I disagree. I think if the terms of the contract makes one uncomfortable they should not sign the contract. Relying on the firm to not enforce the contract is not the same as there not being a contract. If they don't plan on enforcing the contract they should not have one. If it is there for the trader that makes it big time they could stipulate that in the contract.
Tower Hill Trading
- Thread starter 1badpug1
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I totally get what you are saying and I agree with you 100%. But thats just simply not how it is. In all my years, I have seen contracts enforced and traders taken to court on a few occasions. And in each instance, the trader was raking substantial amounts of money in, got pissed about something and wanted to leave. There is always drama surrounding the situation and everyone has a valid point, but the bottom line is that it was always about "A lot" of money.
I am just speaking from the few occasions I have seen this happen, and from those experiences I was able to draw this conclusion. Maybe I am dead wrong, I am just sharing an experience. Either way, that is a very cookie cutter contract for firms like THT, I wonder, what are people really worried about? What is there biggest fear with signing that particular contract?
The turn over rate for traders is like a revolving door, can you really imagine any firm suing every trader that left and went and got another trading Job because they breached that contract? Com'n dude......
You got a valid point. If the fact that it is rare that a firm goes after someone who leaves makes one feel like it is worth signing the contract than that's fine. My only point is that only if one is comfortable signing and you sound like you are should sign it. One should not sign a contract that they are uncomfortable signing, IMHO. I would have a lawyer review the contract before signing.
Actually, I'll tell you what they will do. They will go to court and get a judgement. Won't cost them a thing. Will cost you your credit and your reputation for the rest of your life. Don't do it. I'm sorry, a real gentleman always honors his word and his debts. Your contract, whether it's fair or not, is your word. No amount of money is worth relinquishing it.
BTW, at my old prop firm, we DID go after traders.
Mav, is this contract as crazy as it sounds? Thankfully, I haven't had to deal with many over the years.
The contract is absurd but you still have to honor it if you sign it. So yeah, I don't think traders should sign and quite frankly, I don't know why anyone would to trade 5 shares of stock. The whole idea is beyond absurd.
I'm not one to crush anyone's dreams, but it seems like they are feeding on kids who are desperate to become traders. I have to tell you, the way I trade, I don't think I would meet the goals. I bet Szeven could come in and kill it, and be trading 50 shares in no time. Lol. But I have to be automated and give my PnL some fluctuations from day to day to make it work.
My point is this: Obviously many will fail. That's just the numbers game of the business. But how many talented guys are going to come in and not find their style, and then still be under contract for years while working at Home Depot.
You need freedom is this business, or you're doomed.
I don't come from money, My only options are too sign the contracts, however, I have never gone from one firm straight to another, my goal was too make enough money to go trade from home. I did that twice and blew out my account each time ending back at the firms again for more backing. Many years ago I traded for Refco and they went after traders as well, but those were guys making a lot of money. I just don't understand what the big deal is, if you are not making any money, the barrier to entry is that much harder for another trading job, and if you are making money live out the contract and move on. Did you guys go after everyone? even the guys that did not make money? Or was it just the guys who did make money? and about what was the threshold?
I read that agreement, there is no desk fee, decent commission, the escrow bank they have sucks which brings your split down to about 55% i think he mentioned. However, At most firms, I have generally signed on for trading futures at a 60/40 split. After my desk fee and commissions, I was getting less than my percentage for sure, even on a good month and trading decent size because the commission adds up so much. Some of you might do a lot better, but a good month for me was 15 to 20k, take out the split, the desk fee and commissions and the deal is never as good as it looks on paper. I don't think the THT deal is anything crazy, plus He can trade futures with his own money, the contract states he cannot trade Equities.
Cheesy
I tend to trade the equities which are moving unusually on any given day, and I would never trade futures, but that is an excellent point. Did not know that.
But why would he do that? He's starting out with 5 shares per trade. He can't afford a futures account.
I definitely agree that you need to know what your goals and needs are, that contract may not fit everyone, I use to do automated trading as wel,l so I was very particular about the firms I signed on with at that time because I had very specific needs and I required a support structure that the firm needed to be able to facilitate. for me.
But that THT deal is not a bad way to get your feet wet if you are a starting trader. The barrier to entry for this is so hard, And to Maverick, again, lets say the poor guy blows out his account and gets fired, do you think they would really go after him? Did your last prop firm go after these people as well?
Cheesy