Prop trading looks great, then why most retail traders don't simply join in?

I've wondered that for a while. I figured it has to do with the degree of risk that can't be managed in clear-cut terms, and SEC restrictions. I'm sure the regulators do not want to deal with the broader market consequences if everyone suddenly switched to a higher risk, leveraged prop model.
 
I would never do it for a lack of overnight holds and more sophistocated strategies like options. Most of my money I make holding longer term. liquidating end of day would cut my profit at least in half if not more.
 
Boy these investment banks sure do have a competitive advantage, they have their little analyst who issue upgrades downgrades and all the other grades they seem to apply.

They have access to the media, they have alot os capital, and to think we actually compete with these guys, sometimes size is a disadvantage though.
 
Quote from dac8555:

I would never do it for a lack of overnight holds and more sophistocated strategies like options. Most of my money I make holding longer term. liquidating end of day would cut my profit at least in half if not more.
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Can you use the leverage offered by prop firms to compensate that? Comments?
 
Quote from Dogballoon:

I've wondered that for a while. I figured it has to do with the degree of risk that can't be managed in clear-cut terms, and SEC restrictions. I'm sure the regulators do not want to deal with the broader market consequences if everyone suddenly switched to a higher risk, leveraged prop model.
More...

Isn't that because perhaps particularly remote prop trading is available now?
 
Quote from myminitrading:

Boy these investment banks sure do have a competitive advantage, they have their little analyst who issue upgrades downgrades and all the other grades they seem to apply.

They have access to the media, they have alot os capital, and to think we actually compete with these guys, sometimes size is a disadvantage though.
More...

Are you saying we should have joined prop trading by now?
 
Quote from dac8555:

I would never do it for a lack of overnight holds and more sophistocated strategies like options. Most of my money I make holding longer term. liquidating end of day would cut my profit at least in half if not more.
More...

I'm not familiar with what you describe. I don't know of any firms that don't allow you to hold overnight.
 
Quote from OddTrader:

Prop trading looks great, then why don't most retail traders simply join in?

http://en.wikipedia.org/wiki/Proprietary_trading

http://www.investopedia.com/terms/p/proprietarytrading.asp
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I have not read the entire article,but I am the ex head trader of equity derivatives at a major investment bank and have "insight" into what it is that generates the $$$$

Let me clarify the edge that investment banks have..

Captive CUSTOMERS

FLOW

TECHNOLOGY

I can assure you that the traders making the big numbers at these shops are no better than alot of the traders on ET.In fact,I am being very kind....
 
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