's some way of phrasing that if you go thru your learning deposit you have to put more up.
They are not a broker dealer. They can't accept risk deposit or the Sec would come down on them. (read the Tuco case).
In any case, taking a enormous traing fee works out better for them. Training fee is theirs to keep no matter what happens.
Risk deposit remains yours unless you lose it. With a training fee, you start with 5k gone gone gone. Good luck to making it back....