A question about payscale...... I am with an unnamed prop house and have a question to determine whether or not I am being ripped off. I have 3000 down and my pay scale is 75% with the firm taking 25% I lost 500 dollars in my first month. I receive no pay for the first month. This is fine. I made 1000 dollars with my second month and my overall my account shows 3500 dollars after two months of trading. 500 dollars loss in month one.......1000 gain in month 2 for a net profit of 500. My firm took their 25% of my profits from month ($1000) two of 250 dollars. Here is my problem ....My overall p&l is only 500 for the two months...should the cut not be 25% of the 500 overall profit instead of 25% of the second months profit. My cheque should be the amount to ensure that 3000 remains in my account. So 500 bucks less their 25% =125 leaves me with pay of 375. They should not be able to make money until i am paid. The way they are setting up the pay means they make money every month. Any comments..... I have worked at other prop houses where pay for anyone only came when you actually had profits....only then would the firm take profits.
yeah, they appear to be trying to screw you. point it out to them nicely to make sure it wasnt a mistake by them first and maybe they will fix it. if they dont, quit. thats not honest business.
they are hitting you on your profits without taking account your losses. basically they arent looking at your net profit, which is something they should do. ive heard of firms taking their profit cut on a monthly basis but only if you are positive in your account. if you put in $3K, they should only take a cut of profits beyond $3K. like someone said, point it out to them because there is no way they can argue the math behind your logic.
I asked a couple of our traders who came from such firms, and they said that since they were responsible for all losses, and the calculations were made monthly (not "rolling" by quarter or annual), that what you firm did is a pretty common practice (not saying it'a a fair or good practice, just a common one). I suggest you call them on it, and ask for an annual "starting over" date vs. monthly. Good luck, Don