Prop Firm Comparison Suggestion

Discussion in 'Prop Firms' started by HoustonTrader, Dec 6, 2002.

  1. Bare with me if this thread is a little long.

    Where I'm coming from: I'm currently an institutional commodities trader for one of the energy marketing firms in Houston. I've survived four rounds of lay off's so far, but my firm, like most in the industry, faces significant financial risk in the coming year. Just in case something unfortunate happens, I'm researching other trading careers. I have no link with any of the prop firms.

    What I've noticed on this board so far: Ever since I found this site and started reading through the different threads, I constantly run across "new" members who do nothing but make shady allegations and outright bashing of different firms. In my industry, we don't give a shit what different traders think of each firm. It's pointless. The only thing that we care about is what our current employer is paying us and what is the bonus payout percentage. When I read this board, it sounds like a bunch of used car salesman telling me not go here or there because that other dealer will sell me a lemon or try to screw me by charging me to much. While there is a need to contact a firm for specifics on possibly complex issues, there are way to many answers stating to contact the firm or "pm me for details". Again, reminds me of car dealerships that won't quote you a price on the phone and then tell you to come down to the lot so they can do a high pressure sales pitch on you. Good firms, like good trades, sell themselves without needing to hide anything or do a sales pitch.

    What I'm suggesting: It would be nice if Elite added a small area with comparisons and descriptions for each of the props firm to fill in. Items such as the following: what amount at what volumes are commissions charged, does the trader have to put up any funds, does the firm share in any losses, what is the profit split for traders with new, medium or extensive experience, how much are overhead/desk fees, how much training is involved, how much does training cost, is training mandatory, what method of training is used, can you take positions overnight, what are position limits at different experience levels, are traders able to use their own trading methods, what fees might be reimbursed, minimum daily/monthly trading volumes required, how is the firm structured, etc.

    As I said, I don't have any experience with any of the prop firms, so I'm sure there are other questions that I don't even know to ask. As an example, it took me a few days to figure out, if I have figured it out, that bullets are some type of fee for short sales. A comparison format would be preferable for most information, but I'm sure that the prop firms would need an area for describing complex arrangements. It's amazing how much conflicting information that I read on this site, or how many times I've read that I shouldn't trust someone's post because its BS. This area should allow traders to review 99% of all information that they would need to make decision on which firm fits their particular situation the best. In my opinion, firms not willing to do this, not seeing it for a great promotional opportunity, fall into the shady "we've got something to hide" category.

    Just my 2 cents, but I think Elite and all of the prop firms would gain an extreme amount of admiration and thanks from all of us who read this site in search of information and experienced help.
  2. mrktwiz


    well said.....

  3. Houston-
    I understand that something like that may be helpful.
    Don't take this the wrong way but can't you just go to the websites and/or call the firms(do a little homework) and ask these questions?
    When I was researching firms..not only did I do that, but I took some time to go and visit the physical locations. This way I knew that it wasn't one guy with no traders using a phone and a Commodore 64.

    FWIW...I have been a memeber of this board for almost 2 yrs....I've been with a prop firm for 6mos or so....if you want some info and an unbiased opinion about them just PM me.


    It's Friday. An automatic good day:D
  4. In proprietary stock trading generally there is no employer that is paying to us and there is no bonus. Wee are who are paying to our employer and wee deposit our money with the company and wee would like to know that this money not at great risk. There is no such a thing as a fixed commission rate. One may get better than the other. This concludes the difference between being employed and being self-employed. Do I pay any shit to comments about other companies ? Basically no. But if I can find a new company that looks solid that can provide good execution software and equipment and can cut my cost I would explore that opportunity. That is why I am on this board. As far as other companies are concerned you have to do your own research and go there and speak to people who run the company.
  5. jeffgus


    Each office i have been involved with has had different personalities, methodologies, and environments. If you trade remote go with a group that will support you with a network of remote traders. When I go to "War" I do not want to go in battle by myself. A team approach in very important in this game.
  6. In reply to:

    "Don't take this the wrong way but can't you just go to the websites and/or call the firms (do a little homework) and ask these questions?
    When I was researching firms..not only did I do that, but I took some time to go and visit the physical locations. This way I knew that it wasn't one guy with no traders using a phone and a Commodore 64."

    Uptick, you make a valid point in that a prop firm comparison on a website is not the only step in searching for a firm. I agree with you that a visit to the firm is a must in the final decision making process. My suggestion would provide a starting point for this process. There are several additional advantages to this kind of idea. 1) It would help the countless people who ask the same questions over and over about how particular firms are set up. 2) It would provide a sort of truth in advertising so that people could not make bogus claims against (or for) particular shops. 3) You would have a centralized information source so that you would not have to look up 20 sites, or make 20 phone calls, to find out comparison information. And 4) if rates, fees and profit splits are widely published for all to see, competition should help make these more affordable and profitable for all traders at all shops.

    I've run across many situations in life where not enough information was detrimental, but I've rarely seen a case where too much information was a bad thing.
  7. alanm


    As I understand it, there are issues with what might be considered solicitation of retail customers by prop firms, so it's something they have to be careful about. Publishing commission schedules, etc. could be construed as such if a regulator chose to do so.

    Also, a firm's commissions, policies, financial issues, etc. are all reasonably part of their competitive advantage, and they wouldn't necessarily want to publish this information openly.

    Lastly, as someone pointed out, many things are negotiable.

    However, I, too, had to do a lot of reading through a lot of garbage messages in order to glean some common information (like what bullets are).

    Back in "the old days" of Usenet, we used to have FAQ lists for a newsgroup that were contributed to by the more vocal members of the group with shared responsibility for editing. A similar feature would be useful here, if people are interested in contributing.
  8. Houston,

    Well said. Part of the problem is that there are several people on here with agendas (slandering the competition) in order to attract traders to their firm, since they take a cut or referral fee for new traders.

    Prop firms' fees vary among their traders. All fees are negotiable. They realize that for all the talk of execution and speed advantage, that clearing trades is a commodity product, and they are hanging on to their profit margins by charging as much as they think they can get from traders, hence the higher rates for less experienced guys.

    A detail of fees among firms would only serve as a general guideline since all fees are essentially negotiated between the trader and the firm.

    Posting their rates is a no-win arragement for the firm since it discourages traders who think the rates are too high (paying less than the posted rate), and angers their current traders who are paying more than the posted rate.
  9. One of the problems with posting rates

    is what about the back end?

    A firm that runs it's equipment on a few T-1's and goes down multiple times per day, uses low ended servers and so forth will post a rate

    Than a firm that has spent 10 fold on their technology posts their rate and so forth.

    It isn't all apples to apples. Than there is training. If one firm is willing to train traders and has a great track record but charges higher fee's and puts traders in a contract .

    Differences in software

    redi is free from SLK but a lot of traders aren't happy with it.
    Yet other firms shell out a lot of money on their software.

    DIfferent filters used.

    News services given,

    There are just so many variables it would be very difficult to have everything published.
  10. Just add some more columns to the Prop Firm Comparison.
    Basic commissions, Reliability, Software etc.

    Commissions is the most clear thing. The software, you have to try it yourself to understand if it is right for you. And of course I would like to know that the company has no record of holding traders money and so forth. Is it possible ? Any upset trader or psycho can write anything about any company.
    #10     Dec 14, 2002