Regulated Prop Firms

NazSpaz · May 1, 2009

Quote from EricP:

But, they don't really pay out "all profits" do they? They just keep a share of profits in a different way, in higher commissions.

Different firms will be better for different traders, no doubt. Traders that make consistently large average per share profits will benefit from "100% payouts" and larger commission rates, while traders that are high volume traders with smaller profit margins will often be better with firms with virtually no commissions charged and a profit split arrangement. Newbie traders that are net negative or breakeven will also benefit from minimal commissions and a profit split.

Ideally, a trader will work towards a broker that offers 100% payout and extremely low commissions, although deals like that are only available to very high volume, and consistently profitable traders.

Hard part is obviously everyone's deal is different, I can tell you I am with Echo and my commissions are a touch lower than the rates I have seen posted here for those other firms, and I get 100%. But as you also mentioned I am a high volume consistent guy, so I am sure a lot of guys have higher commissions than I do even here.

I can see your point that for a newbie to trading or a guy struggling, a % split is fine, but anyone with those firms who is consistently profitbale is making a mistake by not switching to get the same commish and a higher % or 100%.

proptrader12345 · May 3, 2009

NAZSPAZ
So you say your commissions are a bit larger so what exactly are they. Also are you registered with Echo as this is a huge difference. Guys I know are trading 2-3 million shares a day and need 20- 50 million in Buying power so in my opinion what the big deal if i pay back the firm 30 percent for all of this ( low commission and a ton of BP + I can hold over nights and trade from my house) I think I have the best deal in town

bpcnabe · May 3, 2009

Quote from NazSpaz:

If you want leverage it pays just to get a series 7, head to a regulated firm, and not worry about government raids.

For many, it is not possible to get a Series 7 license. Gov't is fairly predictable in this regard to dealing with people who have less than perfect past. Everyone makes mistakes, some greater than others. Is it your belief that if someone made such a mistake, it is F.U. to trading their own money?

Trader7793 · May 3, 2009

I was a principal at an investment advisory firm and we had candidates who got their series 7 license, who had prior cocaine distribution convictions. Lots of people had prior bankruptcies etc. Now of course they had to disclose all of that on their U4. Unless someone has been barred from the industry for securities fraud or something, they can usually get licensed...if they can find a firm that is willing to sponsor them.

The reason that I bring this up is because sometimes people assume that their mistakes of the past prevent them from being licensed, when it does not, especially for prop trading.

Shreddog · May 3, 2009

Quote from NazSpaz:

Hard part is obviously everyone's deal is different, I can tell you I am with Echo and my commissions are a touch lower than the rates I have seen posted here for those other firms, and I get 100%. But as you also mentioned I am a high volume consistent guy, so I am sure a lot of guys have higher commissions than I do even here.

I can see your point that for a newbie to trading or a guy struggling, a % split is fine, but anyone with those firms who is consistently profitbale is making a mistake by not switching to get the same commish and a higher % or 100%.

You get < .0002 at Echo and 100%? I find that hard to believe.

bpcnabe · May 3, 2009

Quote from Trader7793:

I was a principal at an investment advisory firm and we had candidates who got their series 7 license, who had prior cocaine distribution convictions. Lots of people had prior bankruptcies etc. Now of course they had to disclose all of that on their U4. Unless someone has been barred from the industry for securities fraud or something, they can usually get licensed...if they can find a firm that is willing to sponsor them.

The reason that I bring this up is because sometimes people assume that their mistakes of the past prevent them from being licensed, when it does not, especially for prop trading.

So you are saying barring rape, murder and securities fraud, someone with a felony conviction "could" probably still get licensed if someone was willing to sponsor them?

NazSpaz · May 4, 2009

Quote from Shreddog:

You get < .0002 at Echo and 100%? I find that hard to believe.

