Hello Elite Traders, Why should someone be a professional trader ? They have to pay extra for quotes and be heavily regulated as oppose to stay as non-professional. I have been trading part-time as non-pro for 8 years. Have been consistently making profits in the last 2 years. Should I go as professional ? (By taking series 56 and join a proprietary trading firm). Or should I stay as non-professional and avoid the costs ? I hope to trade for living someday. Thank you for your kind thoughts.
"Going Pro"... only worthwhile if you can leverage your efforts with OPM (Other People's Money). If you can raise $50 Million minimum, charge management and/or incentive fees, then by all means do it. If not, work the math. The regulatory burdens and costs of being "pro" are significant.
Perhaps not so easily. Data providers want you to pay pro fees if possible. You'll have to convince them you are no longer pro.... don't know how difficult that would be.... after all, many will lie about their "pro vs no/pro" status to get lower fees... and providers will try to not let that happen. It's not exactly like, they "just take your word for it" when money is involved.
Watch-out....many prop firms have lock-up clauses in their contracts that prevent you from withdrawing your original deposit and/or accrued profits....sometimes for up to one year of time !!
Yes, once you get your "U5" form in the mail, you are no longer considered a "professional trader" and hence you can indeed "easily switch back to non-pro." It doesn't matter if you have a Series 56 license, since the license would remain dormant until you either joined another prop firm, or just let it expire.
Actually, they do take your word for it, since you have to sign a form with the exchanges indicating if you're pro or not. However, the basic criteria is if you're a registered member with an exchange. Once you leave a prop firm and obtain your "U5" in the mail, you are no longer registered, and thus no longer obligated to pay "pro fees" to the next provider you join (in the case of opening a retail account, for example).
It depends on your capital, your strategy, and whether you are currently daytrading or holding overnight. Most Series 56 props won't allow for overnights, it's strictly intraday.