My cousin trades for them at the 57th Street location. He trades his own account there. I trade for ETG
Closing up the whole prop business. What a bunch of scumbags, they were signing up groups and taking deposits as recently as a month ago. Youwould expect this from some fly by night bucketshop but not from an Etrade.
If they were losing their deposits, there would be massive lawsuits against these people. And I would have heard it from my cousin.
Deposits are gonna be returned to prop traders in a week. The retail traders at E*Trade Professional are fine and will be up and trading on Monday. Gonna be a big meeting on Monday to give all the prop traders in all the offices info on everything. I thought the sub-LLC's would still have prop traders and they would just shutdown the wholly owned branch offices because of the high overhead for those offices but I guess that ain't the case. I was worried about other firms because with the suspension of the uptick rule, other firms have for the most part lost big money makin devices such as conversions etc. That is a big blow to their bottom line. I am still in shock because I thought E*Trade Professional would be one of the last prop firms standing.
nobody's losing crap. i pulled out 200k yesterday and it was in my account the same day.i trade retail. etrade simply is going the way of assent and many others. they don't want to fund prop traders and carry the office notes anymore. the guy i was under was scrambling to keep the office under a sub llc and move all his people udner him. yesterday he told me as of the close today he would no longer be an employee of etrade but had negotiated to stay with them and have the traders stay under him with an llc. he was pissed as he got shafted by heartland 2 years ago and was tired of jumping ship. i like there software and i felt comfortable with a big company but i'm looking around now and if things settle down and i get the rate i'm lookign for i mgiht stay. i'm shocked they've not sent and email out saying anything
Unlike other firms E*Trade Professional doesn't pool prop trader's deposits together to use to leverage. They put each prop trader's deposit in its own account as a lien against the individuals losses. Traders are really trading one big account of the brokerage's own money. Maybe E*Trade Financial Corp. wants that large amount of money in that account that prop traders trade from to use towards aquiring another firm ie. Schwab or Ameritrade? They also sold their entire stake of stock in Archipelgo recently after it ran up on it's NYSE merger news. These two events give E*Trade Financial Corp. a lot of cash on hand, that could possibly be used for an aquisition. Considering we have all lately seen M&A of ECN's and exchanges and lots of talk and rumors of possible M&A in the discount brokerage industry, this might be a reason for why they closed their prop division. To use the large amount of cash from the division to use towards an aquisition. Just a thought. Otherwise I can't figure out the business rational for closing the whole prop division altogether if trader's are putting up deposits against loses and if they got out of the office leases and let the sub-llc's pay for their own office space. They just lost a huge amount of clearing volume by shutting the prop division down. And volume is everything in this industry.
it's funny. when i was negotiating my deal a year ago, i asked what the desk fee would be. e*trade was like "desk fee? what desk fee?" lol. as retail, they weren't gonna get a piece my action, so at least charge a desk. i used their office, computers, t-1 lines, 2 squawk boxes, satellite tv, coffee, fax machine, phone lines, copy machine, bathrooms, and electricity, and only paid the $50 for the nasdaq feed, $50 for NYOB, and $30 for futures. i traded under 10,000 shares a day, so they barely made squat off of me in commissions.. and they had to split that with my sub. i guess the lack of that desk fee revenue, plus the ultra-high midtown manhattan rents is what did them in.