I can't think of any reasons not to go prop. I can't believe all of ET is not trading prop. They really should be. I'm just kidding. Here are the negatives: Like Don said, licensing Paying exchange fees Your orders are treated as BD, not customer LLC risk Mark to Market accounting That's just about it. I don't really see these as negative, but for some traders, they can be.
Do you all know worldco? Many good friends of mine lost their capitals even they consistently made money every single day. This is the risk I like to emphasize here. You can be the best trader in the world and still lose money if you don't choose your prop firm properly. I think these are the steps you have to go before going prop. 1. Find a "low-risk, high-reward, capital intensive" strategy that works (as suggested by Don, or Don's trading course) 2. Find a prop firm with minimal liability (Don and Mav can tell us how). 3. Join the prop firm and start making good money. 4. Set up a prop firm and help others.
Number 4 is the best Option. Just do your own, get the segregation risk off your plate and go for it. Are you fucking kidding me. We have spent about $50K per year per JBO for audits and exchange audits and than the K1 work for Class B member/traders..that runs $25K than you get fines by your SRO because you do not have duplicate statements for your traders and than you have deal with all the losing traders that blame you for the losses that they suffer.... Hey Mr Ownwr.....I paid $40k in commish this year can I get 50% back I need to make mortgage. The margins are not that fat. It may seem juicy, but the adm and crap that is involved is more trouble than it is worth..... Just buckle down and trade. You have 90 % more control and less moron to deal with. Sorry about the rant but I have bad memories.