Technically it has to due with the origin of the capital. It delineates from retail money and investor money hence the term proprietary. There are many true prop firms. Chicago has over 50 and growing.
These props only emerged in the US from the pattern daytrading rule enacted by the SEC in 2002 October for US traders. There is no need for prop firms just to take advantage of leverage etc. if there was no pattern day trading rule in US markets. blame the SEC for the rise of pseudo prop trading firms. A true prop firm doesn't require any fees from a trader, 1. trainin is free 2. no software fees licensing is required finra rules.. there aren't that many prop firms because most hedge firms don't daytrade if yo have 10 million or more in capital under management. daytrading is not feasible for large funds.
talking about proprietary firms for stocks Only... leverage. most traders know that prop is not a retail broker. if not they are really lost. Futures prop a different animal. which their are many in chicago as you mentioned many times before & you know all to well. most traders on et are stock traders it appears.
Scorpion, almost all these prop firms in Chicago trade stock. It may not be their bread and butter or their core strategy, but they all trade them. Or I should say "most" do. I know a lot of guys on ET both through e-mail and in person and I would wager that 50% of ET trades futures with the rest being stock and options. It's very misleading and here is why. What I have discovered about ET is that there is a rather large older population here. I know that would shock many here. And these people are rather passive buy and holders. So you will see them comment often about general economic issues and stocks but only as long term investments. I would argue that a majority of "active" traders here are actually futures traders, not stock guys.
mav.. i am talking in general about prop firms relating to stocks which i think most traders talk about more then they do about futures. they may trade a combination of both in their accounts. all the firms talked about on here relate to trading stocks usually. when traders talk about futures its usually retail brokers .. you get different feedback from people that contact you directly which is interesting . just my viewpoint from what i see posted on et all the time about the topics discussed.