Dodd-Frank pretty much-killed flow trading. Plus the US markets are too numerous and not fragmented as much. Flow trading is mostly done in Europe by prop firms, but it's a much diminished business today.
what are you guys talking about? Are you really comparing FX - Dealers with shithole bucket shops and trader funding programs? These are two entirely different businesses. Banks are making markets around a global asset portfolio with more or less fixed profit margins derived from regulation. Everything is automated and last look is in use. There is no such thing as trader who gets x amount of money to play with. You get delta/vega/gamma and rho limits, your inventory priorities and then you can axe your quotes, that's it. The other stuff is just gambling for hopeless retail
I had a good laugh here. FX Dealers and prop shops are not even close to compare. Most of the FX dealing business is DELTA NEUTRAL at EOD (end of day). The flow is working nowadays much more different than 30 years ago. Most of the "flow" is automated. I wouldn´t even call it "flow" anymore. It is a fight of algos. Real flows from corporates/fund business/asset manager business coming only after large macro figures. One of the private entities that is killing "IT", is XTX Markets : https://www.xtxmarkets.com/ managed and owned by former Deutsche Bank quant trader Alex Gerko. Alex is a master of his profession. Not to compare with ANY of the "smart quants" working at Tier1 nowadays. XTX Markets is meanwhile number 3 in FX liquidity/market making after JP Morgan and Deutsche bank in Europe. And they make a SHIT LOAD of $ every week, every month, every year since inception. So much money that they meanwhile have expanded into other quant driven market making in other markets. Oh by the way: we are executing 2,3 Trillion per year in FX Markets....
%% Unusual, to let someone under CEO to out earn CEO. I dont know , so did duck duck go + average IB salary-$118,000; a lot of that bonus, profit sharing. I just thought of a time I asked a good client for a $$ bonus @ Christmas, TR Andy I seldom do that+ most of my clients did not make what he did. TR Andy/ try that , worked well [Plenty of advance notice TR Andy/ I did that DEC Sure it helped+ I did good work for him+ his family liked me/ so every little bit helps. A lot better than the smoked turkey some give + that' $ good also.[No disrespect to TurkeyLOL]
In Banks, there isn't a concept of capital at the trader level. Agency / execution traders have their own parameters and take very little to no risk. Traders with mandates to take discretionary positions have limits such as a MTD or YTD stop or even more granular like daily stop limit. These are all dollar values. Stops are a function of the targeted revenue/budget expected of a trader. E.g. someone who is expected to make 10mm will have a budget of say 4mm mostly around 40%. Banks generally do not worry about margins etc unless it is a bilateral trade where that is the ability to trade with other counterparties. Other limits are position limits per product or tenor if trading rates products or even country or sector risk, these are to reduce impact of drawdown from particular product or segments etc.
this is how we operated and the bank charged us for balance sheet. So if you buy a stock, you are paying a borrow fee for those funds.
I should have added. Funding positions do affect your pnl. I.e. buying and holding securities as pointed out above. Or shorting securities and having a repo to fund. Fx trades are funded with swaps.