I am a long-time retail futures trader who went prop at the beginning of this year. Before doing so, I read from front to back every single Trading Agreement I could get my hands on. Believe it or not, there are huge differences. In some cases, your liability may extend beyond your contributed capital. Do yourself a favor and read everything very critically...twice. It's your money and ultimately your business. Don't trust and assume. Due diligence is a must, and that contract is really all you have to stand on. In my opinion, it is a very good thing that contributed capital is somewhat insulated by cash on the balance sheet. But don't assume you'd see your money right away in the case of insolvency. Plan on lengthy court proceedings; everyone wants to get paid, and nothing gets disbursed until everything gets sorted out. As many others have stated, use only capital that you can afford to lose...or be without for a long time. There are some good firms and not-so-good firms for sure. I'm not stating which are which because each new trader has to decide that for him/herself, plus, I'm by no means an all-informed expert, so I can't necessarily say. Visit the offices, meet the people, form your own impressions, and READ everything that you are signing. In the end, that's your legal contract, and your only reasonable assurance. I hope this doesn't sound harsh or too judgemental. All I intend is to suggest that you approach this as a business. Opinions from each other are fine, but anecdotes and individual events will only go so far. These are tough times for many trading firms, so it pays to be especially diligent as you are choosing one. DaveN (formerly a financial controller--sorry, I used to do this stuff all day long before becoming a trader...)
1) does anyone have any opinions on any firms to avoid commingling funds with if you're going prop? 2) if one has a retail account and trades get dumped into it (easily could happen given everything is traded elecronically without tickets, or someone could logon to your terminal and trade away) is there any protection or recourse? has anyone heard of this happenning?