The idea I was thinking about was if a smaller group of already successful traders could form a prop, since each guy would be producing what a modestly successful branch of a prop would make. Obviously it would cost too much to do this when the end result would just be reduced fees. As far as actually making a prop firm and training newbies, I almost become suicidal even thinking about training newbies.
the prop shops were for the late 90es and early 2000es...there done now,running a prop shop is basically a small time bis ...rates too low ...margins too low...legal bills too high etcetcetc bieng a branch of a prop shop is the way to go...just compare them well against eachother ....test them better still is starting a real hedge fund....one account traded by ..say 10 traders...for real ....no sub accts.... starting a hedge fund is the only next level to aspire to...but its not for the faint of heart...or for silly little traders who cant get along with eachother... in a hedge fund when the guy next to you loses ...say 100,000 you loose money too and a lot of it..... prop shops are for the lone wolfs these days...the solo sailors the antisocials....the guys who dont need anyone...any help but for those who can work and play well with others lies the true reward .....tens of millions of dollars in annual compensation good luck
i think what he is asking is how he can start a group not a firm. for example,say he trades for Genesis or Assent,he may want to get about 10 guys together and obtian very good rates. then i would imagine he starts a sub account LLC and brings in a bunch of other traders who pay doubele what he is paying.i am guessing this is what he means. i doubt he actually wants to start his own prop firm.
This is all required to become a broker dealer, not necessarily a prop firm. There is very little reason to go through all this to become a prop trading BD if all you're looking to do is trade as a group and get better rates. Starting a BD (from scratch) is a big pain in the ass and you have to know what you're doing to run one, however, it's quite easy to set up an LLC for a group of traders and get a deal with a BD, and let them worry about the compliance and regulatory issues.
This is all required to become a broker dealer, not necessarily a prop firm. There is very little reason to go through all this to become a prop trading BD if all you're looking to do is trade as a group and get better rates. Starting a BD (from scratch) is a big pain in the ass and you have to know what you're doing to run one, however, it's quite easy to set up an LLC for a group of traders and get a deal with a BD, and let them worry about the compliance and regulatory issues.
angerbridge I admire your resolve and calm under pressure from some of these dudes who initialy did a good job choppin you up... Man! "chewed".... yep you come across a touch naive.. but your tenacity to seek a general picture and come back again and again with arguments and politeness was excellent... With the right knowledge you can do anything.. but if your actualy earning the money through trading consistently, youll find these options will open up to you as your knowledge grows and your account balance grows... start there first but there absolutely no harm in asking for a basic introduction.. Dont let anyone tell you what u can or cannot do and have that affect your inner goals... its just a question of knowledge and money and finaly the art in your execution... Paul
I see alot of llc's using the laser platform,is this what your talking about, setting up an llc thru genesis or somebody else like don or one off the other guys what kind of costs are involved and who keeps track of all the trades and profit and if somebody is about to blow up, is this done thru the main people or do you have to have people working for you to keep guys in compliance, how much capital is needed to start a llc and how many folks do you need to make it work
There are more financing options to structure oneself as a prop, or "prop-like" entity/group than traders may realize.. the tradtional series 7 JBO b/d structure is not the be all, end all.
This is true, but it's the safest. Just take a look around you on the prop threads and you will see countless posts of people who have been robbed of their capital, charged outlandish rates, had to endure crappy software and service, withdrawals that were paid late or not at all. Being that this industry is full of scum, I think it's best to stay regulated and keep everything as structured as possible. Even that sometimes can't protect you.