Hi, I am a retired mutual fund manager that is looking for a flexible job to keep busy. It has been over 5 years since I left and I truly miss the market now. I really want to trade my own account, but can't since my wife has a senior job with a WallStreet firm and they heavily restrict both our accounts. A friend has told me that I should consider a Prop Trading firm as a solution. I looked at a few websites and I have one question. Here is the question. How are these firms making money? I am suspicious of anyone with brains who hands out capital to pretty much anyone who applies and makes it through the training period (markets are so random that some WILL succeed no matter what). And why are they continually recruiting people? Based on my years on the trading floors of two major investment banks, I noticed that on Wall Street: 1) Firms do not like to day trade unless it is in the context of market making for their sales force. The reason is that intraday trading is quite random...without an information advantage. 2) They NEVER use their own capital unless it is pretty much a sure thing (arbitrage, legal insider info, etc). 3) Their proprietary trading departments try to have as few traders as possible. They find a few guys who can trade, and then they allocate their capital to them. The small prop firms out there seem to be doing the opposite of all three. There must be some other way they are making money. Before I even call one of these firms up, I just want to know. Can any vets out there tell answer my question?