Kurt, why don't you give this a shot. http://www.topsteptrader.com/ I know guys on here like to rip on them but it's a pretty cheap call option. Spend $150 or so in premium and that is all you risk. The upside is, if you pass the combine, they will back you 100%. And not with 5 shares of stock but with trading up to 5 lots of futures contracts in anything you want to trade. Their splits go up to 80/20. Yeah the rules are shit in many cases, but that is because too many pikers try to game the system instead of actually trading properly. At the very least, you'll find out how good of a trader you really are. It's a little better then trading on a sim because you actually DO have something at stake.
I believe the non-compete said if a guy leaves after training they have to pay Tower Hill something like 30k. Office environment is huge. I have worked on a desk with the same guys for 6 straight yrs at one of the firms I traded at. Was great. We worked our asses off but also kept it an easy going environment. No bitching or whining....no talking up our own book.... Yrs later I ended up at a large futures group where it was the exact opposite. All guys did was bitch, throw shit around, smash keyboards.....horrible atmosphere. Nobody there made any money in the long run....was a waste of time. Eventually they went under anyways. If a new guy isn't in a good atmosphere he really has no hope. Will learn all the wrong things.
Starting with 5 shares is a little silly. I think 100 shs would be more reasonable, as long as they would move you up in size quickly if you did well.
I dont know anything about their contracts, but I agree a ridiculous agreement is a negative if you're not getting enough to offset it. Where I don't totally agree is that trading 5 shares of goog or aapl is useless. That's my opinion - i know it might not be everyone's. My thought is at least you have the opportunity with no cash down to learn how to trade stocks that actually move. I am definitely anti the rebate / parity / low priced stock 'training' since you'll never make enough to make a living with that strategy, and this approach at least gives you a shot. They've been around since at least 2000 (maybe under the BD's name, not tower hill), so I assume they up the shares quickly on guys with promise). The bd is very well capitalized too for a prop firm (check the SEC site). it isn't a total schlock shop with no capital. It makes total sense that that deal wouldn't be interesting to someone who has traded with reasonable success before. And those guys should put down money, or may have to otherwise, b/c unless you're awesome, almost no one wants to back and teach experienced traders unless you pay them a training fee. (And its rare anyways because if you're good enough you'd in most cases want a money up deal with better terms). They do have serious traders there from what I know, and are heavy on tech and environment. That's why I said check it out. Are you pretty sure all the good guys leave once their good or just assuming? Again, I'm not sure, but I would think that would be the key factor for long term sucess of a new guy.
Trading 5 shares is absolutely useless. Doesn't matter if you are trading AAPL or GOOG. What kind of money can you make trading 5 shares. You catch 5 points in AAPL you make 25 bucks. Is laughable. Firms like this are obviously scared to take any financial risk. They would be better off having guys go on a simulator for a month, then start them off at a few hundred shares. Let's be real..even if a guy was trading 300 shares of AAPL and gets caught for 5 points...it's only 1500 bucks. If a firm is worried about 1500 dollars they have no business backing guys...or being in the business. This guy needs to do a lot of more research and looking around. Jumping at a first offer is never smart unless it's a great opportunity. Taking something like this because he takes no risk is crazy. He will be risking the 3 months he wastes trading odd lots while he could be out pursuing a real trading job. The fact they have some crazy non-compete is the icing on the cake. They told my buddy if he trades there and leaves in the future he has to pay them like $30,000. Real firms like FSNY, Schottenfeld, Schonfeld, and others don't even have contracts like that.....and those places are full of the best traders out there trading huge books.
