PDT Rule & Prop Firms

Quote from noisebasement:

If taking a 7 i would highly recommend echotrade vs. other shops. Echo is so straightforward , they dont bs advertise on forums, they seem to be very transparent. They use sterling and support is great. A friend i been trading with for quite some time used to be with Bright a while back and i must say he wasn't too happy. I wont say much here. But rule of thumb look for a shop that will treat you fairly. A firm that wont take back your profits because he violated a BP rule. And when asked to close account and get his profits out, didn't receive it. Also look for fair interest rates for taking overnight. Look for low rates of course echo gives out very fair rates v s. other firms.
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We have never taken profits for violating a BP rule. Possibly on a violation of short sale rules, but rarely.

My friends at Echo are good people (Hi Jeff, Hi Rob), and they built a good business based on our business model that Jeff enjoyed for several years. In fact, if it wasn't for echo traders, I would never have gotten on ET to begin with. They had some over-zealous types saying all sorts of libelous stuff about our Firm and family, so I simply responded to clear things up. I spoke to Jeff, and he corrected the situation.

My guys who came here from Echo say that things changed quite a bit when they were taken over by Pax and then Merrill Lynch, but I still think echo is managed by the same people, and a good firm.

FWIW,

Don
 
Quote from ratboy88:

see!!! the 7 was not required till 2000/2001. so what law changed? let me tell you.. there was no new legislation. so what got into the SEC to interfere in our INDUSTRY so drastically?

go read the summary... sect 10,15 of the sec act of 34. WHICH HAS NOTHING TO DO WITH TRADING!!!!
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Here's the basic story behind the licensing requirements.

Back in around 1999 when Mark Barton shot all those traders in a retail trading room owned by my old pal, Harvey Houtkin (AllTech), the SEC and the Senate did a pretty thorough investigation into "daytrading" in general. The non-exchange members were the primary targets, but even those that had been members for decades were sort of lumped in the same group.

At one point, they were considering re-classifying our traders (and those at other legitimate firms) as "customers" - this would, of course, have ruined the livelihood for several hundred families. We, and others, lobbied very hard to keep our "exchange member" status and benefits for our traders, and the Regulators came back with a "professional vs. retail" distinction, and they came up with licensing to make that distinction.

We were relieved, since we thought they might come up with something really difficult to deal with, and we all took the exams.

That's basically the deal as I recall the events.

All the best,

Don
 
Quote from Don Bright:

Here's the basic story behind the licensing requirements.

Back in around 1999 when Mark Barton shot all those traders in a retail trading room owned by my old pal, Harvey Houtkin (AllTech), the SEC and the Senate did a pretty thorough investigation into "daytrading" in general. The non-exchange members were the primary targets, but even those that had been members for decades were sort of lumped in the same group.


Don
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only problem with this explanation is that the 7 was required right before the atlanta shootings.

regardless, the shootings should have had zero effect on the industry.


tell me this Don.. the SEC claimed that Tuco "induced" traders to generate excessive commissions.. please admit that is a farce.

i know, i know.... your compliance officer won't let you. LOL

that's OK Don... Bright is a credit to this board and the industry. we all benefit from the sound business you and your brother run. keep up the great work.
 
Quote from ratboy88:

only problem with this explanation is that the 7 was required right before the atlanta shootings.

regardless, the shootings should have had zero effect on the industry.


tell me this Don.. the SEC claimed that Tuco "induced" traders to generate excessive commissions.. please admit that is a farce.

i know, i know.... your compliance officer won't let you. LOL

that's OK Don... Bright is a credit to this board and the industry. we all benefit from the sound business you and your brother run. keep up the great work.
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Thanks, I appreciate it. My compliance says 1999 for the requirement, and that you're right, there was already some "stuff" going on at other retail shops I guess.

Don
 
Quote from ratboy88:

the SEC claimed that Tuco "induced" traders to generate excessive commissions.. please admit that is a farce.
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I worked there for a short while and they never did anything that induced me to trade more.

That's nonsense !
 
Quote from Joab:

I worked there for a short while and they never did anything that induced me to trade more.

That's nonsense !
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Are you sure now? Did you ever ACTUALLY test their free coffee?


JK - LOL! :D
 
Any one here heard of cornerstone? I see this ad all the time on elite trader. The ad says trade futures for $0.10 and trade stocks for $0.002 every trade.

Would be keen to find out more about this cornerstone prop trading
 
Correct me if I am wrong but what is the point of obtaining your series 7 license if you are looking to become an equity trader. Weather you decide to get your series 7 or not you are only getting 4:1 intraday and 2:1 overnight leverage if I am correct.

How does the series 7 benefit you besides working for a Equity Trading firm that is a B/D. It seems either way you will have to fund your trading account with the minimum requirement of 25k.

If this is the case I am not going to study for my 7 and just fund my trading account with 25k.

Just by the guidelines of something like this if I am reading correctly how would any equity trading firm even stay in business if this goes through...??? insane
 
i asked about a thousand questions regarding the "impending" sec mandate. it seems that a licensed firm can offer 20-1 leverage to licensed traders because they are now actually "registered members" of the exchange. this is an entirely different classification from a customer relationship.
feel free to chime in if i am off base on this.
you can join a hedge fund and not be licensed and trade equities through the hedgefund. that said,it would be hard to get into a hedge fund.
 
Getting the Series 7 license is mostly about LEVERAGE in my book; other than the regulatory protection afforded to licensed traders I dont see any other reason to get one. You could fund a retail account with the required 25K but then you are limited to a maximum of 4 to 1 buying power.

In a prop firm that same 25K will get you 20 -1 or more. I hear some equity traders get as much as 50-1. Not that one would need that much leverage because its pretty dangerous in the wrong hands but its nice to know that you can capitalize on a prime trading opportunity if one should unexpectedly arise. If you have a trading strategy thats scaleable...leverage can be a very beautiful thing.
 
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