And the confusion continues...buying a seat on an exchange is not the same thing as being a member of an exchange. Two completely different things. Don, any reason why you are not explaining these things to people? It would help your cause tremendously and you might even score some business out of it if you would help some of these traders out understanding this stuff. Just a suggestion...
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PDT Rule & Prop Firms
- Thread starter tito
- Start date
Quote from Maverick74:
And the confusion continues...buying a seat on an exchange is not the same thing as being a member of an exchange. Two completely different things. Don, any reason why you are not explaining these things to people? It would help your cause tremendously and you might even score some business out of it if you would help some of these traders out understanding this stuff. Just a suggestion...
Are you the gentlemen that own Maverick trading in Chicago?
hey mav, you manage a firm that has extended leverage for equity daytrading in the past. maybe you can offer a few names of firms that a trader can be part of their structure as a member of the exchange, like the cboe.. i guess your firm only offers it with a higher account balance i believe? but maybe you can share some names on here if you really want to help out? the cboe only requires registering with a u4 vs taking tests. care to share some names of firms are are connected with the cboe so traders can go trade with leverage the right way ANYONE?
Quote from Maverick74:
And the confusion continues...buying a seat on an exchange is not the same thing as being a member of an exchange. Two completely different things. Don, any reason why you are not explaining these things to people? It would help your cause tremendously and you might even score some business out of it if you would help some of these traders out understanding this stuff. Just a suggestion...
Hi Mav...I've noticed that you've been giving good solid explanations, much of which is not quite understood, and I'm not sure where the communication breakdown is.
Our business model is very similar to what my brother and I enjoyed for years on the various Trading floors. We bought seats back then, and paid annual dues as well. We placed $$ with what is now Goldman Sachs, and they allowed us to trade their "Give up" which is simply their Street name/main account. When we traded the other side simply saw (SLK back then, GS now) as whom they were trading with. GS kept track of the individual accounts. We kept our trading profits, drawing our original deposit and profits out whenever we wanted to, leaving as much or as little (above GS minimum) in the account as we liked.
All the Clearing Firm asked was that we run our trades through them, and they gave us fair pricing, so it was good business model.
We duplicated that business model in 1992, except that we bought the Exchange memberships and the traders simply pay dues. They trade our capital that we keep with the Clearing Firm. We keep adequate money to cover all the trader's needs. My Compliance tells me we are using about half of what we "can" use if necessary.
The Exchange is our "SRO" (Self Regulatory Organization). We own the membership on the Exchange. Each trader pays dues to the exchange, and complies with the basic rules put down by their Regulators. $500 is pretty cheap to be able to be involved in trading at this level, IMO. And, yes, I pay it too. Back in the day, we each had to either buy or lease a membership on the Exchange to reap the benefits our traders have.
The model is really not very complicated, but it is very highly regulated. We have a great Compliance Officer who has decades of experience. We adapt when and if necessary.
All status quo here.
All the best,
Don
Quote from scorpion:
hey mav, you manage a firm that has extended leverage for equity daytrading in the past. maybe you can offer a few names of firms that a trader can be part of their structure as a member of the exchange, like the cboe.. i guess your firm only offers it with a higher account balance i believe? but maybe you can share some names on here if you really want to help out? the cboe only requires registering with a u4 vs taking tests. care to share some names of firms are are connected with the cboe so traders can go trade with leverage the right way ANYONE?
i thought he already said the cboe was going to start charging/requiring 7's soon.
Quote from Maverick74:
And the confusion continues...buying a seat on an exchange is not the same thing as being a member of an exchange. Two completely different things. Don, any reason why you are not explaining these things to people? It would help your cause tremendously and you might even score some business out of it if you would help some of these traders out understanding this stuff. Just a suggestion...
Lighten up, Maverick.
The operative phrase in the post was "sort of" ... which is different than "just like" ...
The key points were (1) that paying the annual fee to the exchange may get the trader something may not be available to the person who doesn't pay the fee. (2) you can only pay this fee to firms that have a membership, and after passing the 7 - if that is what the exchange requires. (3) By being "attached" to the exchange via your firm, your annual fee and your (if necessary) S7, you get (or at least have been getting) the benefit of leverage beyond retail.
The "you can't trade IBM on the exchange floor" example clearly pointed out that the trader does not have any floor rights.
Your post back on 3/15/08 was very good.
Why don't you just leave it at that.
Quote from ratboy88:
and fyi ladies... no one needed the 7 to trade pre 99. just a little tidbit that seems to be neglected. 7 has almost zero to do with trading. but it sure is a nice revenue source and way to control people.
Correct, the reason for the 7 is, people back in "99 were over extended on leverage and brokers weren't able to meet margin calls, along with some other issues. Passing the 7 just ensures you have a basic understanding of the market and understand the risk involved.
Quote from nyxtrader:
Correct, the reason for the 7 is, people back in "99 were over extended on leverage and brokers weren't able to meet margin calls, along with some other issues. Passing the 7 just ensures you have a basic understanding of the market and understand the risk involved.
LOL