Would like to hear some comments on people who have or have attempted to prematurely sever their prop trading agreements, either with monetary provisions, time provisions, or any other restrictive covenants. How has your former firm responded? Has anyone tried to take legal action against you? Im sure there are plenty of stories out there. Thanks !!!!!!!!!!
ITS ALL BULLSHIT.Firms say they will sue and it never happens...why because its non enforceable..as well most traders are independent contractors means the BD has 100000% no recourse so go out and make a living and screw everyone else. momo
Not sure that this is the best advice. I have experience in this and I have traders under contract. We can cut through a lot of rif-raf if you just explain your contract provisions and situation. Although many firms might choose to not enforce a contract, a firm can easily make it very very expensive for you to fend them off by forcing you to hire a lawyer and waste time. Many firms also have a lawyer on staff, so their cost is the same. It all depends on the circumstances and your contract. Also, your contract in many cases can be forwarded to a collection agency and can have a devestating effect on your credit. This, again, is costly to fight. So before you decide to walk out and flip the CEO the finger, you have to look at your particular situation. You will likely never pay the firm a dime, but the cost to avoid that may be prohibitive. Some firms get a kick out of these kinds of fights. Good luck.
futurestrader is right..leaving on bad terms can cost you in the end...most of the time it doesn't happen,but you never know...the easiest thing to do is just approach the owners and explain your situation..if that doesn't work you can always take legal measures...good luck...and remember, at the end of the day the money in your account is yours..don't let anyone tell you otherwise
Kudos to you. Never understood the prop thing. I understand partnership and trading with friends in a cool office. But the word prop doesn't sound so exciting. ozzy
what contracts are you referring too?give me an example of who signs a contract. if i put up 5k and have 100k leverage a prop house do i sign contract? what do these contracts say?
If you put even $1 down, then you are in an arcade. This is not true prop. Proprietary trading means you trade the firm's funds only and incur no risk. The risk is the firm's and you get a commission on your profitability. It is that simple. Anything else is an arcade. I wanted to make that clear so we are using the right nomenclature
i have never heard a stock trading firm referred to as an arcade...maybe that is a british/futures term.
It's typically got non-compete language in it. Over the years, I've seen a few instances where a trader left and the firm he left tried to enforce the contract. The two that I remember had the same outcome... the new firm had to pay the old firm a bit of cash (I'm thinking less than $30k). This was to keep the thing out of arbitration, and to get the trader's licenses freed-up. Both times, it took them a long time to get U-4'd at the new firm because of said contract. That said, this was a couple years ago (4?), so maybe things have changed.