We give our traders the ability to go on a LOA (Leave of Absence) if they like. They continue to receive interest on the cash balances. However, a "casual" trader who makes 4 or 5 "trades" per month are certainly better of retail, IMO.
Don
what's the benefit of prop vs retail?
- Thread starter acerbits
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We give our traders the ability to go on a LOA (Leave of Absence) if they like. They continue to receive interest on the cash balances. However, a "casual" trader who makes 4 or 5 "trades" per month are certainly better of retail, IMO.
Don
I dont think they kick you out but as Bright said, a casual trader like that is better at retail. The allure of prop is to get the leverage and take advantage of it. I think you will find most prop traders are intraday position traders for the most part due to the leverage benefits. if you happen to go away for a few months and let them know I doubt they will kick you out if you are active in general prior to the LOA.
I think what you will find is that you can simply call the firm and let them know and take it from there.
I think what you will find is that you can simply call the firm and let them know and take it from there.
It seems that prop's main advantage is leverage, but if you have a large enough retail account and trades futures or options, you'd qualify for SPAN and portfolio margin, and that swings the advantage back to retail. For stocks, prop seems to have superior leverage over portfolio margin.
actually it seems most brokers nowadays charge an inactivity fee if your equity falls below some amount, usually 2500 to 25k. It seems that the ones that dont are in the minority.
It also may depend on volume, If you do huge volume with the leverage you can get lower rates than retail on stocks or futures. I think cross-margining and haircut are a distinct advantage if you are trading futures and options.
I believe the following do not charge inactivity fees:
OptionsXpress
thinkorswim
With so much competition out there it makes sense to go with a broker that does not charge such fees if you know you might not trade for certain blocks of time.
OptionsXpress
thinkorswim
With so much competition out there it makes sense to go with a broker that does not charge such fees if you know you might not trade for certain blocks of time.
Mr. deviltrader is correct main advantage of PROP is additional leverage or more capital to trade with. ((This assume that the PROP firm you chose is 100% safe: you will get deposit $ back and as least profits paid to trader at end of month.))
Now COMMISSION amounts. PROP or RETAIL ????????
At PROP trader will pay more in total $ amount than retail because trader has more capital in order to deploy on a per share basis I guess it depend on traders system/strategy/method/style of trading.
One nice advantage of RETAIL is fixed rate.
1000 shs at $10 is .01 kinda high.
2000 shs at $10 is .005 not to bad even for PROP rate.
PROP trader will pay more commish total in a month: but on a per share basis less than retail guy.
At end of month PROP trader has higher cost to overcome.
Retail trader (with not as much capital on hand) would have less cost to overcome and have more profit.
Now COMMISSION amounts. PROP or RETAIL ????????
At PROP trader will pay more in total $ amount than retail because trader has more capital in order to deploy on a per share basis I guess it depend on traders system/strategy/method/style of trading.
One nice advantage of RETAIL is fixed rate.
1000 shs at $10 is .01 kinda high.
2000 shs at $10 is .005 not to bad even for PROP rate.
PROP trader will pay more commish total in a month: but on a per share basis less than retail guy.
At end of month PROP trader has higher cost to overcome.
Retail trader (with not as much capital on hand) would have less cost to overcome and have more profit.
That makes no sense. retail traders has lower commission totals because they trade less so you cannot compare apples and oranges.
cost is on a per share basis to make it a fair comparison.
Well you can get $10 RT these days retail... so if you move size >1000 shares, you are definitely getting a good deal. But it depends if it's direct access or not.