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mgrund
Registered: Feb 2012
Posts: 528 |
02-14-12 12:20 PM
Hi all,
I have been looking to join a trading outfit within the city. I have done a bit of basic research. However, I would like opinions on which are the better arcades to join as there seems to be a fair few to choose from.
All comments welcomed- both pros/cons.
Many Thanks.
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mgrund
Registered: Feb 2012
Posts: 528 |
02-15-12 10:22 PM
Quote from Businessman:
Desk fees and related costs really hurt in a low profit year.
I know a prop trader who made around 100K last year in london.
After desk fees, profit split, taxes, accountancy fees and paying his own rent+general living expenses he had nothing left over.
He literally needs to make a 100K in trading profit each year just to break even.
How many people can consistently perform under that kind of pressure.. its different if you have a few 500K+ years under your belt with a good chunk of it still banked, but most don't.
This is exactly my point, and purpose of my original post (although I have found the various debates interesting). Most prop traders in London understand the model inside out as you would expect. But, unfortunately the model is now a heavy hindrance. £100k trading account is roughly breakeven. As we all know markets have become far more efficient and far more sophisticated as has the machinery. We all tend to concentrate on the 4-5 markets we have always traded. Unfortunately, everyone else does the same. Many of the bigger traders have reduced their trading volumes and now more or less just event trading, hitting the market in size (and betting the house) on huge events, a strategy I've seen many times destroy accounts. I will continue to prop trade but I've now just started to test spread betting accounts. Not sure if you have these in the States. So far, very interesting. Thousands of trading options, reasonably narrow spread, speed seems fine (yet to be tested fully during high volatility), no desk cost and applied costs, and tax free. If all goes according to plan I may be able to stop getting the 5am train into the city.
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mgrund
Registered: Feb 2012
Posts: 528 |
02-24-12 04:53 PM
Swabber, thats my point entirely.
A newbie trading at an arcade on say a 70/30 split needs to be clearing approx £2k a week ( £100k PA) - to take home a pay packet of £30k after all the costs involved ( Desk hire,travel,tax,accountancy fees,splits).That is some good going to be clearing £2k every week of the year for a newbie.
Also,It sure is alot of stress to have that burden, bearing in mind a Refuge collector ( Bin man) for London Borough Council is on a total package of approx £38k pa ( Pension/healthcare/ 6 weeks paid holiday included).
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mgrund
Registered: Feb 2012
Posts: 528 |
02-26-12 03:08 PM
James, If I was you I would not accept any offer from Schneider Trading, my friend traded there and he left within 2 weeks.
They rely on so-called graduates and newbies to act as liquidity monkeys thereby lining their pockets when it comes to rebates and commissions.
They also want you to pay exorbitant desk costs you can easily avoid ... its all about plugging and selling their products. If any "graduate" or new trader on their program wants to know how they can do what they're currently doing for less give me a shout.
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londonkid
Registered: Jun 2011
Posts: 149 |
09-27-12 10:49 AM
Mr Grund 100% agreed. Paying 2k+ in monthly fees plus round trip costs is expensive unless a trader is netting 250k+ per annum it is prohibitive.
These days you can rent a desk in a prime London building tower42/gherkin/Canada square for £500pm. You can also get sub $1 CME round turns or sub 1eur round turns on Eurex with very little volume per month, certainly 10k volume per month this is possible. Plenty of traders are doing that per day and a tonne more.
Xtrader can be switched out for a free alternative if you don't need the features. For most point and click guys getting filled in 250ms is fine.
I understand a good prop is needed for some strategies but most don't require it.
Quote from mgrund:
Quote from Businessman:
Desk fees and related costs really hurt in a low profit year.
I know a prop trader who made around 100K last year in london.
After desk fees, profit split, taxes, accountancy fees and paying his own rent+general living expenses he had nothing left over.
He literally needs to make a 100K in trading profit each year just to break even.
How many people can consistently perform under that kind of pressure.. its different if you have a few 500K+ years under your belt with a good chunk of it still banked, but most don't.
This is exactly my point, and purpose of my original post (although I have found the various debates interesting). Most prop traders in London understand the model inside out as you would expect. But, unfortunately the model is now a heavy hindrance. £100k trading account is roughly breakeven. As we all know markets have become far more efficient and far more sophisticated as has the machinery. We all tend to concentrate on the 4-5 markets we have always traded. Unfortunately, everyone else does the same. Many of the bigger traders have reduced their trading volumes and now more or less just event trading, hitting the market in size (and betting the house) on huge events, a strategy I've seen many times destroy accounts. I will continue to prop trade but I've now just started to test spread betting accounts. Not sure if you have these in the States. So far, very interesting. Thousands of trading options, reasonably narrow spread, speed seems fine (yet to be tested fully during high volatility), no desk cost and applied costs, and tax free. If all goes according to plan I may be able to stop getting the 5am train into the city.
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