Any firms out there that are created for position traders

Discussion in 'Prop Firms' started by sltrader, Apr 15, 2008.

  1. sltrader


    It seems like most prop shops are focused on intraday trading does anyone know of any firms that consist primarily of traders that hold positions for several days, or weeks?
  2. I'm interested in this as well. It would seem to me only the bank props and hedge fund props handle that sort of trading.

    I'm open if there are some though.
  3. sltrader


    i came to the same conclusion it just doesn't seem to be in the interest of these firms to promote this type of trading since the firm makes a lot more collecting commissions from hyper active daytraders
  4. We all "day" trade (openings, pairs, etc.), but most of our people keep positions at most times. Not so many with pure directional type holding of naked positions (some do, not too many overall however)....but most keep positions.


  5. Don

    Have you considered opening a desk where it's more positionally-based with a larger profit share? Similar to the hedge fund model.

    General idea could be 50/50 profit share or whatever - I haven't worked any figures. It would seem like a good idea and a chance to diversify the business model. There are some excellent position traders that would create a great synergy with the day trading desk, risk-wise.
  6. Bright offers 100% payout. Are you looking for a staked-relationship?

  7. Just doing a little spit-balling. I'm thinking more of the trad'l hedge fund structure. Why don't prop firms such as yours expand by opening a hedge fund-structured office. My thought process is the following:

    When the firm's main stream of revenue is from profitable trading and not commissions, both trader and firm are in better alignment. It creates more of a win-win.

    Firm owners earn more from profitable trading than commissions if they have good traders/investors. Keep the entrance for trading strict - similar to a comp package I mentioned earlier.
    Trader is on 2-3 month probation period when they start. They earn something nominal, $1,000/month or whatever. If they show their merit over a 1, 2, or 3 month period of time they receive a salary of $40k with profit-share of 50% of their output, or whatever (move the figures as desired).

    Your company becomes more diversified because now you're not just relying on day trading commissions but actual profit-generating position traders.

    Just some thoughts.
  8. sltrader


    I agree seems like first new york is the only place that is really created for position traders and that business model seems to be more beneficial for traders or people that want to learn to trade, why is it that other shops have not followed their business model? It seem to me that most prop shops prefer taking no risks and getting a steady flow of income from high volume intraday trading...that is how their business model is structured rather than take more risk and potentially make more money by capitalizing on the synergies created when everyone has the same interest in mind
  9. Midas


    Many of us trade longer term timeframes as well as day trade at prop. firms. No firms that I know of restrict your from trading longer term. It is up to you. You are given more capital (leverage) with shorter time frames or heged positions due to the decreased risk.

    Your suggestion in theory sounds like a good one, however, once you begin to make money trading why would you want to share your profits with the firm? Keep in mind hedge funds and firms like First NY still pay commissions.... Why give up a % of your profits on top of that?
  10. That's a good question. I'm just a fan of interactions where two parties are acting toward the same goal. It ensures more trust and commitment to success. Also, a firm would probably receive a higher caliber of entering trader if there were a salary instead of a draw or nothing. If someone is a great success trading on their own and they have the capital to do so at an elevated level, then you're correct to say it would make no sense for them to join a place as I've described. However, from the business owner's viewpoint I believe it would make more sense (if you're accepting new/unproven/relatively novice traders) that you get some of the better ones by offering a salary and further legitimizing your firm.

    One of the biggest stigmas in the prop firm area is that they're making the majority of their money from commissions and not quality trading. In fact, it is in their interest for you to be good but not enough in their interest to create the synergy that a hedge fund experiences.

    #10     Apr 16, 2008