Can some on tell me the difference in a b/d who need,s series 7 and a b/d who require you to give fingerprint to nasd / finr and fill the u-4 form ( but does not require a series 7 )
If the $5K is paid for training fees, then of course the starting balance is zero. It's not being masked for deposit, it's payment for training under the prop terms and the training is carried out. You get a prop account to trade with, and that account absorbs all the losses. You don't pay any more to make up the losses. The prop account comes with very low commissions and 50/50 or 80/20 payouts if you make money with it. If the $5K is deposited as risk capital, then of course the starting balance is $5K. In this case there is likely no "free" training, and you get a leveraged account based on your equity (10:1 or 20:1). Losses are deducted from your risk capital and not absorbed by the firm. The platform fees also deducted monthly from this deposit. The commissions is slightly higher or negotiated, and 90/10 or negotiated payouts. Some firms required proven track record of consistent profits over 6 months period to accept such account, since you don't pay for training. The "starting balance" as you defined, will depend on which of the two kinds of account (prop or leveraged). Training and mentorship are differentiated in favour of prop traders obviously, since losses are absorbed.
hope you stay true to this statement. so far, any facts stated are attacked as "shill", and the number of posts checked and past posting scrutinized for signs of promoting any of these firms ....
Yes, T3 is set up this way for their "hedge fund". You can give whatever leverage you want because it is all margined against your primary account as that is the only account that is actually making trades (on the b/d side that is). But if you are not registered firm, the SEC still looks down on you if you charge overrides. That's a no-no.
An overide is the difference between what a prop shop charges you and what they are paying. For example, any firm with a few traders is paying no more than fifty or sixty cents per thousand shares and probably charging you five or six dollars per thousand. At the end of the month the thousands that this amounts to is the firms override.
In a last attempt to try and give you atleast basic knowledge of what's going on..... They can't call it a risk deposit b/c it's illegal. Obviously if your bending regulations you don't call it that. If you're not smart enough to figure that out then I can't help you. Also, it's completely illegal to give leverage above 4 to 1 to a trader that is unlicensed. If you have under 25K in your account the SEC rules state that you are allowed to make 3 trades per week and if they see you are doing more than this your account is dropped to 2 to 1 b/c you are a pattern day trader without sufficient capital. AT NO POINT IS AN UNLICENSED TRADER LEGALLY ALLOWED TO HAVE MORE THAN 4 TO 1 LEVERAGE. MOST PROP SHOPS LIKE THIS ONLY THEMSELVES HAVE 4 OR AT MOST 8 TO 1 LEVERAGE FOR THEMSELVES. THEY GET 4 TO 1 FROM A B/D OR CLEARING HOUSE AND THEN LEVERAGE YOU OUT B/C IT'S SETUP LIKE YOU'RE TRADING THEIR MONEY. AND LASTLY, IT IS ALSO ILLEGAL FOR A NON-BROKER/DEALER TO MAKE MONEY ON COMMISSIONS OFF OF YOU IF YOU'RE NOT A LICENSED TRADER. But obviously you knew all of that. The fact that you can't figure out by yourself that your training fee is the same amount of money you can lose before getting trained again is somewhat concerning. If you decide to join a prop shop then atleast do the research and understand what you are joining instead of trying to correct others who know infinitely more than you.
The training fee is just that. The amount you can lose theoretically on a prop account is not tied to the amount paid for training, all losses are absorbed according to the terms. I think this is what confuses you in your arguments.