money of the prop firm

Discussion in 'Prop Firms' started by raistlin_trader, Dec 30, 2009.

  1. Could anyone can explain how those prop firm like swifttrade or title can provide you million dollar and you just put 5k or 10k as deposit to open a branch? Where is those money come from? Thanks for any sharing information
  2. the have a few $ up themselves to keep up with minimum requirements and operating capital

    the branch manager /owner that makes commissions $ from traders puts in some more

    Then they are making a bet that not every trader will be maxed out on their BP at the same time.

  3. Experienced/profitable traders usually get very high leverage. $1mil leverage would only be given to the best traders at a few places.

    At that level your at the top of the food chain.
  4. Your misinformed bud, no offense. It obviously depends on the firm, but i had a mil in BP before at my old firm, and I am far from the best lol.

    Real deal day traders get much more than that, and yes they are taking 5 figure swings on avg.
  5. in some branch, you can easy get half million BP with net loss only 200 or 300.just wonder how much should Title or swifttrade or hold brother put money in cleaning house to get so big buying power to allocate to each branch or trader
  6. i dont exactly understand your question, but I think you are asking where all this money comes from? I am not sure either, but I know that the firm puts up some and so does the clearing house, and I assume they have ratios and formulas for their max risk, max loss etc. There are times when everyone is in at once, and probably at full BP, so they must have a maximum sustainable loss before they will blow eveyone out.
  7. It is very easy to get huge BP as long as it is intraday. You can get enormous BP at places like Swift, Title and WTS with tiny bank but overnight positions are not allowed.
  8. yes, i know that. I just want to know how swift,title and wts get their buying power. how much they need to pay or deposit to get their buying power
  9. Who is title, wts?
  10. Think of it as a giant pool. If you have 300 traders each with $5k down that's a pool of $1.5M capital. Not every trader uses 100% of their capital at all times. Adding leverage helps spread things out but since the capital is a floating pool the firm doesn't need to borrow as much as you would think to supply the leverage they offer.
    #10     Jan 1, 2010