I definitely agree. But I think it is safe to assume they up the shares quickly on people showing promise. I'm putting two and two together here, but logically, they don't want a guy hanging around trading 5 shares either. (Profits to split will be negligible on 5 shares, and they aren't planning to make money of per share commissions on 5 shares, so it wouldn't make sense to have a model that worked that way for any extended period of time). And I asked Maverick, but the same question for you, is don't these guys have some real deal risk taking traders? Are you pretty certain or just assuming that due to this seemingly weird new guy deal? If it is just a guess, the OP if he gets an offer should ask the questions and/or ask the firm to let him sit there for a morning and make sure what really goes on there with the real traders. in my experience, I never got the impression tower hill was afraid to take financial risk, but they probably don't feel like wasting too much money on new guys while they learn. you have to factor in training, infrastructure, tech support and the other tools which cost money no matter what (starting with market data and other costs). Agreed agree with you on the contract but haven't seen it, and that he shouldn't jump on the first thing he sees. But as far as trading equities for no cap down and no training fees, there aren't many choices. Even the firms you name don't do it, at least for new guys. It is indisputable at this point that First New York seems to be falling apart. Not just the post from the blog the guy referenced, but the CEO was ousted (see the WSJ article), and partners and their capital, as well as the traders who werent already fired or quit are continuing to leave daily. Schoenfeld isn't hiring and publicly stated he's shedding traders, and Schottenfeld is a small firm (about 40 traders from what I know - I could be wrong) who definitely does not take new guys or have a training program. For experienced guys, you really need an excellent track record to get in there. My gut says the 5 share thing is just to limit wasting the firm's money while analyzing who has potential, and that it isn't a capital thing nor nefarious in any way. The contract issue could be however, depending on the wording.
I'm sorry, I must have missed this. Can you post that link about FSNY? I didn't hear anything about this. Kind of interesting being that one of their best trades was just interviewed in the new Market Wizards book.
Which trader is in the new market wizards? scuttlebut: http://www.wallstreetoasis.com/forums/first-new-york-securities-kaput WSJ / Dow Jones newswire 3-4-12 (ps - by now the rumor is that Friedman left too with all (a LOT) of his capital. he is referenced in the below story.) First New York Securities CEO Joseph Schenk Resigns -Sources By LIZ MOYER NEW YORK (Dow Jones)--Joseph Schenk resigned as chief executive officer of First New York Securities, a proprietary-trading firm, people familiar with the matter said. Partners of the firm held a meeting Tuesday evening and notified employees of the move by email. Schenk will remain at the firm for a three-month transition. Tom Donino, a partner and co-head of U.S. equities trading, was named interim co-chief executive while the firm's board of managers, which includes traders and executives, searches for a permanent CEO successor, a person familiar with the matter said. Schenk is leaving the firm to pursue other interests, a person familiar with the matter said. A former chief financial officer of Jefferies Group Inc. (JEF), where he worked from 1998 to 2003, Schenk joined First New York in 2009 from a brief stint at Pali Capital. He was named co-president of First New York in early 2010 along with fellow managing member Donald Motschwiller , who left the firm later that year. First New York was founded in 1986 and in recent years has been on an expansion kick, hoping to pick up skilled traders being cast off larger Wall Street firms that were forced to restrict trading after the financial crisis because of new regulations. The firm had some 200 traders working across a variety of asset classes in early 2010, according to press releases from the time. Senior executives spoke openly that year of hiring dozens more traders. The firm also explored setting up a hedge-fund structure and taking in outside money. As it was hiring, the firm was also losing people. Co-founder Donald Erenberg sold his interest in the firm to another partner. He left last May, according to his broker-check report by the Financial Industry Regulatory Authority. Erenberg and fellow co-founder Michael Friedman are in their 70s, though Friedman is still with the firm. Last month, senior equity trader Steven Heinemann left after 16 years. Reached by telephone Tuesday, Heinemann said he spent many years at First New York and left to explore new opportunities. He was at SAC Capital and Gruntal & Co. before First New York. In March 2011, the firm announced a series of management shifts. Heinemann was named vice chairman. Brian Tierney , a former trader and head of counterparty risk at the hedge fund Millennium Partners, joined as chief administrative officer. Seth Platt, formerly with Explorer Alternative Management, joined as director of corporate strategy and business development. The firm also appointed a trader-management committee last year to oversee trading and manage risk. The members included Donino and Seth Setrakian, the co-heads of domestic equities; Kevin Gerety, head of international equities; Samuel Ginzburg, head of capital markets; Ross Jackman, head of credit trading; Charles Katz, head of commodities trading; and Michael Schreiber, head of macro rates and foreign-exchange trading. -By Liz Moyer,
So what about all the "true prop" model equity firms in Chicago besides Tower? There's always heated debates on Elite with traders claiming there aren't any true props, then Maverick posts the names of at least 20 firms on another thread. Certainly not all of those firms are restricting 5 share lots for newbies? If so, then ksmetana has few choices other than to rejoin a registered firm that requires the exam and a capital contribution.