Heres a question about Prop Firms

Discussion in 'Prop Firms' started by Investorsources, Sep 19, 2005.

  1. Here's the scenario:

    I have about $250,000US and want to open up a Prop Account but dont need very much leverage at all to buy the stocks that I want. For example, say I want to trade 10,000 shares of Microsoft, and only need 10-20 K extra margin to cover the trade since I have 250K of my own. Is there a prop firm that will do the following:

    1) Is there a prop firm that will give me a flat rate per trade of say $5 to maximum $10 dollars with all ECN and other fees associated on the 10,000 shares or even more shares if I get more money

    2) Not charge me for the platform since I am putting up all the capital

    3) accept a 5% payout of the profits in addition to the above commission since I am putting up all the capital

    4) And since I am putting up all the capital will allow me to trade however I see fit and whenever or as often as I like and allowing me to hold positions overnight.

    5) Will my funds be guaranteed by SIPC or CIPF. From my research I havent found one yet.

    6) Allow me to buy Options to hedge my portfolio. Not to actively trade, but to hedge.

    Am I better of trading at Ameritrade for $29.99 unlimited shares, or is there someone out there who would like that deal. I mean really, there is no risk on their part as I would be putting up like 95% of the capital if not more, all of the time.
  2. With that kind of capital I would give Schonfeld a call. They won't mind doing remote professional (gives you leverage, they are a pretty stable company (they acquire others and are incredibly profitable)), and they generally like remotes who aren't part of their program to put up 100K or so.

    But, alas, you must give them all a call and negotiate the best deal you can.

    Also consider ECHO, they provide excellent service.
  3. You might want to think about whether you want to park $250K in an uninsured account that doesn't pay interest.

    I don't see what benefit you are hoping to gain from going prop based on your requirements. You have no volume and you are barely using half your overnight retail equity.
  4. You will not get that SIPC insurance on any Prop Accounts as they are usually OCC types accounts and pooled in some fashion by the members.

    There are a few capital guys that will lend you money for margin and charge a fix rate and take no profit. These have to be independent from the B/D as they are not allowed to lend to customer accounts.

    You can get a good amount of what you need but may have to give up some control if you want bigger leverage.
  5. NKNY



    I Agree....

    Go retail and get 2 to 1 overnight and 4 to 1 intraday with sipc protection.

  6. If you're going to continue to trade using only a small amount of capital (under $500K), then I agree that you should stay retail (provided you continue to make money).

    A logical alternative is put up $50K or so, and use $2million or more, implement the more capital intense strategies that actually work well these days (M&A, pairs, etc.)...and put the other $200K in something else.

    And...of course you should get interest on whatever money you put up...and receive short stock interest as well. You have to consider all revenue sources in your trading business...and, I agree with the gentleman who said you should avoid putting too much money in a firm that needs their trader's capital for their net capital requirements (avoid at all costs).

    All the best,