Yeah, sounds really good. They hold some of your profits to create an account that becomes equal to 3 times your largest 3 day drawdown. So they use your profits to manage their own risk. Clever... This is how prop firms should be. Instead of ripping all their traders off, they should back them. Rather than make money off their failure, make money off their success.
http://www.sec.gov/divisions/marketreg/bdguide.htm That is your guide to if they should be registered as a broker dealer. If they make money off of your trades - aka transaction based compensation (and putting money down has nothing to do with it) - than they should be registered with the commission. There isn't a securities attorney in this country that will disagree with that statement. And at .0035 they are making money off the transactions, so connect the dots. if you've committed to 2 years in the business, spend the time and the money, take the test, find a registered firm (they're not all perfect either, but at least they're accountable to someone).
You said they start you off trading very light as far as BP. How light are you talking about? I have heard a similar deal like this but the amount of size traded at the start was laughable.
If they're not marking up commissions, then it's possible you're trading a master account with an LTA (limited trading authority) agreement, either as an independent contractor or employee, and splitting the profits. As Sgt Slotter pointed out, if they're marking up the commissions, then it's obviously a form of transaction based compensation, which according to the link, requires registration as a broker. A firm can't have it both ways. Either they are marking up commissions, or they aren't.
it's only good if your profitable & if you can get a profit payout ? take a shot & see what happens , your wasting valuable time just thinking about it
What do you expect them to start a rookie out with 10MM? They are going "start" you with something small and as you do better they will increase your size. I see nothing wrong with that...
There is no training cost. You are an independent contractor. They create a sub-account and you trade their capital. They are charging you commissions on their own capital... maybe that is the catch? If you lose, the commissions don't matter. If you win, the commissions eat into your profits, profits made with their money. I don't know. Every prop firm has a degree of shadiness, but some are bigger crooks than others.
So you never, ever, ever, ever send them money??? What about for software and quotes? Is there a screening process or do they let everyone in? Is it a loss leader so when you lose $100 they come back to you and say "we would love to have you stay but you need to deposit a little cash if you want to continue?" What's the website?