New Prop Firm

Discussion in 'Prop Firms' started by nycderivtrader, May 14, 2004.

  1. Ok everyone- seems like prop firms are a dime a dozen and what one firm has over another is their people- some charge a little more per trade, etc.... yes yes (some even salary!).

    These people can train new people to earn money in profits for the firm, in addition to the revenue generated by the volume. It seems like this, in addition to the technology/reliability are the only differences from one to the other- please enlighten me if otherwise.

    So, with all of these firms all over, I would assume that the cost/capital required to open one would be relatively minimal.

    My question is how much would it cost to open a firm with an initial group of 10 traders (in nyc). You can select the variables to simplify.

  2. Let me be clear-

    I am interested in what the costs would be to opening up a prop firm, 10 people (you choose the variables and give me a number).

    There are plenty of prop firm listings on this site, lets keep this one to start up costs so we all can see what firms really put into their business for those who want to join!!!!

  3. Pretty simple. Buy an exchange membership, qualify with a decent Clearing Firm, obtain proper licenses, hire a Compliance Officer, file FOCUS reports, get a good Securities Lawyer (so you don't end up with a zillion violations like so many firms do), get int a decent building, get all the telecom (not a big deal these days),

    And then simply capitalize yourself so that your traders can use a couple of million each for opening orders and pairs trading, and other working strategies.

    There is a little more to it, but the Compliance Officer and the Securities lawyer can walk you through the rest.

    That's about it....Our traders who started their own firms were able to do it in about 12-14 months of starting out.

  4. Don,
    While I know ewverything you said is factually true, I hope the rest of the readers understand that what sounds simple is a lot of work, money and commitment.

  5. Yes, there is a bit more to running a trading firm than some might think...but since Bob and I have been doing this since 1978, we tend to "over-simplify" it....I was trying to be helpful...