what's the benefit of prop vs retail?

I do agree with Mr. OptionCoach: passing the series 7 test is a moot point between retail and prop. If you have college degree this is just another test to study for and pass.

So Don, are you saying CAN NOT trade with Bright (even open an account) until you pass exam??

So trader must begin to study for exam before taking the $1000 training class ?????
 
No you missed the point. The cost is on a per share basis if you want to compare the two.

The prop guy can trade way more shares due to prop leverage and make a bigger return (assuming profitable) on his money compared to retail.

It is silly to say commissions are higher for prop just because prop is trading 100,000 shares versus retail trader of 1000 shares. If you compare 1000 shares in retail versus prop, prop will be cheaper (or else you do not do enough volume or are getting a raw deal). You cannot compare apples and oranges.

Quote from timcar:

Mr. OptionCoach WOW!!!!

That's the whole point RETAIL trader has lower commish cost.

If RETAIL commish cost($500) PROP commish cost($1000).
If both have profits of $2000 then less commish cost RETAIL guy netted more money end of month. Retail guy makes $1500 vs PROP guy $1000.
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Quote from optioncoach:

If you compare 1000 shares in retail versus prop, prop will be cheaper (or else you do not do enough volume or are getting a raw deal). You cannot compare apples and oranges.
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This is not necessarily true. Typically, commission rates are negotiable and your ability to get a good rate is based upon volume alone. Prop or retail, those with the highest volume will get the lowest rate. A high volume retail trader will get a much lower rate than a low volume prop trader. Similarly, a high volume prop trader will get a much lower rate than a low volume retail trader.

So, commissions rates do not vary for prop versus retail. Instead, commission rates vary based upon volume (not account type, prop/retail).

Note: These comments are based upon comparing retail firms with prop firms paying 100% payout of profits. Some firms like Swift, etc, payout only 60% or less of profits, and pass along commissions at cost (or extremely cheaply). However, this would not be an apples-to-apples comparison since the payouts would be different.
 
Quote from EricP:

This is not necessarily true. Typically, commission rates are negotiable and your ability to get a good rate is based upon volume alone.
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That is exactly what I said. And again we need to compare apples to apples. Same share amounts, you should get a better commission rate at prop if you do volume. You are not making a valid comparison talking about more shares volume on one side and not the other. All things being equal, if you do prop type volume then you should get lower rates at the prop over retail. If you are not daytrading or doing real volume then there is no real need to move to prop from retail unless you simply want pure leverage.

We can go in cirlces all day and say the same thing but the point of going prop is not just leverage but to get lower commissions as you step up in volume. We are talking a bout pure 100% payout props, not newbie scrubs looking to only put down $5k and give it a try.
 
I would love to hear about a retail trader doing 3,000,000 shares a month on nothing more than reg t and getting .001 commissions. That has to be a rare case. And if so why would you assume a prop guy could not get the same rate?

Quote from joeyata1:

actually a retail guy doing the same vol as a prop guy should get a better rate if he's a good negotiater. reason why is the retail guy is using no leverage and therefore is no risk or expense.clearing rates are so low now its incredible so a guy paying .001 a share retail remote for 3 mil vol is making the firm a min of $1500 a month net if not more
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Quote from optioncoach:

I would love to hear about a retail trader doing 3,000,000 shares a month on nothing more than reg t and getting .001 commissions. That has to be a rare case. And if so why would you assume a prop guy could not get the same rate?
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Coach,

Just out of curiosity, where did you quote this post from? I don't see it on the thread. :)
 
that was my quote. after posting it i erased it as i don't really like talking about rates but the quote is correct. i mainly wrote it because for years don has sworn up or down his .004 rates at bright are the best but anyone who does some vol knows what the true rates are .
 
Quote from joeyata1:

that was my quote. after posting it i erased it as i don't really like talking about rates but the quote is correct. i mainly wrote it because for years don has sworn up or down his .004 rates at bright are the best but anyone who does some vol knows what the true rates are .
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Actually, I don't recall Don ever saying his rates are the best. He has admitted to the fact that his rates are higher then most but makes up for it vis-a-vis his firm's clean balence sheet.
 
no but don has said many times that he didn't believe other firms offer .002 or .0025 per share which is incorrect and they offer all the bells and whistles of bright. hey obviously bright is offering something people want and can charge higher rates. i'd do the same thing
 
All I can say is that I judge by the traders coming here from other Firms...they wouldn't be here if they didn't think the overall deal is better. I have never claimed to be the "cheapest" - but I think our traders are pretty smart and very talented, and wouldn't be here if they weren't happy with everything as a package.

Don
 
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