Ive been trading for many years, on my own. Ive seen employment ads and heard about these firms. I just dont understand the benefit of trading with a prop firm. do you just invest in what the tell you to invest? or are they just cutting commisions for percentage of gains. whats the point?
LEVERAGE on your money. Most will give you at least 10x your money versus 4x intraday in the US customer.
That is about it, but also, it's more than likely easier to negotiate your rates than being stuck with a set rate with retail. Leverage + commission negotiation + good trader = good deal
market maker position?? trading prop means trading someone else's money and getting a certain percentage of your profitablity. that's all...
If you are trading on your own through retail, you are handcuffing yourself when it comes to margin unless 4:1 intraday is enough for what you want to trade. Otherwise, unlimited or huge 50:1 intraday margin is useful and you go prop. The ads you see are mainly trying to lure beginners to train and churn and if a few make money, power to them.
depends how much u got into u retail acct...i wouldn't deposit more than 5k anyways with a prop firm since it can be wiped out if it goes belly up or has other serious problems..therefore if u retail acct is well founded. i.e more than 100k, u have good leverage; certainly enough to make a livin' and the same u would get with a 5k prop acct, can keep all of your profits and sleep better at night, innit.
LIke I said, it all depends on what you are trading and how much capital you have. If 4:1 or normal futures margin is enough, you do not need prop really.
Yes, but there's one major difference between prop and retail. in some prop arrangements, you may only lose up to your deposit and that's it. In retail, with margin, you could be looking at serious liabilities (more than what you put in) if a market catastrophe occurs. In prop arrangements where the trader is backed, the trader is exchanging part of their profits to limit their risk in special circumstances where you are not able to exit your trade to limit losses (e.g. during a stock or even market halt).
do prop firms give you 10x with overnight holding? if not, how much can they give you? the 4x extended by most brokerage firm's margin dept cannot be held overnight.