SIPC: The earlier thread about SIPC protection brings me to write this. There really is no SIPC involved in a Proprietary firm, SIPC is only for retail customers (protecting the widows and orphans). Since traders become members of the Firm, which allows them all the privileges and advantages, the SIPC is not really important. As far as keeping your capital "low" in your trading account....that is a personal choice, since you pay interest on overnight positions based on your capital. And if you think about, why be concerned about $10 or $25K, when you have Limited Risk and an unlimited upside. If you make a few hundred thousand per year, take it out if you like, your firm should be well capitalized enough to not care. We actually prefer people to keep their accounts at the minimum, that way their overall risk parameters are much lower, which protects everyone. I do agree with the person who said that you need to be concerned with the firms stability and financials. Always ask to see a Balance Sheet! This is a fundamental business practice that should be exercised by all.
Don, You mentioned in another thread that the owners of Bright always have 10 million of their own capital up in front of the traders money. I assume that is the type of thing I should be looking for in researching firms. Is that 10 million written into your operating agreement or is that a verbal committment? Do other firms (Echo, L&W, etc) do this too?
Could anyone shed some light on my previous question. What should be the ratio of frim money to trader money in an llc to feel protected? Does Bright have it in their LLC that they keep up a minimal of 10 million as he suggests? Is there anyway to determine when discussing joing a firm how much of their capital is firm and how much other trader?
Any trader should carefully review the balance sheets of any trading firm prior to signing anything. We keep it simple....the "class A members" (owners) keep a minimum of $10million (usually much more), and the "class B members" (traders) put up their $25 or $50K or whatever. That way, if there is a problem with an errant trader, he/she would have to lose their capital plus $10Million of ours before any other trader was impacted (and we like our money!!).. In all seriousness...check, check, check! There have been so many horror stories about firms keeping traders money, using traders money as their own, and firms going bust with the traders money. If the "owners" don't have at least 40 or 50 times the traders minimum at risk themselves, then I would re-think joining up. And, don't worry, the better firms do have that kind of money.
www.interactivebrokers.com Interactive broker offers very competitive commision; Stocks: $0.01/Share <=500 $0.005/Share >500 Either Bright & Echo! Do you have any plan to give better commision rate as same as Interactivebroker?
Does IB have any plans to allow free use of capital, and true exchange access to their customers? I doubt it. IB is a good firm, and the only firm that I have recommended to those who simply want to stay put as customers of a brokerage firm. Those who want Proprietary trading, along with the advantages offered, need to make different decisions. BTW, I am told that there is a firm in Texas who beats IB by 50%..does anyone know who that is?
IB does not offer under those rates, professional services like the other firms specializing in Pfsnl trading. Those rates you quoted are for public customer accounts, and are essentially moot if your account is below $25,001 and you execute more than 4 trades in any one week (hence SEC Pattern Day Trader exception).... please research your questions and facts before posing them. In this manner we will have the higest degree of respect for your comments/questions....
under the general heading of "you get what you pay for" some ways that these firms achieve little or no commission basis are: 1) statements must be generated and accessed online, hence no mailed statements or hardcopy from the firm -- your responsibility 2) changes, challenges and corrections to your trades, account charges, balances, credits of interest earned are best left as they are -- hence there's little to NO ONE at the brokerage office to answer the phone, let alone care that some 2,000 customers are all calling on that specific day 3) selling order flow -- remember those guarantees of 60sec executions or the trade is free? -- its never free but you're never satisfied with the execution getting what you pay for is only reasonable. The industry has set some very high standards which the customer basis has become accustomed to. competition for pricing is eroding those time held customs of print statements and soforth. I'm suggesting asking hard questions before you relegate your highest level of determining factor to PRICING alone.
I am in total agreement about pricing not being the only, or the primary, consideration. When it comes to retail trading, the distinctions pointed out above are vital (especially the selling of order flow, partial fill costs, etc.), but since the Internet access is pretty much the same, the costs seem to be more important than access considerations. You mention other problems that I have not really experienced (since I don't trade retail), and yet I am sure are very important if they occur (lack of response, etc.). Since the new guidelines came into effect we have noticed a big surge in new traders that figure "why not trade proprietary if I need $25K anyway", and then the priorities change somewhat (since most of what they were concerned about does not apply at this level, i.e. ticket charges, selling order flow, sheets, and all of that). Price is important, but certainly not the only consideration. And remember, first and foremost, you need to have a good solid firm behind you.
I thought this would be the most appropriate thread to post my personal comments in regards to Bright Trading. I have not worked at any other Prop firm so I am unable to comment on any others. I have noticed a few negative comments posted within several of the threads in regards to Bright Trading (none too recently however). I thought it important to briefly share my view if for no other reason than to keep the scales balanced. I traded retail for about 4 years on a part-time basis with the intention of turning professional many years down the road. I didn't even know that Prop firms existed. When I learned that Bright was opening an office 30 min from home I did some research and made the decision to join the Firm. To be brief, it is the best career decision of my life. Bright Trading has given me an opportunity to do what I have always wanted to do without taking 10 years to save up sufficient capital with which to trade. So far I have nothing but positive things to say about the company and it's management. I'm sure that there are offices out there that have a few problems but the office I am in is by far the most positive and supportive environment I have ever worked in. If anyone has complaints about their office or how it's run I would have to ask what they are doing to make things better. Most of the negative comments I see in regards to hardware/software problems, low morale and unreasonable fees are simply untrue. Trading with a Prop firm in my view is nothing more than an opportunity. You can either spend time complaining about every little detail or spend time having fun and learning to make money. I'm sure that there are many good firms out there and some may offer things that others don't but choosing which firm to go with has to be a personal choice. I am happy with mine. Daryn