why prop and not futures?

[windsorphd]

what prop firms trade futures?

 

[Maverick74]

Quote from llRoninll:

Wondering why one would trade prop, give away some of their profits (up to 65%+ in some cases), rather than trading futures at home which give you great leverage with low costs. It seems that energy futures, gold futures, nq, etc have great intraday moves, there is no uptick rule, get out of your position with ease compared to a stock that is moving against you. With as little as $2000-5000 dollars in your account you can be trading hundreds of thousands in capital.

What are the advantages of stock and the disadvantages of futures because it seems that futures are a good option over prop trading.

One of the advantages to trading futures prop is the fact that you can hold overnight positions and trade more longer term while at the same time trading intra-day. Most traders will use up all their margin in a retail account if they hold a position for days or weeks. This prevents them from daytrading.

But in a prop account, you can hold positions, and at the same time trade stocks or futures intra-day without worrying about margin issues. This is huge for most traders.

 

[whoknows?]

Maverick,

Who are the Futures props? I can't seem to find any.
Anyone that does futures and equities?

Thx.

 

[Bonpara]

Swift dose futures tradeing as well as equities from newyork LSE and soon from TSX. Althought you cannot hold overnight

 

[doli]

I wonder whether, in the U.S., there are regulatory/reporting considerations that make it difficult for prop firms to engage in futures trading.

 

[syswizard]

Quote from doli:

I wonder whether, in the U.S., there are regulatory/reporting considerations that make it difficult for prop firms to engage in futures trading.

Doubtful. It's mostly a matter of paying for the data feeds and then getting much less of a "cut" from the commissions.
Bottomline: It's not that profitable for them.
Also, surprisingly, no one brought-up the favorable tax treatment of futures profits vs. equity/equity option profits.

 

[Maverick74]

Quote from whoknows?:

Maverick,

Who are the Futures props? I can't seem to find any.
Anyone that does futures and equities?

Thx.

There are countless number of prop futures firms. In fact, there are more prop futures firms then any other type. You can usually get a list by going to CME's website and look at all the clearing members. They are all listed. Not to mention they are talked about all over ET.

 

[Maverick74]

Quote from doli:

I wonder whether, in the U.S., there are regulatory/reporting considerations that make it difficult for prop firms to engage in futures trading.

No difficulty what so ever.

 

[Maverick74]

Quote from syswizard:

Doubtful. It's mostly a matter of paying for the data feeds and then getting much less of a "cut" from the commissions.
Bottomline: It's not that profitable for them.
Also, surprisingly, no one brought-up the favorable tax treatment of futures profits vs. equity/equity option profits.

Excellent point. Less taxes, cheaper commissions, no BS fees.

 

[risktaker]

Favorable tax treatment doesn't matter when there are mostly losses in the futures game.

Quote from syswizard:

Also, surprisingly, no one brought-up the favorable tax treatment of futures profits vs. equity/equity option profits.