question

[mskl]

Is it possible to structure a deal with a PRO firm where you would put up 100% of the capital while sharing in 100% of the profits/losses?

(The reason one might look at this option instead of a retail firm is the increased leverage available at many PRO firms)


thanks.

 

[alfonso]

Quote from mskl:

Is it possible to structure a deal with a PRO firm where you would put up 100% of the capital while sharing in 100% of the profits/losses?

(The reason one might look at this option instead of a retail firm is the increased leverage available at many PRO firms)


thanks.

I take it "Pro Firms" forum hasn't been your favorite haunt since joining ET.

You hardly need to "structure" that kind of a deal; it's pretty much what's on offer anyway. Just ask Don.

 

[mskl]

You are correct. I don't know much about PRO firms. I wasn't sure if these firms wanted to "share" in your P/L.

thanks for the response.

 

[okwon]

Yes. You can work out a deal to put up 100% of your money and take 100% of the profits at almost all of the pro firms.

 

[cashonly]

Quote from mskl:

Is it possible to structure a deal with a PRO firm where you would put up 100% of the capital while sharing in 100% of the profits/losses?

(The reason one might look at this option instead of a retail firm is the increased leverage available at many PRO firms)


thanks.

We work that way. If you're interested, PM me.

Cash

 

[Discipline]

Most of them do it. It is called being a customer in Disguise. The firms are selling leverage. Your risk is that the SEC or Fed decides that this is a violation of Reg T and cracks down.

 

[mskl]

Quote from Discipline:

Most of them do it. It is called being a customer in Disguise. The firms are selling leverage. Your risk is that the SEC or Fed decides that this is a violation of Reg T and cracks down.

This is exactly what I was worried about. The only distinctions would be the Series 7 requirement and that your capital is not covered by the SIPC. I wonder if this is enough for the regulators??

 

[Discipline]

My opinion is that it is not. If it looks like a customer and acts like a customer, how can it not be a customer?

 

[GATrader]

Far be it for me to defend these pro firms but some pro firms will let you trade with zero or even negative balances which will not be allowed in customer accounts. I guess that is one safe harbor these firms so. Maybe let x% of accounts trade at neg balance as long as trader is in a tight leash, so when regs come in they can show that they are not customers ..plus the Series 7 requirement.