How does Prop trading work? Swifttrade, HLV, etc

Discussion in 'Professional Trading' started by jisalazar, Sep 9, 2005.

  1. jisalazar



    How does prop. trading work? What is the catch? are these companies scams, what is their angle? I can't seem to get a handle on what they do and how their good traders who live thru 4-5 w/o making money, end up rolling in money? How do they make $$$ aside from the normal way of making it, buying low and selling hi or vice versa?

    They always are looking for new traders. The explain the spiel, 3-4 of training with no pay, they when you can make 2K per month, you graduate to trading. The key is trading volume and there are rebates....rebates for what???This part seems odd, please clarify....and then when they do trade the majority of them do not make $$$ from traditional trading, they make it from rebates and low comissions...they tend to make 600 trades per day....sound intensive.

    Has anyone done this? gone thru a program like this and is trading well using the principals I've mentioned?

    I am thinking about doing it, but I need more info.?


  2. One way to get rebates is to provide pools of liquidity on high volume stocks with little movement

    In this way you can get in and out of a stock in the space of a few seconds. You'll dramatically increase the number of trades made and therefore lower commish.

    Prop firms traders have enough $$ and leverage they can do this all day long: they practically get paid to trade.

    A totally different style of trading from retail traders that can only dream of having that kind of buying power.
  3. I work at a prop firm and we dont do any "rebate" trading. I think some firms specialize in that or something. I have autonomy over what I trade each and every day. Since I have a core competency of how to trade, this gives me the freedom to find my own opportunities in the markets w/o having to abide by any firms rules as to how to trade.
    Personally, I dont know much about the rebate game, I am sure some make great money doing it but have also heard that it may go away in the near future. Who knows. I recommend learning to trade the more traditional reading the tape and understanding where the smart money wants to take a stock on an intraday basis.