How to find a Prop. Firm?

Discussion in 'Prop Firms' started by JML845, Jan 23, 2004.

  1. JML845


    I'm a trader who is just starting out and I'm looking for a prop firm in Arizona. I've seen firms that want 5$ or 10$ grand to start trading with them, but I thought a prop firm gave you the capital and took a percentage of the gains? Any help or advice would be appreciated. Thanks.
  2. cosmic


    I am asking mself exactly the same question at the moment, beeing a futures trader located in Germany.

    Best would be firms that also offer a profound mentoring/educational program I think...

    If anyone has a good hint, please PM me...

    Best to you,
  3. Mecro


    Prop firms want risk capital, usually a minimum of 5k. Basically, you are expected to churn away that 5k and then you get cut off. Or you start getting profitable and then you make it.
  4. search on the threads for the $5,000 thread by Bright

    they're the best, hands down

    Echotrade is also in your area

    Assent was hit hard by the SEC stepping down on the bullets, and, well, know someone who can tell you the honest skinny before signing with them...

    in general, get to know someone whom you trust, that can give you the real skinny on a firm before committing your monies....

    take some of your funds and actually go to their offices and see their presentations. Socialize at lunch with some of the traders and see whether that's the atmosphere you can tolerate, and they can tolerate you.

    If you're starting out remote, then those words are golden, and you'd have to do twice as much research before committing.

    Alternative are:

    SEC PDT rule using the 4:1 trading at the other retail firms where you build up your balance to over the $25,000 required. This essentially means trading positions instead of daytrading and violating the PDT. Perhaps a few key option trades that pay back 8:1 will through you over the required $25,000 account balances.

    MB Trading
    Trade Station Securities
    ....and a host of other of other firms now offer < $.01 per share commissions

    so tread carefully and set out your stategy before taking steps
  5. Mecro


    You know why would you say something like this. EVERY firm was hit hard by SEC's decision. Yet you mention the one firm that has a multi billion dollar company behind it.

    Can you make it any more obvious that you have a personal agenda against them?
  6. you may or may not be right about your criticism of him, "but the multi-billion dollar company behind it" reference to Sunguard has little impact on Assent. Sunguard bought Assent for their software and as an LLC, Assent could go under without affecting Sunguard one bit. But yes, Assent was by no means the only company hit hard by the elimination of bullets (I can think of one big firm that was probably hit much harder).
  7. JML845


    Thanks. I appreciate your advice. My question is: If the prop firm still wants 5K from me, then what is the advantage to using them over my retail broker? I assume its the leverage/margin trading and software. And I'm not really a daytrader, I'm more short term(2 days - 2 weeks) is that ok for a prop firm or do they only allow intraday trades? And what is SEC PDT and the $25,000 minimum?
  8. Well, if you plan on using your retail broker, as you state...then you probably have the standard $25K to fund your account. This allows you 2:1 up to 4:1 to use, but limits you regarding market access and a few other useful tools. If you have the $25K with a good trading firm, the money is still yours to make or lose money's just that you have better market access, overall lower rates, use of capital, better tax treatment (at least at our firm), etc.

    If you simply to play with a few grand in a retail account, well then, that's a whole different story. If I can help any more, please PM me, so I can respond in more detail.

  9. Software really isn't much advantage at a prop firm.

    You won't get much leverage/margin for overnight/short-term trading, especially with $5k down, from prop firms. They primarily want you to daytrade so that they can make money from the commissions, and also they want to limit risk (which $5k isn't going to help much with). Generally, to short-term trade you usually need to put a lot more money down and make more concessions with commissions and profit %, which largely defeats the purpose of trading prop.
  10. You can get BIG leverage with 5K if you are using the firm's capital wisely. For instance, say you are arbitraging Lennar against Lennar B , or maybe two preferred stocks of the same company. This takes capital but has very low risk.

    I would have no problem letting you go 100:1 on something like this.
    But, of course, it's not sexy, so most people won't do it. They won't trade to make a few cents per share. Most people don't understand that leverage used wisely IS the advantage over other traders. Leverage is so often used incorrectly.
    #10     Jan 24, 2004