Ok Guys-here's The Deal With Prop

Discussion in 'Prop Firms' started by Warrior4g, Mar 27, 2008.

  1. i talked to a person high up on the totem pole at a well known prop firm. they can have a trader go retail with 25k and get 4-1 or they will sponser a trader for the 7,55,and 63 and he starts off with 6-1 and then moves up. they have to bring in about 10 grand(that may be negotiable). anyway,after passing the 7,they let you trade while studying for the other 2 exams. so there you have it. taking the 7 affords you much higher margin and you don't need 25k. this is fact and its from a very reputable firm.
    there were numerous discussions regarding the issue of getting the 7 and it being meaningless because we all were under the impression that the sec would make sure a trader brought in 25k and recieved 4-1 whether licensed or not. that is simply not true so perhaps a license is'nt such a bad thing after all. that said,are there any negatives that anyone could think of of having a license?i'd love to know as i have heard there were some but cannot remember what they were.
  2. Did you speak to Mr. Allen?
  3. no offense but i would tell that firm to go fk themselves.. that sucks for anyone that is already licensed.

  4. lack of SIPC comes to mind with not being retail.

    Also for low volume traders I have yet to see a prop firm beat the offer IB has on pricing. Paying more and giving up your account insurance is a serious trade off for higher leverage. (I know I know there is more to it then just pricing as I also have an account with TS for charting)

    Of course if your a prop firm and you have a better deal on the table for a 100K share a month guy you should contact me. (I have contracted several and they dont see interested)
  5. What is considered cheap commissions these days? I still pay .0035 and a remote fee. Never really seemed like a lot to me. I also dont keep 25k in my account and have no license.

    When are all these new rules coming into play? And does this mean I have to have 25k in the account? I started the account a year back with 20k, and withdraw profits bi-weekly. Also I increased leverage and decreased equity. I think I have roughly 10k in it right now.
  6. ratboy,they start you at 6-1 whike you are studying for the other exams. i'm sure you could get more but i think they said 6-1 assuming you are somewhat new to trading.
  7. IB unbundled is about .0017 after ECN rebates. probably about double if you take away liquidity. No desk fee and they pay interest on balances over 10K.

    The downside is that about the only way to make the customer service any worse is to hire some illegals that don't speak English. Luckily with ET you can get your questions answered pretty quick.

    I guess like most things you get what you pay for. I don't need hand holding and want rock bottom pricing. thats what IB is about for the retail trader anyway.
  8. Good to know. Guess my commissions are still pretty competitive. I'm with a small division of Hold Brothers if anyone is wondering.

  9. I would think another downside would be the possibilty of the sec still coming down on these BD's who offer more than 4:1 leverage to licensed traders. That green memo thats floating around mentioned that is still a concern. I guess they don't like the deposit/commission aspect of the deal. Whats to say they don't say no more leverage greater than 4:1 licensed or not? Then you might as well be retail...

    I just wish the powers that be would clarify this situation once and for all. If we have to be licensed then so be it. But let us trade with under 25K with leverage greater than 4:1...

    Just a thought,

  10. the powers that be hide from transparency... that kills their powers. they want people to fear them... keeping things fuzzy allows them to selectively enforce questionable application of old legislation. they need not even go to court as long as they pick on someone unable to endure their financial shake down. when the news/results are spread to the other firms.. the desired effect is realized.
    #10     Mar 28, 2008