Why join a Prop Firm/JBO?

Quote from Maverick74:

I've been in the business for over 10 years Robert and I can name only one firm where this happened. And that was Harbor Securities run by Warren Sulmasy. Now there have been some cases with sub LLC's which have blown up. Don Bright and myself have always warned about sub LLC's. But I can't name another firm outside of Harbor that had that situation and that was back in 1999. If you want to establish credibility, name the firms that blew out. I can. I can give you the firms, their owners and links to the court documents. Because that is how I roll. I won't throw out stories in an ambiguous manner simply to drum up business for my introducing broker.

Robert, let me help you out in your sales efforts on this board. Less then 1/2 of 1% of the guys here have trading accounts over 250k and those that do probably don't need portfolio margin. Just a heads up.
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Smack down!!! You sent this guy running with
His tail between his legs. Dragons den part deux
 
Major benefit to prop firm:

No need to risk MTM election with IRS and set yourself up for potential scrutiny/validity to trader tax status if your trading volume is questionable. Trader tax status is still an extremely gray area of which even the IRS cannot provide 100% definition of what qualifies.

With a prop firm you receive a K1- and hence 100% eliminate wash sale rules as well as accounting for your trades on a schedule D.
 
Quote from Riffraffpatrol:

Major benefit to prop firm:

No need to risk MTM election with IRS and set yourself up for potential scrutiny/validity to trader tax status if your trading volume is questionable. Trader tax status is still an extremely gray area of which even the IRS cannot provide 100% definition of what qualifies.

With a prop firm you receive a K1- and hence 100% eliminate wash sale rules as well as accounting for your trades on a schedule D.
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Tax treatment is a consideration. When I run any business, I care about risk/reward and my end of year net. With a prop firm I'm concerned about the risk of commingled funds. I want be concerned only about my trading risk. With a prop firm I feel like I have to keep my volumes up and be concerned with their rules. I want to only do trades I have an edge, and follow just the rules of law. If I require a prop firms capital to trade, all this makes sense. If I have the capital to trade without them, it's not for me.
 
Quote from rmorse:

Tax treatment is a consideration. When I run any business, I care about risk/reward and my end of year net. With a prop firm I'm concerned about the risk of commingled funds. I want be concerned only about my trading risk. With a prop firm I feel like I have to keep my volumes up and be concerned with their rules. I want to only do trades I have an edge, and follow just the rules of law. If I require a prop firms capital to trade, all this makes sense. If I have the capital to trade without them, it's not for me.
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Once again I'm going to state for the record, I've been in the business for over 10 years in both Chicago and New York. I know traders at almost every prop firm in existence and the pressure to trade has NEVER been an issue to any traders I have talked to. Please keep in mind I have no incentive to stick up for competing firms. I'm telling you this because it's true. Is it possible there is some sub LLC out there that might pressure their traders to be more active? Sure. But I would never recommend anyone going to a sub LLC anyway.
 
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