Confused about prop firms and prop trading terms

Discussion in 'Prop Firms' started by aradiel, Oct 25, 2008.

  1. aradiel


    As a brazilian resident, I am curious to know how the business model of prop firms work since we don't have any of them down here.

    As far as I know, proprietary trading in invesment banks consists of desk operators trading the banks money instead of clients. But after lurking around some threads here I got the impression that what prop firms basically do is to lend money to their clients so they can get more leverage than in a retail firm. Is it how proprietary firms really work in the US or did I get it wrong?