Quote from proptrader12345:

NAZSPAZ
So you say your commissions are a bit larger so what exactly are they. Also are you registered with Echo as this is a huge difference. Guys I know are trading 2-3 million shares a day and need 20- 50 million in Buying power so in my opinion what the big deal if i pay back the firm 30 percent for all of this ( low commission and a ton of BP + I can hold over nights and trade from my house) I think I have the best deal in town

I have probably said too much, I'm not here to brag about my deal or anything of the sort. Yes I get that and have a very good deal, but I do a TON of shs, and I don't want to specify exactly how many because I will never be one of those guys telling people here how I trade or giving any clues of the sort. On that note I think the people that do spill what they do here are morons as other black box guys like myself (and myself included) have acquired some good ideas in the past from people bragging on these boards and I have no doubt that my activity later in their strategy has cut into their income. Funny because actually one of the main reasons I prowl around on these boards is looking for ideas and ways to improve/tweak my strategies, hoping someone will give away something useful during a bragging session. Every now and then it happens.

I am just saying I don't know why any successful trader would be ok with giving up 30% of what they make to a firm when there are so many places that would not take that from them. Guys have said that they are willing to do this to get .20/cents per share on their trades (.0002 per thousand as some people quote it), and I do know that Echo will do this rate and give 100% for traders that do large volume (am guessing around 50+ mil shs per month based on when my rates dropped). I don't know what someone else will need to say to them to get this, and I don't know if they will start you at this rate or a higher one and lower you later like they did me, but I do know firsthand this does exist there for high volume traders - well, at least myself. But from picking up tidbits when I talk to support staff or techs I do not believe I am even close to the biggest trader there, nor do I believe that I pay the lowest rates there.

Obviously you have to be a large trader to get these kinds of deals, but if you are they seem pretty widespread without giving up 30% to a firm. Now, for a new trader that needs guidance and teaching, I think giving up 30% or even 50% to someone to learn how to make a living in trading is totally fine. I did that many many years back and am still glad I did, would not be where I am without that experience. But once you know what you are doing, and have paid your mentoring firm many times over, I think every successful trader then owes it to themselves to look for the best deal they can and at some point stop paying that 30%. Paying it forever doesn't seem fair to me unless they are teaching you forever.

karth · May 4, 2009

"and have paid your mentoring firm many times over, I think every successful trader then owes it to themselves to look for the best deal they can and at some point stop paying that 30%. Paying it forever doesn't seem fair to me unless they are teaching you forever."

-- Yeah Sure :eek: :eek:

Quote from NazSpaz:

I have probably said too much, I'm not here to brag about my deal or anything of the sort. Yes I get that and have a very good deal, but I do a TON of shs, and I don't want to specify exactly how many because I will never be one of those guys telling people here how I trade or giving any clues of the sort. On that note I think the people that do spill what they do here are morons as other black box guys like myself (and myself included) have acquired some good ideas in the past from people bragging on these boards and I have no doubt that my activity later in their strategy has cut into their income. Funny because actually one of the main reasons I prowl around on these boards is looking for ideas and ways to improve/tweak my strategies, hoping someone will give away something useful during a bragging session. Every now and then it happens.

I am just saying I don't know why any successful trader would be ok with giving up 30% of what they make to a firm when there are so many places that would not take that from them. Guys have said that they are willing to do this to get .20/cents per share on their trades (.0002 per thousand as some people quote it), and I do know that Echo will do this rate and give 100% for traders that do large volume (am guessing around 50+ mil shs per month based on when my rates dropped). I don't know what someone else will need to say to them to get this, and I don't know if they will start you at this rate or a higher one and lower you later like they did me, but I do know firsthand this does exist there for high volume traders - well, at least myself. But from picking up tidbits when I talk to support staff or techs I do not believe I am even close to the biggest trader there, nor do I believe that I pay the lowest rates there.

