What to look for in a Prop Firm?

Quote from luvtrading10:

Are you kidding me?? You'll need to make a lot of cash to cover these!
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Not to argue the facts, but I see about $300-$400 bucks to "overcome" - hardly "serious cash."

I can add more to this. Our traders pay $500 annual fee to the exchange, and the $85 FINRA fee. Initial licensing may cost a few hundred as well.

Hardly a hurdle in a business sense, IMO.

Just trying to point ou that professional trading is a business, like any other...heck, in my Public Accounting days, it cost me much (much) more every year just to be able to work in the industry at a "job." ... much less a business.

Just something to balance out...

Don
 
I agree. I don't think the fees are too bad.

Don,

Why do some firms have the 1 yr lock up and some don't? I was under the impression this was a SEC rule that applied to all firms.
 
Quote from billsafari:

I agree. I don't think the fees are too bad.

Don,

Why do some firms have the 1 yr lock up and some don't? I was under the impression this was a SEC rule that applied to all firms.
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Check your PM

Don
 
Quote from billsafari:

I really don't write options unless I put on a spread or leg into a long. I need the leverage to trade around my options using the underlying. I may spend only 500 to 1.5k on options just as a partial hedge in a given month.

Broad Street offers options with 5k. They seem to have a lot of fees. Here they are. Is this about average for a firm?

K1 annual filing fee. 100.00
FINRA Non-member processing fee. 85.00 initial
FINRA disclosure processing fee 95.00 per incident
FINRA Annual Systems processing fee 30.00
FINRA US termination fee 30.00
Outside brokerage account fee FINRA monthly 25.00
FBI background check fee 20.00 initial
Fingerprint fee 21.00 initial
CBSX inactivity fee. 100.00 monthly

Then basic admin fees.
incoming wire 10.00
outgoing wire 25.00
returned check 50.00

This doesnt include platform fees.

Can I eliminate any of the FINRA fees since I am already registered with them (6 and 63 expired, current series 3)?

Here are some more potential fees if I want any of the following. No prices mentioned.

NYSE level 1
ASE - b/a l, last quotes
Nasdaq level II
Nasdaq Total View
US indexes
BATS book
Direct edge book
NYSE open book(specialists order book depth)
ARCA book listed
ARC book OTC.

I use TD and their weak tools, Level II and charts and do just fine.
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This only looks high because they were honest enough to tell you up front all the costs. I'm sure in the future if you volume is there, so can get them to cover some costs. If they have to pay these fees, and you don't cover them with your trading, you can't expect them to pay the fees for you.
 
that sounds about right. those fees are big brother gov't fees. there is no way to get around them.

Quote from billsafari:

I really don't write options unless I put on a spread or leg into a long. I need the leverage to trade around my options using the underlying. I may spend only 500 to 1.5k on options just as a partial hedge in a given month.

Broad Street offers options with 5k. They seem to have a lot of fees. Here they are. Is this about average for a firm?

K1 annual filing fee. 100.00
FINRA Non-member processing fee. 85.00 initial
FINRA disclosure processing fee 95.00 per incident
FINRA Annual Systems processing fee 30.00
FINRA US termination fee 30.00
Outside brokerage account fee FINRA monthly 25.00
FBI background check fee 20.00 initial
Fingerprint fee 21.00 initial
CBSX inactivity fee. 100.00 monthly

Then basic admin fees.
incoming wire 10.00
outgoing wire 25.00
returned check 50.00

This doesnt include platform fees.

Can I eliminate any of the FINRA fees since I am already registered with them (6 and 63 expired, current series 3)?

Here are some more potential fees if I want any of the following. No prices mentioned.

NYSE level 1
ASE - b/a l, last quotes
Nasdaq level II
Nasdaq Total View
US indexes
BATS book
Direct edge book
NYSE open book(specialists order book depth)
ARCA book listed
ARC book OTC.

I use TD and their weak tools, Level II and charts and do just fine.
More...
 
Quote from Don Bright:

Not to argue the facts, but I see about $300-$400 bucks to "overcome" - hardly "serious cash."

I can add more to this. Our traders pay $500 annual fee to the exchange, and the $85 FINRA fee. Initial licensing may cost a few hundred as well.

Hardly a hurdle in a business sense, IMO.

Just trying to point ou that professional trading is a business, like any other...heck, in my Public Accounting days, it cost me much (much) more every year just to be able to work in the industry at a "job." ... much less a business.

Just something to balance out...

Don
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The fees look like administrative fees. They don't look too bad.

It just looks like you are being nickeled and dimed.

$585 in admin fees per year. Sounds like a sad fact to me. Reminds me of the time when I was sitting in Penn Plaza to take the Series 7 exam. Met a bunch of new recruits from Morgan Stanley and none of them had to pay for the cost of the exam nor the cost of the exam materials like I. Was just another reminder that I was at a mook firm. Dayum!

Well, I doubt traders at Morgan Stanley get nickeled and dime every year with admin. fees like the $585 Bright fee or the laundry list of fees at Broad Street. I could be wrong tho. You could ask a trader at Morgan Stanley about this. :D

Oh, I think they also get a decent salary in addition to eat-what-you-kill pay. Not sure about this either. Might be worth asking. :D

They might even get a signing bonus. What da hell is this? Free lunch? Haha....:D
 
Quote from SteveNYC:

The fees look like administrative fees. They don't look too bad.

It just looks like you are being nickeled and dimed.

$585 in admin fees per year. Sounds like a sad fact to me. Reminds me of the time when I was sitting in Penn Plaza to take the Series 7 exam. Met a bunch of new recruits from Morgan Stanley and none of them had to pay for the cost of the exam nor the cost of the exam materials like I. Was just another reminder that I was at a mook firm. Dayum!

Well, I doubt traders at Morgan Stanley get nickeled and dime every year with admin. fees like the $585 Bright fee or the laundry list of fees at Broad Street. I could be wrong tho. You could ask a trader at Morgan Stanley about this. :D

Oh, I think they also get a decent salary in addition to eat-what-you-kill pay. Not sure about this either. Might be worth asking. :D

They might even get a signing bonus. What da hell is this? Free lunch? Haha....:D
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I'm pretty sure you're being facetious about "Morgan Stanley guys" LOL. Sure, there may be a few that get hired on jobs, paid to execute trades, and "brokers" of course... but as far as discretionary trading goes, well... no way. In this day and age, the independent trader has few choices.

And, again, I must say that any business or profession has some (very minor in our case) costs involved...from a Subway sandwich shops' many licenses (not to mention the gigantic profit split and the $300K-$400K "franchise fee." .... Having the license held by an exchange costs a bit, gives you privileges retail types don't have, etc. NOT for Everyone, I agree....

LOL - No "Free Lunch" - you're right

All the best,

Don
 
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