Ok Guys-here's The Deal With Prop

Yes it can very well happend that the pikers at the SEC say "everyone has to have a minimum of 25K in order to trade more than 3 trades per day." Newsflash: they already did and the Prop Shops found a way around it and now the SEC is recracking down on them after tuco. I won'y be surprised if this is where it's headed.

If you have 25K minimum in your account then you may as well be retail and have SIPC insurance. But I'm not sure if IB gives you more than 2:1 leverage (they may go 4:1 but not sure).
 
Quote from piranahfishy:

Yes it can very well happend that the pikers at the SEC say "everyone has to have a minimum of 25K in order to trade more than 3 trades per day." Newsflash: they already did and the Prop Shops found a way around it and now the SEC is recracking down on them after tuco. I won'y be surprised if this is where it's headed.

If you have 25K minimum in your account then you may as well be retail and have SIPC insurance. But I'm not sure if IB gives you more than 2:1 leverage (they may go 4:1 but not sure).
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Realistically you need 30k to daytrade. That 25k figure is the threshold that separates day traders from regular traders, so if your account balance drops below that figure, you are already flagged. This is why Assent and Genesis require 30k to open a retail account to day trade.

As to IB, they offer 4:1 intraday and 2:1 overnight. It's on their web page.
 
Quote from trackstar:

Good to know. Guess my commissions are still pretty competitive. I'm with a small division of Hold Brothers if anyone is wondering.
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What office do you trade out of? I am sorry you have to deal with Greg, he is a crook in my eyes. Ahhhh, don't get me started. LOL
 
Well there it is this is where it seems to be going. I won't be surprised if you will need BOTH a Series 7 and 25k+ to trade at a Prop Shop eventually (you would have nice leverage).

But for sure at a retail account according to SEC rules you need 25K minimum and that guy is right really it is 30K as theoretically you go under 25K you are flagged. But if you are retail why not go to IB where you will get interest on your cash (albeit a small amount) as well as SIPC Insurance where Assent I am not sure if they offer it (they may). 4:1 leverage for the day at IB would mean you have buying power of 120K on 30k investment. Sounds good to me. I'm not with IB but the more I read on ET the more I'm inclined to go with them. Unless you trade HUGE volume (and I mean huge) you will grind out nothing but commisions, desk fees, exchange professional fees, at Assent, Bright type Prop Shops and this is before you even made a winning trade! So at IB it seems with 30K you pay less commisions, save on exchange pro fees by not having a series 7, pay no desk fees, have SIPC insurance. My accounts are currently with AMTD and Scottrade (both great but not for these purposes of tons of daytrades).
 
First, I don't know a lot about prop firms. I'm new to trading.

Second, I've gained a lot from all you experienced traders that have posted messages on Elite Trader. The information you share helps newbies like me.

Third, I've learned in life that if something seems too good to be true, eventually it's proven to be.

When I learned about prop firms I was really excited. Was I really going to get 10:1 or 20:1 buying power? Lower commissions than at a retail broker-dealer? Great customer service because whomever's org chart I was under was making money off me?

That seemed so great, but one thing puzzled me: where was the rest of my buying power coming from? As such, if everyone was getting a lot of margin, where were the resources to pay for the (inevitable) significant losses? If a $500,000 margin account had a bad day all of those losses couldn't all be recouped from my $5,000-$10,000 membership. (And if they were, how was that money going to be made back?) I have to say, I liked the upside, but the downside didn't make sense.

Now, I've read the summary of the SEC litigation of Tuco Trading, LLC. (http://www.sec.gov/litigation/litreleases/2008/lr20500.htm) I assume it's real, but I found it on the internet so it may be fake. I've also heard from a trader (that's a member of the firm) that Pacific Coast Traders, LLC is closing its prop firm doors. And, while I've heard only good things about Cy Group Trading, LLC, I can't find any unbiased information about them. In this day & age of e-business and internet presence does it strike anyone else as odd that there is no comprehensive information about LLC trading firms on their websites? Regular companies cannot put enough, yet prop firms put virtually nothing. Is it that there are things they don't want members to know?

All this to say (again, without experience,) that prop firms seem too good to be true. Too much money to trade, no insurance for my deposit/membership, and no real information. I don't know; I like the amount of money I can make today, but will it be there tomorrow?
 
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