DaytraderNYC. You offered some cogent points about advantages of prop firms. Although I agree with most of your points I beg to differ on some. 1. You said your money is not at risk-nothing can be further from the truth-after you get positive from your down 100K and you now have 50 k positive as capital, that is at risk since it is part of the LLC's money. The GE/Hon pair trade lost some money for most of the prop firms although it did'nt blow out the little ones-the reason is that the spread unraveled slowly and didn't gap overnight. If that had gapped overnight, entirely different story-ala harbor securites? 2. As part of the LLC, you could be responsible for possible fines meted out to the LLC for violations. Read the fine print on your LLC agreement specifically offsets, and relief clauses. Case in point: There was a thread here about nx compliance issue-no one from the llc's responded to the questions posed by traders there regarding the 30 second limit. Why? Don't assume that because it is an LLC that you are personally released from liability-LLc's are relatively new and untested in the courts specially when fraud is involved. It is highly unlikely but I've seen too many unlikely things happen these past 2 months...... 3. Software, technoclogy and bullets- I use a software package wherein I punch in hotkey f1 , then f2. Doing this buys me a bullet and hits the NYSE bid all within 1.5 seconds. What more do I need? 4. No oversight- I want to put on a calendar spread in options, I don't have to call the class A member to ask for approval. I am not out to bash LLC's just want to provide a different insight to those who think that they have to join LLC's to have a good trading career. If you must join, read the fine print (or better yet-pay a lawyer to read it ), check the financial (Oh my God-I am starting to sound like Don!!!!) I actually read one wherein if you go deficit, they can cut you and your responsible for your deficit and collection costs-huh!!!! I though LLC's means limited liability....
Or maybe she'll say, 'so?' Or, 'is that <i>all</i>?' In any case she'll have found a home for it before midnight, at least mentally. Then again, maybe you got a good one. I would not advise anyone to go prop unless he needs to. A prop's goal is to trade retail, often.
If you ever want to be a real trader and trade size - a pro(p) is the only way to go - where else can you go and put on 10 to 20 positions of 10,000 to 50,000 shares each -have 10 to 20 million dollars in the market and not be on the hook for even a penny of it. only at a prop unless you are buffet or gates.