wow, you know alot about this guys stuff, and seem to be really close to him......say, he wouldnt happen to have a monkey named mr. bubbles and a theme park called 'neverland' on his property would he?
The benefit is to be able to trade size quickly. The following example is not true in every case but just what I have seen. Say a trader makes 5 ticks a day at $10 a tick. With his own money he is trading 10 lots making 500 a day. With that consistency that same trader can be trading 100+ lots at a prop firm True you might give up 50% to start with but I would rather make 50% of 5K then $500 trading my own money. Another benefit is say that you have a great year your first year and then lose money the next year. Trading your own money you are now taking money out of your trading acct or your daily expenses acct. At a prop firm you have already been paid out for last year. Worst case you make nothing and maybe lose your job. One other thing too is the access to news and analysts that many firms offer. In most cases at home traders do not have access to the same resources. Instead of being stopped out or taking big fast losses on breaking news, you could have access to the breaking news and be able to trade it. I would not necessarily say that it is an informational edge since a lot of professional firms have the same news, but at least you are not at a disadvantage. Anyway that is the way I look at it. IT does not work for everyone
It has been a little bit since I looked around but from what I remember some firms in the chicago area to look at are Macfutures, Geneva Trading, Marquette Partners, Gelber, Jump Trading, Transmarket (mostly spreads though), ITG, Kindstree, and there are probably many others. All the deals are a little different. Some have seat fees and some don't. Some try to make a profit on them which is pretty lame. Probably commissions at most places are near cost. Some offer draws/salary. From what I remember Mac had a pretty good mixture of trading styles that might fit what you are looking for. I have not been in their office in a year but was told basically they don't care what you do as long as it makes money. The other places you will have to talk too.
Guys, the discussion of who's got the bigger (or was that most).... er.... airplanes is just fascinating. Not really. Let's please stay on topic and avoid all personal attacks. Thanks.
Just a little exposition on the benfits of prop vs. customer (and the other way around). As the industry has progressed, it has become harder and harder for an individual trader to back himself and make it. Priority one is getting on the same playing field as the banks. This means getting the best software (TT) and the fastest connection possible (at least a T-1). That is immediately going to cost you cloese to 2K a month. Then you need you info, so a bloomberg or CQG (which happens to be what close to 90% of the pro trading community uses) is going to be added to that as well. THEN, you have to worry about commissions.....if you are not a member of the exchange or lease a seat, you pay out the nose regardless of your FCM. Everyone seems to balk at the high desk fees, but when you add it all up, 3K is much less than what you would be paying on your own for the best equipment and connections. Not to mention that "arcades' also have full time tech support and redundant back ups. What happens when you bellsouth dsl goes down? Your SOL for a few days while it gets back up. What if your long 50 or 60 emini when it goes down? Now your in trouble. Don't think I am just hyping prop. I am a customer trader (I trade the 10 and 5 year cbot....trading for 7 years)who traded prop for 3 years and made enough money to back myself "correctly". Too many guys hop in the market without the right tools and capital....it always leads to destruction. If you are worried about the money you will never make it. Trading should be a hobby first, and a career second if you go at it alone.
I read about this prop subject all the time and have to give my take on it to the aspiring trader at the least. I traded at a top stock prop firm for a few years and now trade only for myself due to what is best for me the last 2 years. IF you are new , and if you do not consistently make $$$, bust your butt and find a decent prop shop to hire you , especially if you don't have to put up funds. I have not traded futures prop , but primarily trade futures now due to the cost advantages in commissions...yes boys and girls they add up are important if you MAKE money. SO, the futures prop route with low commissions and no money down is a no brainer for a newbie or a chronic loser, to learn, or a borderline trader, who is still working on his/her skills. Quick , QUIT thinking about the money you can make or what that big-baller trader is swinging, because I have seen big hitters who made money on the street unemployed too. 1. 2 , 3 years does not make a trader...or months for that matter. So if you are new or losing, futures prop shops seem as good or better than stock props to learn skills, learn not to lose, risk mgt, process,etc, etc. NOW, if you make money consistently, who cares? I don't give a rats *ss what you made last month, its your choice, its your style, personality, needs, etc. I personally trade my own account and maybe could make more and definitely trade more size at a prop firm. BUT, unless things have changed, I find that prop firms want you to trade your butt off to make up for those low commissions, overhead, etc. I trade like 3-5 times a session, whether it NY, or Eur time. Sometimes a little more. I make money 19/20 days per month,I can provide statements/results for these prop bookies. Know what? they are not really interested , they want scalpers, period. Volume ! Ok the 4 or 5 firms I talked with a year or so ago did , anyway. What? change my style to conform to their bottom line? I make money almost every stinking freakin day, proves it, they say I dont trade quite enough. (last year, anyway) What does that tell you, students? Tells me they make their money on volume and maybe the few winners in the office fund the trainees who lose and a little left over for the coffer for partners. Its business, Business 101. transactions= $$ and that search for that one ,$10 million man , or for that Dmitri for you Chicago guys. Having said that, I did get offered to trade in Chicago, not remote. For what? more size? Live in weather hell and fat women ? I make a good living, trade by self, BIGGIE for me, No idiots around, No boss, who thinks he knows how to trade.... because he made 6 figures in the bull market 90's . I live on the beach, warm climate, scenery unreal, my account still grows nicely after living expenses .... Ok you get the picture.... If you make money, its your own damn choice on the lifestyle and where you live/trade. If thats prop trading? Go swing it and be the BSD at your firm , get the spotlight. but you better stay humble as a trader because the trading gods will bring you down to earth fast if you think You know it all. I have seen big prop traders at one time struggle and lose confidence too and become unemployed. ITS What YOU want! Just find what works for you, trade every day, for that day, don't think about past , future, make the best trades for today, and learn, adapt, grow, and believe what you see, not what you hear. Thanks. Good luck .
I am looking for Prop futures or futures Arcades, preferably in New York and found this thread. Does anyone have any updated info? What firms would you recommend? What are the typical deals for Prop futures? thanks