Prop firm Leverage and Green Trader Pal Talk

Discussion in 'Professional Trading' started by neisykay, Feb 29, 2004.

  1. Did anyone listen to their talk on TH about the SEC and prop leverage? If so, what did they say?

    Schonfeld is out there saying we should be 'concerned' and I want to evaluate the truth of that admonishment.

  2. I would be concerned for two reasons. First, Schoney is correct in the way he interprets the regs. There is a federal reserve memo that is clear that if you are taking 100% of profits and losses then you should be treated like a customer and meet reg T. In the extreme, there is one school of thought that if you are a prop trader you are not supposed to take any losses. If you are advantaging yourself of net capital then the firm is responsible for the losses not the trader. However, the regional exchanges that most prop firms are members of have interpretted the fact that you are an investor in an LLC and are therefore subject to risk and losses so it is ok to be allocated a loss from trading.

    Second, I heard from a good source based in a southern state that Steve is the one pressuring the SEC and other SRO's to give him a no action letter or force the other prop shops to change the way they do business. He wants to put all the other shops out of business because he knows that Bright, Carlin, Echo will not take a traders loss.

    If I were still a prop trader I would be concerned.
  3. Thank you very much for that intelligent and useful response.

  4. Eugene


    Keep in mind that Green Trader makes money setting up LLC's and Hedge funds...You can act like a hedge fund through bright et al, and accomplish the same task...especially if you manage under 30 mil...I like Greentrader, in fact they are doing work for me, but there may be a vested interest to make competition sweat a little.
  5. Yes, greentrader is a bit too pushy for me - on the LLC etc.

    But I am trying to find out as much as I can about this prop firm leverage thing. Interesting thought that maybe Schoney himself is the one nudging the SEC.
  6. Russian Roulette.

  7. .... a little dense here, exactly what are you referring to.? the leverage or s. schonfeld?
  8. Weasel


    I've been talking to Bright's remote trading mgr about coming back to prop trading. This thread concerns me. Is the SEC considering squashing the leverage given to prop traders? I don't want to go back to this and find out the industry is going to die. I'd appreciate some feed back from The Don of Trading...Don Bright. :confused:
  9. There has been nothing going on, period. My brother and I spoke to the Schonfeld people at the expo and asked that they stop this silly rhetoric. There is nothing to be concerned about, just "over-exuberant" sales talk I'm sure. I'm here if you have any further questions. 702.739.1393

  10. To echo Don's point, I did get a call from the Schonfeld people post expo and they were less adamant about this issue...more of "will check further with compliance to find out" kinda attitude.

    #10     Mar 4, 2004