The only thing you need to do to get an "open only" execution is to put in a market order before the stock opens and you are guaranteed to participate in the opening print. The fair value arbitrage strategy you've talked about on the Bright thread seems to be based on limit orders put in before the open that are immediately cancelled if not filled with the opening print. With respect to executions everybody, professional and non-professional, is treated the same at the NYSE. Information about MOO and MOC order imbalances is reported by Reuters and Bloomberg among others.
First of all I work for http://www.worldcollc.com so I may be biased, but it is not even a contest. I can see a very experienced day trader wanting to work at the comfort of home but for new traders you gotta go LLC (unless you are the lucky few who can work for a big firm's trading desk, without an Ivy League degree you gotta start with a LLC) I have been trading for 8 months (turned profitable 3 and 1/2 month), and I am given 1500 share positions and 12 positions, plus a 92% payout (and IB commission rates). Keep in mind I do not have a degree, only 21 year old and there is no way in the world I can get that kind of capital on my own. The fastest way to build capital is if you have access to a large amount of capital, and most new day traders fail because after they lose 10-20K or so their trading size is severely limited, frustration compounds, pressure builds up, and you are out of the game. My firm takes huge pressure off your back because when you are losing your shirt you are NOT losing your own money, and you still have the resource to trade big sizes to make it back . . . I was getting nowhere when I first started, then I met two (relatively new but more experienced than me) traders who were willing to share, quickly I made adjustments and started to make money. There is no better feeling in any job when you have a trusty teammate who can come up with big plays when you are on a cold shooting day . . . A firm provides you a pool of talents to work with, and a lot of potential mentors . . . Throw in technical support which takes a lot of burden off your back, and bullets/conversions that gives you a HUGE edge, it is not even a contest, trust me . . . P.S. I also like Schoenfield, but their payout is too low . . .
i don't quite understand the deal these LLC's offer their traders: you don't have to put up any capital yourself, you get to trade their capital and RT costs are very competitive. yet they offer payouts of 92%... so how do they make their money?? cheers
Commissions, commissions, commissions . . . YTD, I have generated a gross of 75K, yet my P&L after commissions is $36K, that's nearly 40K's worth of commissions they made from me alone, and I am a small potato compared to bigger traders. It is very common for my firm to offer its top traders 95-100% payout . . . It is commissions they are after . . .
One more thing, the firm is not stupid, they require you to eventually have 35K in your firm capital account (which is your money, you can still withdraw it), every check I get, 50% is taken out of it and stored in the firm capital account until I have the full 35K. I was getting there early April then the market got tough, didn't make adjustments in time and had a couple of blown out days . . . So I will probably be getting 50% pay checks until September (Can't see myself making much more than a few K a month June-August). The top guys at this firm all have six figures in their firm capital account, that's how they are given 10000 share 50 position type of DOT limit, so basically, it is a VERY VERY profitable formula. The firm really is only at risk during the early stage of a trader's career, but given the small number of shares they start with (I started with 100 shares 2 positions) it is not likely they will dig themselve a big hole. A friend of mine just quitted after been here 10 months still down 10K, but it is almost entirely commission, so the firm takes very little risk and makes a tons of money . . .
thx for clarifying. but am i right in thinking that they offer low commissions, ie their profits don't necessarily come from rip-off high commissions but rather from depending on heavy volume round turns? if that's the case then cost wise you're not worse off than a private trader with eg IB as their broker, but the advantage is that you can start trading even if you don't actually have any capital yet plus you probably don't have to spend any time worrying about hard- & software plus charts etc etc? doesn't really sound like a bad deal.
Hitman: I'm located in New York and interested in joining a firm to learn to day trade. And, yes, I graduated from an Ivy League school; however, that was 20 years ago! As I see it, the only way I can land a position as a proprietary trader is thru a referral. BTW, I'll be taking the Series 7 this summer. What I'd like to do is network with you and others who are connected with proprietary firms, if you don't mind. Anyone reading this post that has an interest, please feel free to respond. TIA, Ron
VVV, Hitman is right. The prop firms make money with the commissions. At Hold, Prop traders have several different options on payouts with a top of 98%, a low of 30%. It depends on what commisions you want to pay. prop traders on general pay more than customers. I have paid over $200,000 in commisions and the firms split this year to date. I have still taken home a nice chunk of money for my first year trading and my first job outside of college. The firm didn't risk much, I only lost a little over 5K while learning and then upped my share volume and made that back in 2 weeks.
MJT Graybox cme out last year, and I started on it in September. It was called Otrade at first, the name has since been changed. We have the REDI and ARCAs set up for fill or kill, or to preference, and soon, one server will be set up for ready to work just like isld, where you can go out and hit a redi without it trying to prefernce MMS at a better price, and if you miss the redi, it will let you cross the market and post. They might only let remotes use a server where REDI is only fill or kill. As far as your smart order routing, Graybox does have a smart key, yet it works diferrent than you want. You have to set it up with the MMS or ECNs you want it to hit in the proper order you want it to do so. As far as the Selectnet box, I use it for everything. When you pull it up, you will see the ECn bar below the # keys. When you use your right/left aarows or your tab key(depending on your preferred setup), the highlighted box will move right or left along the various ECN options and hitting enter will send an order to whichever one is highlighted. What I usually do is use the ALt 1 function that will blast out all ecns at the preferred price or the CTRL 0 function that will preference every marketmaker and ECN showing at the level you choose. When I want in a trade, I blast the hell out of it until I get what I want, and then I usually use isld or inca to offer out, unless it turns on me and I want to get out and get short, then I blast back the other way. I really like those functions. As far as your shorting questions, I don't ever deal with that because we use long term hedges and bullets.