Obviously you have to be a large trader to get these kinds of deals, but if you are they seem pretty widespread without giving up 30% to a firm. Now, for a new trader that needs guidance and teaching, I think giving up 30% or even 50% to someone to learn how to make a living in trading is totally fine. I did that many many years back and am still glad I did, would not be where I am without that experience. But once you know what you are doing, and have paid your mentoring firm many times over, I think every successful trader then owes it to themselves to look for the best deal they can and at some point stop paying that 30%. Paying it forever doesn't seem fair to me unless they are teaching you forever.

proptrader12345 · May 4, 2009

With all due repect something doesnt jive here. I have been around the block many a times and do well over 50 million shares a month (blk box) and make a ton a year with virtually NO down days. With this said it makes NO sense that a firm would pay 100% out to only make 20 CENTS gross commissions per 1000. After over head ,cost of capital clearing (even if your self clearing) THIS DEAL DOES NOT EXIST.NAZ you can talk till your blue in the face but getting 50 million and 100 payout and 20 cents a thousand is just NOT REALITY AND I THINK EVERY ONE HERE KNOWS IT. I have spoken many a times to ECHO and its just pure BS.

I have probably said too much, I'm not here to brag about my deal or anything of the sort. Yes I get that and have a very good deal, but I do a TON of shs, and I don't want to specify exactly how many because I will never be one of those guys telling people here how I trade or giving any clues of the sort. On that note I think the people that do spill what they do here are morons as other black box guys like myself (and myself included) have acquired some good ideas in the past from people bragging on these boards and I have no doubt that my activity later in their strategy has cut into their income. Funny because actually one of the main reasons I prowl around on these boards is looking for ideas and ways to improve/tweak my strategies, hoping someone will give away something useful during a bragging session. Every now and then it happens.

I am just saying I don't know why any successful trader would be ok with giving up 30% of what they make to a firm when there are so many places that would not take that from them. Guys have said that they are willing to do this to get .20/cents per share on their trades (.0002 per thousand as some people quote it), and I do know that Echo will do this rate and give 100% for traders that do large volume (am guessing around 50+ mil shs per month based on when my rates dropped). I don't know what someone else will need to say to them to get this, and I don't know if they will start you at this rate or a higher one and lower you later like they did me, but I do know firsthand this does exist there for high volume traders - well, at least myself. But from picking up tidbits when I talk to support staff or techs I do not believe I am even close to the biggest trader there, nor do I believe that I pay the lowest rates there.

Obviously you have to be a large trader to get these kinds of deals, but if you are they seem pretty widespread without giving up 30% to a firm. Now, for a new trader that needs guidance and teaching, I think giving up 30% or even 50% to someone to learn how to make a living in trading is totally fine. I did that many many years back and am still glad I did, would not be where I am without that experience. But once you know what you are doing, and have paid your mentoring firm many times over, I think every successful trader then owes it to themselves to look for the best deal they can and at some point stop paying that 30%. Paying it forever doesn't seem fair to me unless they are teaching

NazSpaz · May 4, 2009

Quote from proptrader12345:

With all due repect something doesnt jive here. I have been around the block many a times and do well over 50 million shares a month (blk box) and make a ton a year with virtually NO down days. With this said it makes NO sense that a firm would pay 100% out to only make 20 CENTS gross commissions per 1000. After over head ,cost of capital clearing (even if your self clearing) THIS DEAL DOES NOT EXIST.NAZ you can talk till your blue in the face but getting 50 million and 100 payout and 20 cents a thousand is just NOT REALITY AND I THINK EVERY ONE HERE KNOWS IT. I have spoken many a times to ECHO and its just pure BS.

Yeah, sorry, got a PM that pointed out the math. The way Echo quotes rates is saying .002 per share, when someone said .0002 per thousand since I always think in terms of hundreds I figured that was the same thing, to clarify I was discussing $2.00 per thousand, someone said the math they were discussing is actually 20-cents per thousand, with that math I could see why a guy would give up a % of profits to the firm. To be honest, I spent about 20 minutes adding up what I made each month last year and seeing if those rates plus giving up 30% would be better for me, and while it would not for me, I could see how for some guys that is in interesting way to do it. I assumed we were quoting the same type rate, sorry for the confusion.