Kind of a long answer, but here it is : I have been trading "on the side", amatuer, whatever you want to call it on and off (mostly on) since I was 18. Basically I have been employed/running a business or in school (or all three) all of this time. Other than putting money back into my businesses, trading equities/options has been my primary means of investing during this time but it was never more than part-time. Frankly I never have amassed enough investmant capital at one time to really trade the way I want to so I have been limited to Etrade style services and longer term (days/weeks) trades. There is nothing wrong with this, but without a large stake ($500k+) it would be hard to count on it for income. Even then it would require signifigant time investment which simply hasn't been available to me. That being said, I have experienced much that trading has to offer. I have swing traded techs and options from the days when Charles Schwaab was the only discount game in town (it is very exciting trying to trade over the phone with an operator while watching a delayed ticker on FNN and trying to finish your thermodynamics homework!!!!) I was there for the internet bubble- turning $8k into $140k in 6 months then back into $30k in a week. I traded more actively after that- up to 40 trades per day on the side while working as an engineer, but went mostly nowhere due to commissions of $9/trade. That fact, and my new business of homebuilding (where I was away from the computer all day) led me to drop trading altogether about 3 years ago. I am liquidating my latest business (real estate) and leaving it for now, so I find myself with a time window of a few months that I can experiment with full-time daytrading, but still not enough capital to make it work the way I want. Basically I need to be able to trade 10-20k shares per day with manageable fees and min $100k BP. Prop-firms seem perfectly suited to this....
Yes, Remata offered me 20x BP and .005 commissions (plus liquidity charges). 3 different trading platforms. No series 7- no interview- seem pretty nice, but I have not signed up with them yet- still looking. Thomas Lanzana seems to be the guy there....
You should have no trouble finding several good firms that can offer what you're looking for. It's your money, no one should tell you what or how to trade. The firm extends you leverage and makes a profit on your commission. 100% of gains and losses are yours. Pretty simple formula. The deciding factor should come down to the firm's reputation, the integrity of the principals involved (there are some shysters in this business) and software- some is better than others and more suited to different styles of trading. The idea of an outfit like this "interviewing" is a joke. Maybe their way to make themselves look legit, I'd be leary of someone making you interview to basically open a brokerage account.
I agree with Lescor on most of this. We act as a facilitator and clearing broker, not employer. We do take the risk for any losses above our trader's accounts, and have had a few cost us a little money, but not many over the years. Again, simply the exchange floor trader business model. We may disagree a bit on firms that have some kind of disclaimer like this: XXX Trading is not a registered broker-dealer. XXX Trading is NOT registered nor a member with any securities regulatory body. XXX Trading does not seek outside public investments. XXX Trading is not SIPC insured. This is a compilation disclaimer from my Firms of Concern list, not meant to apply to any specific firm. Anyway, as always, and as most would agree, do your due diligence. Anyway, Happy New Year to everyone! Don
Hey Don, Thanks for the info. Your group was one of the ones that I investigated. Maybe I missed something on your website or do you offer these services but not advertise them ? Specifically your website says that licensing is required and that "This is a long term career, and should be viewed as such." So do you offer services for those not wishing to be licensed or commit to a long-term career ? Thanks
All of our traders have to be licensed, and we do cater to those who want to trade for a living. The casual investor/trader should probably stick with a retail broker, because overall it won't make much difference. All the best, Don (of course you can retire whenever you like, it's your business within our our framework)
NO prop firms are sipc insured. Seeking outside investments is a non-issue. IMO, being a broker dealer or a member of a SRO is not that big a deal. There are numerous firms that are stand-alone independents that operate completely above board and operate that way to save a lot of overhead and compliance red tape. How do you think all these firms nowadays let you trade without licensing? Requiring a license and being an exchange member sounds prestigious but doesn't make a shred of difference if the firm is solid or not. It's just a function of how it's structured. It comes down to primarily the integrity of the principals involved. If a couple chumps want to start a shop and rip guys off, they won't last long, not in this day of instant feedback and information sharing. If the firm you think is the best fit for you requires a license, then get one. It's a minor inconvenience at most. But don't be scared away just because a firm isn't a B/D. Just one guy's opinion though.