Just an observation from some that knows nothing of "Prop Shops". Prior to visiting this site I would have though a prop shop was some kind of repair shop. What I think some people are missing is the whole concept of Mr. Bright, or whomever, giving the novice trader an opportunity to learn and perhaps make some money trading. Maybe some very good money to some people. Lets have some perspective. Not everyone is a major player. Earning 50K a year trading might be a dream come true for some, myself included. Take a avergae guy like me. Age 54, part time trader, full time Joe Lunch Bucket. I make about 60K annually. To make that, I work shift work, weekends, holidays. Hell, I'm at work right now.....midnights on a saturday night. Now you tell me all I gotta do is put up 5-10K and some will give me the chance to earn 60K trading....where do I sign up? Now I don't know all the specifics and I'd be willing to bet somewhere down the line I'd have to put up some more cash than that, but it still seems like a pretty good deal to me, especially for a younger person. You could spend a hell of alot more for a hell of alot less opportunity. As a sidebar. Any young person considering this should go for it. Fuck playing it safe. I played it safe my whole life and here I am working midnights in a fucking factory, too old to take big risks now.
Yep. 0.01 < 1000 shares 0.004 > 1000 shares + SEC fees This maximizes the commission since most traders will scale in/out and pay 0.01 per share It's sad when a retail firm like IB with 0.005 per share all-in can beat a prop firm. And there is no volume requirement.
Is this a non- pot committed vs. a pot committed argument? By the way, there are plenty of McDonald's and Subway franchise owners that started off with squat and either bought there franchises with corporate subsidized loans or bank loans. Anybody now of a bank that will loan money to prop trade?
Exactly Steve. I dont understand the heat Don is taking for his overpriced business model. He's upfront about it. You either understand the business context you are in, or you'll get ripped a new one. I would never trade with Bright. Simply because at the end of the day it's all about bucks. Mr Leverage and Mr Vigorish will always be key. And as far as "safety" goes, Bighitter has a point. If you can trade, you can trade. With 5k or 500k. And if Refco can go down, so can Bright, Genesis, or anyone else. Sweep your freaking account. Regularly. If you need more than 4:1 retail leverage, grind it out and build up your equity. You'll be a better trader, have a greater illusion of security, and be more able to deal with pro leverage. Because once you get a taste of future- like leverage with equities, it's a flavor hard to resist. Coupled with sub .004 rates? Good luck. If a prop shop cannot match IB's rates and keep a straight face, that is all you need to know.
OK, I guess I better do the ol' "clarification" gig again here. Rates vary...the absolute most a member of BT will pay is 1 cent, seasoned traders start at a significantly lower rate...and volume traders pay less than half that. All traders at BT pay .004 for over 1,000 shares on any given order. You can use your NYSE rate (above) and either pay for or receive rebate for liquidity on ECN's if you so choose. We all pay SEC fees. "Overpriced business model"? hardly, and the proof is simply that so many traders have returned from the "cut rate" "can't use capital" "no overnights" and my favorite "where's my money" type trading firms. Safety and Security? We put up 100 times the maximum SIPC with the traders money, yes, our cash of $10million (plus all of our "A" member capital is intact as well). I keep track of the overall fees at other firms, especially when traders move to us from them...and I can assure you all that when everything is considered, no one is getting over charged here by any means. As I've said to so many lately on PM's and posts, just "do the due" (diligence that is, LOL...sorry, couldn't resist), and you will simply make a business decision based on facts vs. the rhetoric from a chat board, no matter how much we love ET, 99.9% of the posters are "anonymoose" (isn't that "Bullwinkle's" cousin?, LOL ). BTW, glad to see a pretty civilized discussion, and once again "all you have to do is ask" - it's not me starting all these Bright Threads - I think my name is thrown around enough on ET as it is, but, I'm always glad to help clear things up when I can. All the best, sorry for yet another long post.. Don (no "anonymoose" here, LOL).
so don you're saying high vol traders pay 1/2 of 1 cent a share or .005 for the first 1000 shares? how do you say thats as good as most firms? ask all the guys from hold and echo on here what they pay. i've talked to tons of them and the going rate from these big firms is .003 or less per share and tons of buying power.
I know a lot of guys that do. In fact over half the traders at my firm keep at least that much. Do you really think you are going to make serious money (1 million to 10 million) keeping 5k in a prop account. If you do, you are basically committing yourself to a lifetime of mediocre earnings. It also forces you to leverage yourself to the hilt every single day of your life. One of the things you learn in this business after you have been in it awhile is it takes money to make money. Not leverage, MONEY! There is a difference. You need to be able to withstand the drawdowns. Leverage does not allow you to do that. At some point you need to have real cash behind you. That is why guys start hedge funds. You want to be able to make real money with as little leverage as possible, not as much. Think about it, would you rather take home 50 million a year making 10% to 12% a year or take home 500k to a million but having to earn 300% returns to do that and exposing yourself to a catastrophic risk every day to do it.