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Where Do Props Set Up Shop?
- Thread starter cstfx
- Start date
London, Gibraltar (tax breaks), Montreal...
You might be interested in this thread too
http://www.elitetrader.com/vb/showthread.php?s=&threadid=91433
You might be interested in this thread too
http://www.elitetrader.com/vb/showthread.php?s=&threadid=91433
Quote from Dogfish:
London, Gibraltar (tax breaks), Montreal...
You might be interested in this thread too
http://www.elitetrader.com/vb/showthread.php?s=&threadid=91433
More specifically, continental US, that is.
Quote from cstfx:
Other than the obvious (NYC, Chicago, South Florida) where do props set up shop to take advantage of the talent pool? While I am aware that many to most props have remote traders, so location is a non-issue, this is more about those shops that thrive on in-house trading. Thx
A quick history. Back in the 1990's we had about 45 locations at one point, primarily because it cost us $10K-$20K or so to have
T-1 lines to Chicago and New York. As the technology improved, and broadband was everywhere, we let the traders decide, as the leases came due, whether or not they wanted to keep the office, some did, most didn't care, so they went remote.
Most of our growth was then in remote trading.
Fast forward to 2005. We now allow what basically amounts to a "free franchise" for those traders who want to set up an office and bring in other traders via our "affiliate program." More information here: http://www.stocktrading.com/locations.html
This brought about Great Neck, Boston, Langley, Vancouver, and now Denver is showing promise as well as Austin.
So, basically, wherever we have strong traders with entrepreneurial instincts, we can have group locations.
We, obviously, offer support to these locations to help in their expansion, along with incentives to the affiliate managers.
All the best,
Don
Quote from Don Bright:
... showing promise as well as Austin.
Why so much Austin and not Dallas or Houston? Or is it just where you are getting hits lately?
I see threads posted on other boards as well that ask for prop shops in TX, but it seems very few houses are will to expense an office there.
Quote from cstfx:
Why so much Austin and not Dallas or Houston? Or is it just where you are getting hits lately?
I see threads posted on other boards as well that ask for prop shops in TX, but it seems very few houses are will to expense an office there.
A few years back the "SOES Bandits" left a real bad taste with the people in Texas, including state regulators and traders. Just too much nonsense going on, and interest by serious traders was simply lacking. We had both Dallas and Houston for a few years, with modest success, but our Houston manager moved to Vegas to be with us here, and the Dallas manager went remote.
As the resurgence grows, we are open to an affiliate location in any city in Texas.
We just happen to have traders in Austin. And there are established traders unhappy with their current deals with other Firms.
Don
Don,
You are not a Prop Shop, you collect commish from your traders and make this business tougher than it already is. Stop Kidding yourself.
You run a Commish Brokerage operation for semi professional traders that need front end access and a place to plugin.
Nothing proprietary about your business, except you were there early. Congrats on that.
Why am I bitter about this.....I have seen alot of traders the last 3-4 years generate gross positive accounts on their trading and only give it back to the firm that is collecting some juicy margins on this JBO structure you run.
If you want to be a prop shop than let your traders trade at cost on clearance and execution and capital fees and live off the P/L split that real prop shops feed their families on and develop traders that will be loyal to you for offering a fair deal.
I think that would be slim picking for you. The real shops have that talent already and you get minor league trader paying his own way to make it to the big leagues.
I do not have any problem with those types nor do I want to insult your traders but this Fricken Erks me when you put your operation in this elite class. Please stop repeatedly doing that.
You are not a Prop Shop, you collect commish from your traders and make this business tougher than it already is. Stop Kidding yourself.
You run a Commish Brokerage operation for semi professional traders that need front end access and a place to plugin.
Nothing proprietary about your business, except you were there early. Congrats on that.
Why am I bitter about this.....I have seen alot of traders the last 3-4 years generate gross positive accounts on their trading and only give it back to the firm that is collecting some juicy margins on this JBO structure you run.
If you want to be a prop shop than let your traders trade at cost on clearance and execution and capital fees and live off the P/L split that real prop shops feed their families on and develop traders that will be loyal to you for offering a fair deal.
I think that would be slim picking for you. The real shops have that talent already and you get minor league trader paying his own way to make it to the big leagues.
I do not have any problem with those types nor do I want to insult your traders but this Fricken Erks me when you put your operation in this elite class. Please stop repeatedly doing that.
You know, I have found it so interesting that, over the years, we have gotten so many traders from what you refer to as "prop" - meaning that they don't pay out 100%, and yet still charge commissions to their traders.
If you think about it, a trader who, for lack of putting up a few bucks, will think he is "hired" ...for no salary or draw, and think he is going to remain more than a couple of months if he doesn't perform. This is pure fantasy.
For example, I was chatting with one of my better traders who spent a couple years with one of the (if not "The") largest firms who do not accept deposits. So, here are some facts.
When he would generate $30,000 gross per month, the firm kept about $10,000 for commissions, leaving $20,000, of which he would get between $5,000 and $12,000 (over the years) ... and this wasn't even paid out immediately, this firm actually kept a big part of the money for payout a year or more later (a "golden handcuff" if you will).
So, when this trader and his group finally could take no more of this abuse, they decided to keep a couple of months earnings, join our Firm, and now run their own business, within ours, and keep 100% of their earnings...
