prop firm dilemma

Discussion in 'Prop Firms' started by simpleplan, Feb 4, 2004.

  1. I can make money trading at a prop firm but I have this nagging guilt like I will get fired if I don't generate enough commissions even though I make money.

    Here is my question. It sounds stupid but here it is:

    Am I supposed to make money or generate A LOT commissions? Note the keywords "A LOT".

    I can generate a lot of commissions also by scalping a lot but then I churn a lot also and lose a lot of my profits.

    If I don't scalp aggressively then I don't churn and I will make more money. Sometimes a lot of money BUT I don't generate A LOT of commissions.
  2. Sanjuro


    I'm sure it's fine if you make money and don't generate a lot of commissions. You will have to pay a desk fee when you don't trade much.
  3. This place surprises me pretty often

    Here's my advice: Look out for number 1! What makes YOU lots of money? Do that!

  4. Dustin


    Trade prop remotely so you don't have to deal with glares from the manager.
  5. Soesman


    I was the manager for a few big prop firms and now trade for myself. here is the deal....

    now days, most prop firms ask you to put up 5-10k of your own money..they then back you for BP upto and exceeding max leverage amounts. If you trade and the commisions you generate cover their costs and add a bit of profit, you are fine. If you are making good profits and not trading large amounts of shares, you are still fine, most shops will let you keep 60-98% of your profits (depending how much you put up), so they gain that way too. once you have burned through your risk capital, they will cut you before you eat into theirs. No risk to them.

    check out all the firms you can, what systems they use..what the comission rates are, is there a per trade fee. And most of all are there any very sucessful traders trading there and do those traders get a piece of you if they make yo successful...

    If you don't have a liscense and have enough capital, you might want to find a great execution system, and play for yourself, limiting yourself to the losses that would've gotten you fired at a prop firm.

    this is just one man's opinion!
  6. rwk


    Reputable prop firms want you to make money so you will stay around. The more commissions you generate, the happier they are -- it's human nature.
  7. Soesman



    my glare was more of an all knowing wise glare! :D
    the advantage I had when managing prop firms was that I was a reasonably successful trader that was in the same position as my guys,many times myself. I hated when managers who knew nothing about what a trader feels or goes through tries telling him what he has to do to be successful.
  8. Simple plan. Put up your own money, keep all your profits, negotiate a fair rate. If you are in/out for less than a penny when trading in 2,000 share lots, then the rest should be yours (basic 1-2 Million shares per month). Even at the "rack rate" you should make profits and keep them.


    If you trade just a little and are selective about your trades, you can still make money by showing bigger gross profits (and keeping 100%, as I said).
  9. With some firms paying out 90%-99% of profits, how else do you expect them to make money. You have to assume that they expect some level of commissions (unless they make 1% on $1mm in profits a month)
  10. Soesman


    great minds think alike!!!
    #10     Feb 4, 2004