Why no prop firms for non "active" traders !?

[Chuck Noblet]

Quote from konviction:

I have yet to see a prop firm that lets a trader use the firms money to trade but does NOT require that they are "active" aka day traders.

This is very annoying to me. I'd like to substantially grow my capital, but I can't seem to find a firm that will give me that chance.

One of the primary advantages of using a prop shop is the leverage. I take it that is why you are interested. For instance, you put up $10k and they give you $200k buying power. That is 20:1 INTRADAY buying power. Most shops don't want to be exposed to that kind of overnight risk. 2:1 leverage is more like what you would get for overnights. That's what you'd get going retail.

If you want more leverage, you can try using options.

 

[Maverick74]

Quote from 1a2b3cppp:

Because prop firms make money by betting against their traders and through commissions.

If a firm let their traders make only a few trades per year, 1) they wouldn't do enough volume to make money on commissions, and 2) there's a lower chance their traders would lose money (which means the firm would make less money).

This is absolutely one of the most absurd things I have ever heard on ET in 11 years. And believe me, that's quite a feat considering the nut jobs that post here.

As someone who was involved with a prop firm for 8 years and who witnessed them get sanctioned millions of dollars in fines by their SRO for simply failed to properly designate an order properly, I can tell you that prop firms are more regulated then nuclear power plants. Broker dealer have to keep every effing detail of every little thing they do for their annual audits. The partners have to reconcile every single transaction with purpose.

I understand perhaps you were simply making a joke and were bored on a Sunday night. But can you please take that crap to chit chat and not pollute the prop forums section with it. We are trying to keep things semi-respectable up here. Even if it's just for show. Thanks.

 

[dealmaker]

Quote from konviction:

I have yet to see a prop firm that lets a trader use the firms money to trade but does NOT require that they are "active" aka day traders.

This is very annoying to me. I'd like to substantially grow my capital, but I can't seem to find a firm that will give me that chance.

I believe Maverick Trading uses the type of style you are looking for, you do trade their money however they charge hefty training fees and take % of your profits.

 

[ofthomas]

Quote from konviction:

I have yet to see a prop firm that lets a trader use the firms money to trade but does NOT require that they are "active" aka day traders.

This is very annoying to me. I'd like to substantially grow my capital, but I can't seem to find a firm that will give me that chance.

they would have to put up more capital and bear your overnight risk, which I don't see why they would do given it would require them to manage that risk like hawks (and try to offset it as well)... they are in the business of making money while reducing their risks... so ideally, flat or properly hedge by end of day from what I understand.

if you want to get leverage, your best bet is portfolio margin and just make sure that you can stress test different scenarios taking place with your portfolio that wont trigger a call, or hedge your risk with option spreads...

 

[konviction]

Traders at any of the major Wall Street firms all hold overnight. So what's the difference between a professional trader at a prop firm compared to one at Goldman? Why does Goldman take the overnight risk while 99% of other firms won't?

I understand the overnight risk, but again, these are professional traders making money 9 out of 10 times.

 

[dealmaker]

Quote from konviction:

Traders at any of the major Wall Street firms all hold overnight. So what's the difference between a professional trader at a prop firm compared to one at Goldman? Why does Goldman take the overnight risk while 99% of other firms won't?

I understand the overnight risk, but again, these are professional traders making money 9 out of 10 times.

I am with Echo, I am allowed to hold overnight and before that I was at Bright, you can hold overnight there too, thus it depends on the firm...

 

[zdreg]

Quote from konviction:

Traders at any of the major Wall Street firms all hold overnight. So what's the difference between a professional trader at a prop firm compared to one at Goldman? Why does Goldman take the overnight risk while 99% of other firms won't?

I understand the overnight risk, but again, these are professional traders making money 9 out of 10 times.

obviously you don't understand the risk if you make the ridiculous remark that professional traders are making money 9 out of 10 times.

 

[ofthomas]

Quote from konviction:

Traders at any of the major Wall Street firms all hold overnight. So what's the difference between a professional trader at a prop firm compared to one at Goldman? Why does Goldman take the overnight risk while 99% of other firms won't?

I understand the overnight risk, but again, these are professional traders making money 9 out of 10 times.

d00d... GS has $9b in equity for their prop desks last time I checked... I dont know of a single prop house that has that much... you should not compare apples to oranges.... and if you are still insisting, then you do not understand the risk they need to calculate... read about VaR on google books.

 

[JTMAN]

Most prop firms will let you take small overnights. The ones that let you take big overnights I would not trade with. Those firms are just letting you take big overnights to get your business. The next time a plane flies into a building your equity (and all the other traders) will be wiped out.

 

[galvinlee888]

Quote from konviction:

So what's the difference between a professional trader at a prop firm compared to one at Goldman? .

You are kidding or drunk ? Do you really believe a trader in Prop firm is equal as the one in GS ???? You ever work in GS or any "real" institutional trading desk before ?