So, by investing in yourself vs. being under the thumb and dictate of someone else, these people (not from just one firm, but 3 that I can think of), our traders are essentially doubling their earnings. To me, this is the sign of a good business person, who will do well in life.
Having a "job" is fine, but probably much more risky than (and less profitable) than working for one's self, as evidenced by all the talent that has been fired the last few years.
Our business model duplicates what my brother and I enjoyed when we first started. We had to by seats on the exchange (a bit costly), but thought it was great that if we put up a few bucks to SLK (now Goldman Sachs), and they would allow us to use their capital to trade with, and we got to keep all of our profits, and we were not at risk of being fired....we were in charge of our own destiny.
This arrangement is not for everyone, but appeals to a lot of traders, because traders tend to be independent, and not afraid to invest in their own future.
I can think of one firm, FNYS, that does have a good plan for "employee type" traders, but they only add a handful of traders each year (I'm basing this on my understanding of their training and business model). The other "props" in the industry today are few and far between....because....if you think about it, why should these firms "pay" anyone to risk their money for them, when they can do it themselves with the technology available?
Our hundreds of independent traders have a very limited downside, an unlimited upside, and can use our capital to engage in working strategies that they could not otherwise take part in.
There will always be "worker bees" and there will always be entrepreneurs in this great Country of ours....and Bright Trading simly caters to the latter group. Our people come in with their eyes wide open and see full disclosure on our part.
One final thing, if you really looked at some of the contracts of some of these "prop" shops you refer to, you would be astounded, I know I am.
All the best,
Don ( I submit the above with full respect to your opinion)
edit: Many of our traders also come from the PDT environment so that they can receive interest on short stock, lower per share costs, and use enough capital to participate in strategies that actually work vs. the directional gambling most retail people are stuck trying to do. FWIW. I think our traders have a much better chance to survive and thrive than the average PDT guy trying to pick a stock, or pick a direction. It does "take money to make money" in this business.
If you think about it, a trader who, for lack of putting up a few bucks, will think he is "hired" ...for no salary or draw, and think he is going to remain more than a couple of months if he doesn't perform. This is pure fantasy.
For example, I was chatting with one of my better traders who spent a couple years with one of the (if not "The") largest firms who do not accept deposits. So, here are some facts.
When he would generate $30,000 gross per month, the firm kept about $10,000 for commissions, leaving $20,000, of which he would get between $5,000 and $12,000 (over the years) ... and this wasn't even paid out immediately, this firm actually kept a big part of the money for payout a year or more later (a "golden handcuff" if you will).
So, when this trader and his group finally could take no more of this abuse, they decided to keep a couple of months earnings, join our Firm, and now run their own business, within ours, and keep 100% of their earnings...
So, by investing in yourself vs. being under the thumb and dictate of someone else, these people (not from just one firm, but 3 that I can think of), our traders are essentially doubling their earnings. To me, this is the sign of a good business person, who will do well in life.
Having a "job" is fine, but probably much more risky than (and less profitable) than working for one's self, as evidenced by all the talent that has been fired the last few years.
Our business model duplicates what my brother and I enjoyed when we first started. We had to by seats on the exchange (a bit costly), but thought it was great that if we put up a few bucks to SLK (now Goldman Sachs), and they would allow us to use their capital to trade with, and we got to keep all of our profits, and we were not at risk of being fired....we were in charge of our own destiny.
This arrangement is not for everyone, but appeals to a lot of traders, because traders tend to be independent, and not afraid to invest in their own future.
I can think of one firm, FNYS, that does have a good plan for "employee type" traders, but they only add a handful of traders each year (I'm basing this on my understanding of their training and business model). The other "props" in the industry today are few and far between....because....if you think about it, why should these firms "pay" anyone to risk their money for them, when they can do it themselves with the technology available?
Our hundreds of independent traders have a very limited downside, an unlimited upside, and can use our capital to engage in working strategies that they could not otherwise take part in.
There will always be "worker bees" and there will always be entrepreneurs in this great Country of ours....and Bright Trading simly caters to the latter group. Our people come in with their eyes wide open and see full disclosure on our part.
One final thing, if you really looked at some of the contracts of some of these "prop" shops you refer to, you would be astounded, I know I am.
All the best,
Don ( I submit the above with full respect to your opinion)
edit: Many of our traders also come from the PDT environment so that they can receive interest on short stock, lower per share costs, and use enough capital to participate in strategies that actually work vs. the directional gambling most retail people are stuck trying to do. FWIW. I think our traders have a much better chance to survive and thrive than the average PDT guy trying to pick a stock, or pick a direction. It does "take money to make money" in this business.
Sorry for the long post above everyone, the timing of the poster just happens to coincide with a discussion I've been having with one of my group leaders.
Don
Don
don people come to bright for lower per share costs? you got to be kidding me. bright has the highest commission rates of any prop outfit in america. for instance your lowest rate are .004 and if i'm not mistaken thats for shares over 1k? you keep talking about leverage etc. 90% of the people ont his board are day or intra day swing traders so they don't hold overnight. if i'm doing 2-4 million shares a month i can get commisons of .0015 or less per share with genesis and save 7-10k a month commissions over what bright charges.