Retail vs Prop

Quote from webbma:

that does help...that is the kind of thing I am looking for. Any other opinions people have I'd love to hear them. tks.
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I think you need to ask yourself some questions, such as:

1. Do I want to trade remote or in an office with other traders?
2. How much capital do you have? I'd think as a 15 year trader you should have ample capital so that may not be an issue on decision of prop vs. retail.
3. How many shares do you trade per day? Then compare what rates you can get prop vs. retail.
4. Trading remote allows more flexibility in ones life IMO.
 
Quote from webbma:

that could be summed up in quality of life. I want more freedom than that path would allow me.
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That is good enough. If freedom is the main reason and I assume you don't want to trade OPM, you should trade on your own.

Advantages of prop is mainly leverage and loan.

1. You normally get 20:1 daytrading power with prop, and 4:1 retail.

2. prop gives you at least 6:1 overnight leverage, and retail with pm is the same.

3. prop can give you loan (i.e. you can go more than 6:1 leverage overnight), and you can get 12:1 or 18:1 or more with interest charge at prime + x (x is negotiable). "Normally" it means no "hard" deadline for margin call (similar to a hedge fund). However it means prop can liquidate your position when they are not comfortable with your risk level and the market condition.

4. I assume you have enough experience in trading and don't need any training. In fact many training in prop firms is useless. You don't need to trade with "successful" traders since I assume you are a "successful" trader already.

5. commission rate for prop and retail are similar.

6. You get a better interest credit for prop.

7. Prop is not spic insured. Your account is not seggregate. Your trading account belongs to the prop firm. If the prop firm goes under, you get nothing back.
 
Quote from DHOHHI:

I think you need to ask yourself some questions, such as:

1. Do I want to trade remote or in an office with other traders?
2. How much capital do you have? I'd think as a 15 year trader you should have ample capital so that may not be an issue on decision of prop vs. retail.
3. How many shares do you trade per day? Then compare what rates you can get prop vs. retail.
4. Trading remote allows more flexibility in ones life IMO.
More...

You can trade remote or in an office for both retail or prop. Most prop firms accept retail customers who can trade in the office.
 
OK, I'm sure you all expected to see me in here, based on the thread title, LOL.

I'm not going to read the replies at this point, just offer this.

It takes a $million or more to engage is some of our best strategies (Opening Only and MOC imbalances to name just two). And this means "using" capital (not "abusing" capital) vs. simple leverage.

$25K x 4 = $100K, very limiting, not to mention he other Pattern Daytrader restrictions. This is about 2000 shares of a $50.00 stock or 4 lots of 500...how in the heck are you going to make a decent 6 figure income with that? Now, if you have a $million or more to use, then maybe retail is ok for you.

We pay full Goldman Sachs interest on money from short stock sales, retail does not. This, again, allows for long short strategies that would be cost prohibitive retail.

Don
 
nowadays the only difference between prop and retail trading is leverage.

even if you have enough money to fund a 4:1 retail account and get nice leverage, I would still prefer prop as you can invest your trading capital in some other venture.
 
There is a REASON successful hedge funds are VERY SECRETIVE.

If you go prop...
You will ZERO protection in terms of "intellectual property"...
And IF you are doing something creative and profitable...
The firm will pile dozens of traders into your game.

This has nothing to do with ethics... it's just real life.

I interviewed with Bright in Vancouver and Vegas a few years ago...
And it was no deal for this reason.

Luckily for me...
Bright is not competing with me today...

Or maybe it wouldn't matter...
Since I would be taking $$$ away from 90% of the Bright traders...
The same way I've been taking $$$ away from Specialists for 15 years.
 
LOL, as if we have time or care what people are doing (as long as they don't show up on risk, we never bother). For example, we have a trader overseas who started 4 years ago. He made a half Million the first year, over a $million the next few years each year. He was going to "retire" and we called him and said "no, you're crazy" ....we advised him to train someone to take over for him, and that account is up well over a $million this year.

To this day, I have no idea what he's doing...never shows up on risk or anything.

We never ask for code from the automated programs. Although we had a trading group that was so thankful for the leeway and leverage we gave them that they cut us in for a percentage of their profits without having to do so, nice people.

We do discourage things that we have been asked about that we know don't work well.

I do agree that it can certainly happen however, I'm not naive. I remember the old days on the trading floor when our old clearing firm would "ask" us to close certain positions, and for some reason a broker would show up in the pit with orders to allow us to close positions....orders from clearing firm.

I actually do think it has something to do with ethics and the Firm you choose to trade with. And, nothing to stop a retail firm from knowing exactly what you're doing since all the trades are run through their computers obviously.

And, please help yourself to whatever the market or our traders can provide for you, we're doing fine, LOL.

All the best,

Don
 
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