Looking for a Proprietary Firm...

[vikana]

Originally posted by dozu888
I think prop firms are blood suckers. An individual can easily put up $5k to trade 1 emini S&P, which is worth $50k right now, you get 10:1 margin right there. And commission is MUCH cheaper than flipping $50k worth of stocks.

For some people & trading styles Pro firms are a very good option. For others it's not worth it.

Re the PRO firms: you should remember that you effectively are joining an LLC. It's no different than teaming up with other people to found a company (which is something I've done). Founders will always insist that co-founders don't bail for at least while. If I were a LLC member, I would also insist that new members showed at least some commitment before taking on the risk of having them join.

I have talked to a few pro firms, and some of them truly stands out as professionally run operations. I've seen nothing in the agreements from echo and LWS that was out of the ordinary. Certainly less restective that many of the term sheets I've seen from VCs.

 

[rtharp]

One thing I must mention. The article attacks proprietary firms, which is where you trade for the firm. Professional firms are slightly different where you trade for yourself.

rtharp

 

[huby]

I'm very interested in joining a prop firm, and would like your guys' advise on something. I've been trading strictly Nasdaq stocks with IB, and doing fairly well. Not making a ton of money yet, but percentage wise I'm doing very well. I'd now like to take it to the next level with a prop firm.

I've narrowed it down to either Echo or Bright. If there were an Echo office in my city, I'd go there but there isn't. There is a Bright office about 10 min. from my home, which is quite appealing. I've spoken with the manager and Don Bright a few times and apparently there are some very good traders in this office. I know that the manager makes high six figures to low seven figures per year.

The thing I don't like about Bright is their hatred of OTC stocks and their ancient technology (and attitude). Echo is much better in this respect. Even so, obviously some peope are making a lot of money there, so it can't be all bad.

The question is, do I go with Echo (remote trading), and be able to keep doing what I'm doing, while taking advantage of the added leverage and technology? Or, would it better to take up a whole new trading style (not knowing if I'll like it or be any good at it) and deal with crappy technology in the hope that I'll learn something from some of these other guys?

I guess my biggest fear/question is how much help will I really get from these Bright managers? Obviously their own trading is going to be the most important thing to them. How interested are they in helping me make money? I'm a big believer in modeling and having a good coach/trainer. The value of a good teacher could be immeasurable. So if I really could learn from these guys and be able to trade at their level some day then it would obviously be well worth it.

I may end up just doing both. Start with Bright, and if it sucks, go to Echo. Just wondering what you would do in my shoes and if you have any advise. Thanks.

 

[Bryan Roberts]

you definitely have a tough decision to make. bright is legendary for hating nasdaq stocks. they say it is because they tend to be thin and therefore dangerous. i guess they've never traded microsoft. i know don bright tells everyone that walks through the door in vegas that if they want to make money then they have to trade NYSE.....even if they currently are making money in nasdaq he warns that it won't last. if you want to change your style and trade nyse and "pair trade" then bright would be your choice. as far as the manager goes most bright manager's are traders first and trainers a distant third. there are exceptions, what office are you looking at???? as far as nyse stocks go, i can name dozens that are more dangerous than some of the thicker otc's. having said all that, there is a huge advantage being in an office with successful trader's, but that doesn't mean they are always willing to help the newbie. also read the thread, "bright keeping trader's money" it talks about a 12 month holding period for deposits even after the trader leave's.