Quote from Mom0/pH0x:
ok, first of all, the guys i know were mostly IR futs traders, and the lowest any of them were offered was still over double what even the lowest volume trader was getting where we came from... i admittedly know nothing about options rates and wont pretend to but the fact that he says guys from prop firms come to him to get better rates is simply inane, i dont know of any REAL prop firm that charges what he does- jump, kingstree, altea(when they were around), geneva, refco, tradelink...you name it- they all have better rates ... his rates are better than IB but are a far cry IMO from professional rates... to reiterate, this is in regard to futs, not options or equities... also, he has definitively claimed to run a prop firm.... yet he doesn't run a prop firm, he runs a brokerage, theres a huge difference, and i'll humor you with specifics, although im sure you know what im about to say... brokers require risk money in order for you to trade -prop firms, by definition, do not... that's why we call it PROPRIETARY trading, you are trading proprietary funds.... mav's clients (according to him, and my friends who have spoken with him) must put up their own capital thus rendering mav a broker... i'm not broker bashing here, i have no intrinsic disdain for brokerage firms, but let's call them what they are... that's the theoretical foundation of my point here, i feel like it's a bit misrepresentative to call such a firm a prop firm, that's all my point is and ever has been regarding this issue, i don't hate mav, and i don't hate brokerage houses, i just think it's better (for the industry) to call it what it is...
OK, I'm going to have to defend myself again here against these complete inaccuracies. Although, I'll keep the ad hominem out of it. First of all, 80% of our business is options and equities (mostly related to hedging of options, not straight up equity trading). The other 20% is futures.
Second, your friends that called got a high rate on purpose. Our firm started a policy about two years ago to discourage rate shoppers. These were people who would call us up, say they traded 20k cars a month, then we would give them .10 a side or .05 a side and they would end up trading 430 contracts for the month.
So this is what we did. We tell every trader we give them a standard rate. We don't care how much they tell us they trade. It might be 100k cars a month, it might be 10. Everyone gets the SAME rate. After two months, if they do the volume they say will do, we will give them the lowest rate and rebate them the difference. Or futures rates were as low as .05 a side Momo. I hardly would call that a ripoff.
I have to admit, before we engaged in this new policy I got taken in a by a guy that said he was heavy hitter. He knows who he is. We didn't give me a .05 but we gave him like a .35 a side rate. He said he was going to trade 5k to 10k cars a month, thats not a lot, but not a newbie. The guy ended up trading 100 to 200 contracts a month. His excuse was he was struggling and wanted to cut back his size. Whatever. Anyway, I wanted to clear the air on this because momo is making a gross exaggeration here.
Now, on to the prop side. Look Momo, our firm started off fully backing traders. EVERY trader. We backed market makers on the floor of the PCX. As guys started coming off the floor we started backing them upstairs. The problem was, guys did not have the same edge off the floor as they had on the floor. So instead, what we did is allow guys to trade off the floor, with the same haircuts, same tax advantages as they had on the floor but they put up their capital. This worked very well.
We eventually opened this up to traders outside the floor environment and eventually moved into other markets, like equities, futures, commodities, FX. For the record Momo, we do back traders, full backed traders. Are they customers? How can they be? We have remote makers, a big part of our business now that are backed by firm capital. The reason is because they have an EDGE!!!!!! It was the same reason why we backed guys on the floor of the PCX.
We also have backed SELECT futures traders and options traders. The key word being SELECT. More importantly, we have helped dozens of traders actually raise capital where they are trading millions of dollars, not their money. So we have a hybrid model of fully backed traders and traders who use leverage. Just like REFCO! Refco has a customer business, or had I should say, as well as a prop business. We are no different.
I tell every trader I talk to, if they come into our firm and put numbers on their sheets, the firm can back them. The problem is very few guys can demonstrate they have a useful EDGE! Do you really think our firm is going to back a futures trader that uses RSI or MACD to trade spoos or bonds? Come on.
Anyway, I just though I would clear this up Momo. I hate doing this shit because it comes off as blatant advertising for my firm and I'm sure Magna and Baron have been uncomfortably patient with this thread. It's not my intent to advertise here but I had to clear the air on this. When someone comes on here and completely distorts what our firm does, I feel have the right to defend our firm.
If Magna or Baron delete this post or this thread, that is fine. I hope you read it before it gets deleted Momo because you know nothing about our firm. This is what really annoys me about this website and the people on here. It's like a high school girl's locker room. You make a few phone calls, talk to someone for a few seconds on the phone and you presume to know everything about that firm. That is very irresponsible.
I have told everyone on this site that I will meet anybody in my office or talk to anyone on the phone if they have questions about what we do. I don't hide from anyone and I will bet a dime to a dollar that I'm the most honest, straightforward guy on this site. I call a spade a spade everytime, 7 days a week, twice on sunday.
What annoys me, is when people are too scared to call me or meet in person but instead come on this message board and just spread bullshit because it empowers them. Whatever floats your boat. I said what I wanted to say. I think we are done here.
or was that just me...