Prop Firm Ownership

N

nycderivtrader

All,

Anyone able to provide data?

I am wondering what kind of capital an equity prop shop typically (if there IS a typical) would start with. I am doing this to see what kind of value is derived for the owner him/herself. He/she will collect rebates on volume, and a cut on profit.

There is a shop I have been in contact with that will teach and provide the capital, starting with 100 shares and moving up to 1k share lots and I want to try and get a feel for what is being put down for the traders and the sought after recruits. In the future I may be able to finance my own trading, however, I want to try and see what the advantages are to going to a shop, other than the advice and training.

NYCDT
 
Quote from nycderivtrader:

All,

Anyone able to provide data?

I am wondering what kind of capital an equity prop shop typically (if there IS a typical) would start with. I am doing this to see what kind of value is derived for the owner him/herself. He/she will collect rebates on volume, and a cut on profit.

There is a shop I have been in contact with that will teach and provide the capital, starting with 100 shares and moving up to 1k share lots and I want to try and get a feel for what is being put down for the traders and the sought after recruits. In the future I may be able to finance my own trading, however, I want to try and see what the advantages are to going to a shop, other than the advice and training.

NYCDT
More...

This has been discussed quite a bit, and I've offered the basic steps to start a firm, but here's a quick review. Buy an exchange membership (prices vary). Find a quality Clearing Firm, some will likely let you start with as litttle as $5million, Goldman wants substantially more. Hire a great Compliance Officer (Hi Diane, LOL)....start filing all those FOCUS reports, get a good accountant to prepare statements.

Much like any other business other than the regulatory requirements.

Don
 
it sounds like a huge investment, with many headaches, maybe just growing as a individual trader is the best option for most traders i would guess. not worth all the stress & financial risk. imo
 
I think he/she was looking for details on starting a prop ala popular format (i.e. anvil/genesis/lightspeed groups) not the PROPER way that Don mentions.

In that case you need about 250k to start and an office and a telephone.
 
Quote from scorpion:

it sounds like a huge investment, with many headaches, maybe just growing as a individual trader is the best option for most traders i would guess. not worth all the stress & financial risk. imo
More...

We actually helped create 2 of our "competitors" back in the 1990's - and we thought that was not too smart, LOL. So, we eventually set up an Affiliate program where traders can set up a business within our structure...therefore traders with that good old entrepreneurial spirit can bring on traders, build their own business.

Don
 
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