Anyone been successful with Generic?

Discussion in 'Prop Firms' started by CommercEngineer, Aug 31, 2005.

  1. Just to let you know, I've heard from several prop firms that this law about locking up your cap for a year is standard now. Anti-money laundering law written somewhere. I don't understand why this wasn't true before for prop -- it seems like a recent thing.

    But there are other ways around that if you do not use your license. I'm not sure how they work, but they seem to be legit since every firm I've called offered the same thing.

    So ask Generic if there is another trading option where you don't lock your capital or use your license. You may get less leverage, but it's worth it. Also yes, your current deal with them sucks. I know traders there that have a 95% or 99% payout and .0003 commissions (they likely do more volume than you though). Depending on how many shares you do, know that there is room to fight for a better deal.
    #21     Sep 1, 2005
  2. We talked about doing a retail account, but I don't have $25k cash which is their minimum for retail. I think retail there has 10:1 or 5:1 leverage vs 2:1 where I'm at now.

    #22     Sep 2, 2005
  3. the SEC rule exists for at least a few years. i know for a fact that inside Generic, some traders must abide by it and some do not. but i don't know how exactly this works.

    some prop firms, or at least companies that offer the exact same services that prop firms offer (e.g. Bright), do not lock your money.
    #23     Sep 2, 2005

  4. that is also a problem you must consider. unless you are already a heavy volume trader, the pressure to do high volume can destroy your state of mind and your account completely. seen it happen to quite a few traders. so if you are a small volume trader right now, you are walking into a death trap.
    #24     Sep 2, 2005
  5. 8-1 overnight is pretty good
    #25     Sep 9, 2005
  6. I second the commission free approach, when you put money down and you split 80/20.

    There is a lot more incentive then by the firm to work with you. I don't know if a commish free deal exists, but I second that notion.
    #26     Sep 11, 2005
  7. Well, you may do several drafts of and agreement with the firm. At least I would look forward to it. They make a proposal, you get it, edit it, send it back, etc...back and forth.

    Some things to consider in writing: buying power, commish, all in or not, any fees for software or not, margin rates for long positiosn, short stock rebate for short positions, their charge for "away" orders, capital lockup or not (and what is the timeframe), terms of the partnership agreement (since you are not really a proprietary trader, you are a professional using your capital, you need to know the terms of the partnership, thats usually a standard form they have to send you), when do they cut checks and when do you have to request, wire transfer fees,

    The list goes on and on. I tried to list what I remembered when I did this a while ago. But if you have a question, and they answer it with ambiquity, get it clarified somehow and add it to the agreeement.

    Generally you will be a limited partner and get a K-1. I would think a firm like Generic would do this. Then you will get a statement and all your trading is classified as ordinary income(loss), and you can itemize your taxes as a professional equities trader and then deduct your trading related expenses using 1040, schedules C and E.
    If you will get a 1099, is more of a pain in the butt. Plus all the taxes you have to pay for self employment...etc.

    Because you put your capital up, I highly doubt you will be a w2 employee...thats generally for a true prop arrangement only.

    Anyway, I know its not an organized answer, but I hope it helps.
    #27     Sep 11, 2005
  8. kztd

    kztd Guest

    That deal stinks, be prepared to put up $25k+ and get 100%.

    Don't assume commission will be reasonable, it won't be if u don't force the issue.
    #28     Sep 20, 2005
  9. if you go to echo, make sure you get the deal in writing.
    #29     Sep 20, 2005
  10. OH YES - i forgot about that one. get E-V-E-R-Y-T-H-I-N-G in writing. i (and others in my group) had the prop firm owe us $800 each, and we had to raise our voice and imply that we will go to court. only then we got the money back. prior to that, we heard 'you'll have it in your account next week' every week for about 5 months.

    welcome to the prop world. they sweet talk you to 'trade and make millions' but won't return $800 they legally owe you. PS this wasn't Echo but it was another large and famous prop firm.
    #30     Sep 25, 2005