Prop Shops

[speedy]

Quote from nitro:


OK.

So you are saying that if I go with this retail firm like Broadway or Assent, etc, that they would let me trade with 25K and give me 10:1 or 20:1 buying power!!!!!!???? Are they SIPC?

There has to be a CATCH, otherwise, why would these firms canibalize their own prop/prof side by offering a retail arm?

nitro

nitro,

you keep missing the point. the reason to GO to a prop firm is to use their buying power. got that? that's where the 10:1 and 25:1 come into play. ok, now for the second point, you do NOT need to be a prop trader to get news, tech support, training and other services that you listed. you can get all that trading retail at a daytrading shop.

 

[nitro]

Quote from Mr Subliminal:

nitro, there must be a misunderstanding here. Retail at Broadway (and I presume all the other places) meant the standard 4:1 buying power, which was more than enough for my purposes. I didn't have a Series 7, so I couldn't join whatever it was you had to join to qualify for the extra leverage had I wanted to. I could, however, avail myself of all the other "perks" the prop boys had, like squawk box, news and charting services, back massages etc.

Mr. Sub.,

Exactly!

Look, I know a guy that is a multi-millionaire. He still needs buying power to trade the multitudes of strategies that he trades in the size that he does. The seriousness of a trader has little to do with how much money he has access to, as long as it is not one of these guys with $5k to put down and hope to be able to trade on that (which is probably the people P2 was referring to, though EVEN in that case, there are exceptions.)

Saying that "I do not know any serious traders who are prop." is just plain false as a GENERALITY.

nitro

 

[speedy]

Quote from Mr Subliminal:

nitro, there must be a misunderstanding here. Retail at Broadway (and I presume all the other places) meant the standard 4:1 buying power, which was more than enough for my purposes. I didn't have a Series 7, so I couldn't join whatever it was you had to join to qualify for the extra leverage had I wanted to. I could, however, avail myself of all the other "perks" the prop boys had, like squawk box, news and charting services, back massages etc.

Thank you!

 

[nitro]

Quote from speedy:



nitro,

you keep missing the point. the reason to GO to a prop firm is to use their buying power. got that? that's where the 10:1 and 25:1 come into play. ok, now for the second point, you do NOT need to be a prop trader to get news, tech support, training and other services that you listed. you can get all that trading retail at a daytrading shop.

Well,

I have never seen one of these "retail daytrading shops" that offer these things while only offering 4:1 - I mean what the hell is the difference of that and trading with IB from home? I suppose they exist, in which case the first three points above are mute (though I find it hard to believe that there isn't still OTHER benefits not listed that may be offered on the prop side as opposed to the retail arm, e.g., potential "access" to better traders on the non-retail side.)

Still, there _ARE_ people that have the money and plenty of BP, but for psychological reasons (point 4 in my original post) would rather not trade their own money. I know these people, and I would hardly consider them "not serious" because of it. A retail arm of a prop/prof firm would NOT cater to these people.

BTW, one ore point that I did not mention is that at the prop/prof side of firms, because of the buying power offered by these firms and therefore the likelyhood of the trader doing much more volume than the same trader on the retail side of the same firm, a side effect of the buying power is that you are WAY more likely to do volume and therefore be able to get/negotiate rock bottom comissions. Another "perk" of going prop/prof.

nitro

 

[speedy]

Quote from nitro:


Well,

I have never seen one of these "retail daytrading shops" that offer these things while only offering 4:1 - I mean what the hell is the difference of that and trading with IB from home? I suppose they exist, in which case the first three points above are mute (though I find it hard to believe that there isn't still OTHER benefits not listed that may be offered on the prop side as opposed to the retail arm, e.g., potential "access" to better traders on the non-retail side.)

Still, there _ARE_ people that have the money and plenty of BP, but for psychological reasons (point 4 in my original post) would rather not trade their own money. I know these people, and I would hardly consider them "not serious" because of it. A retail arm of a prop/prof firm would NOT cater to these people.

nitro

I said that the reason to go prop was for buying power/capital. I don't know why you keep insisting that I'm saying otherwise. I never said what reason they wanted to use it for but said that it was a reason. When did I ever say they were "not serious"? I am not prop but know people who trade prop and are very serious AND profitable. But, firms out there now do cater to both retail and prop alike. They want their traders to make money otherwise they would be wasting space. I had IB a long time ago and hated it. I can't give an opinion for how it is now but I doubt it provides the services that you can get at a daytrading shop in NYC.

 

[nitro]

OK.

I see the misunderstanding now. I was responding to the comment to P2 as to the seriousness of prop traders, and you responded that those things were available to retail traders, prop/prof or not [you took it out of context, so I got confused.]

Still, there is one item that falls outside your buying power stance: The psychological aspect of trading one's own money, regardless of whether the trader has ample stake or not. Retail firms DO NOT cater to these people because they require $25K+.

I know at least two traders, one at Shony, the other at Worldco, that would NEVER dream of trading their own money. One makes $250K+ a year, the other "blew out" but had several $250k+ years before decimalization - both had/have plenty of their own money to trade with.

nitro

Quote from speedy:



I said that the reason to go prop was for buying power/capital. I don't know why you keep insisting that I'm saying otherwise. I never said what reason they wanted to use it for but said that it was a reason. When did I ever say they were "not serious"? I am not prop but know people who trade prop and are very serious AND profitable. But, firms out there now do cater to both retail and prop alike. They want their traders to make money otherwise they would be wasting space. I had IB a long time ago and hated it. I can't give an opinion for how it is now but I doubt it provides the services that you can get at a daytrading shop in NYC.

 

[big_jdez]

Quote from VOLUME:

"I do not know any serious traders who are prop."- P2


Are you "serious" about that statement?

P2 is merely saying that HE DOESN'T KNOW ANYONE.
Did you go tonight and introduce yourself??

 

[speedy]

Quote from nitro:

OK.

I see the misunderstanding now. I was responding to the comment to P2 as to the seriousness of prop traders, and you responded that those things were available to retail traders, prop/prof or not [you took it out of context, so I got confused.]

Still, there is one item that falls outside your buying power stance: The psychological aspect of trading one's own money, regardless of whether the trader has ample stake or not. Retail firms DO NOT cater to these people because they require $25K+.

I know at least two traders, one at Shony, the other at Worldco, that would NEVER dream of trading their own money. One makes $250K+ a year, the other "blew out" but had several $250k+ years before decimalization - both had/have plenty of their own money to trade with.

nitro

I never commented in a negative way why traders would not trade their own money. If you can trade someone else's money and get a great deal, why not do it? considering all else equal. I did not dispute that. That's your misunderstanding.

 

[fattyasids]

nitro,

this is probably the wrong thread for this conversation but,

are you actually reading the posts that you are replying to? or are you just replying without reading and using this to run up your posting count?

 

[ktm]

I have seen numerous posts from people about being forced to trade X number of shares a day, about "monthly seat charges" of $500 or more for the privilege of trading prop, not to mention the profit splits and being forced home flat every night - like it or not.

Are you guys saying that the prop firm bears all of your losses? that effectively you are not risking anything at all to trade their money?

Even if that's true, if you multiply the commission surcharges (prop firm profit) by the seat charges times the number of months before the customer runs out of $$$, they may make all of your money anyway.

I agree if you are seriously underfunded, maybe that's an option...but it's a very costly one after you consider all of the true costs.