Good story. Credible. Good to hear a success story. Did Bright Trading have clean bathrooms? Were there any traders with pink eye? Hehe.
All this talk is like a baby that's babbling. Somebody should make a black list and white list of prop lite firms. Black list would have shady prop lite firms and white list would have "legit" prop lite firms. We used to do this with NYSE Specialists. We never sent our orders to specialists on the blacklist b/c they screwed us a lot. So, make a white list of prop lite firms to weed out the scammers. Problem solved. No more talkIng and arguing about training, training fees, risk deposits, and so on...
Hey Steve, Great Idea Here is the criteria I used to create my white list. My view of prop firms is that they are there to provide a service to you; not, to make you successful. So, the important things are trading platform, commissions, speed of execution, support and the most important thing...do they payout regularly and do they return capital in a timely manner. The firms on my black list are ones that I have heard it is hard to get your capital out (not talking about 1 year lockup which is an accounting law from the IRS that some firms have to follow per their setup). White List Bright Trading Maverick Trading Echo Trading Vtrader Cy Group Black List Ifund VCM Team Trading (anyone see a recurring theme here?) Maverick Trading and Echo trade more than just equities which is why I am with Maverick as they let me trade equities, equity and index options, futures and futures options and FX. At echo I think you can only trade equities and equity options. I believe vtrader lets you trade multiple products but you will have to contact them for that info. Bright and Cy are equity only. Remember they are providing you a service and your trading is what will make you successful or not. Go into this business understanding the business model.
I'll give it a shot. I've been with echo for a long time now and have no complaints. No lock up, 100% payout, etc. There is a desk fee, but they waive it if you do enough shares. Not to mention the fact that they are nice folks who will work with you. What I really like about them is that they have become very strict on their risk management, and buying power relative to account balance. God, I can't believe what our team got away with before. But no more. Extremely low risk now, as far as a rogue taking the whole thing down. But I got a call the other day from a company called Tradeco. Never heard of them, but I thought I'd listen. 95% payout. No license needed (well, I already have one), a low deposit, and 15X buying power. I tried not to chuckle as I was listening. But after I thought about it, if I was brand new, couldn't get my license for some reason, had little cash, and just wanted to break in, why not give it a shot? I don't know. Seems shady. Gotta go black on Tradeco for now. As far as Echo, gotta go white. No bad experiences at all after being there for years. I get the idea Bright is the same way.
Share some risk? Do you plan on losing money while getting this lower payout? If you're good, why do you care?
Because the risk managers who work at these pseudo props do a fantastic job at covering it's customers at market tops and bottoms. I've heard stories of places which promise 40:1 and then re-adjust to 3:1 just when their customer books are overwhelmingly one sided on that particular security and their buyside prop books are on the opposite side.. and need "support" while their customer equity drops to levels which forces the prop to cover margin on their own positions. you get the picture.. if they're not sharing risk, they're against ur risk. it's a conflict.
All I can use is my gut and brains based on damn near a decade of experience. I have never experienced anything remotely close to these worst case scenarios you keep coming up with.
Exactly. I traded prop with a firm that eventually went belly-up. It took 8 weeks and a lot of legal work to get my deposit back. Yes, their technology was also crap....didn't support stop orders of any nature (local, server, exchange). Then I looked for another firm.....and I came across the SAME PROBLEMS....outdated or unsupported software platforms, capital tie-up, high commission rates, no options allowed, etc. I got so suspicious I had to visit the shop in-person. When I did that, what they SAID WAS GREAT, but when I got the written agreement in the mail, IT WAS DIFFERENT !! I gave up looking and went to IB. Now I'm about to purchase the Multicharts Platform for high frequency forex trades and to also do some discretionary options plays.
Maybe places you've traded at are exceptions. But I do speak of this behavior as something that happens often. Does your firm get happy when you make. Doubt it. It's simple math.. Out of the tens of thousands of accounts these firms have opened, 90% close out after less than a year or two. Who wouldn't trade against those odds.