I'm a class 'B' remote trader with a registered prop firm in Manhattan. I've been with these guys for 11 months. The 11 months have been rough, full of ups and downs. Generally I've been very frustrated with this firm and their lack of service & communication, but I've pushed forward regardless. My trading has improved over the last few months as I've been exercising better discipline and self control (i.e.: cutting losses very quickly, entering trades based on a setup and not based on greed or FOMO, or the need to play, etc). Learning how to conduct myself as a trader was an expensive lesson, but I've adapted and I'm learning to subdue my inner fear and greed. I am consistently gross probable. I am not consistently net profitable. I am not trading large size either - every month I trade between 60000 and 120000 shares. Upon reviewing my prop reports I discovered that my comm rate was increased. This was done without my knowledge. I asked my trading manager what the story was and I was told that comm rates were increased for all traders effective a month ago. He then stated that he would grandfather me back into my original rate. They would have kept me at the new rate indefinitely unless I spoke up and said something. I feel like I'm being robbed by these people. At this point i'm so turned off that I'm taking a break from trading and I'm considering leaving this place. I would U5 and wait a year to receive my capital contribution back and then register with another prop firm. I understand that I'll have to go through the registration procedure again and get fingerprinted, etc... I'm so disgusted with myself for joining what feels like a bucket shop. I don't even know if I have a leg to stand on - if i want their leverage, then it appears that I am at their mercy. Does that sound about right? What would you do? Thanks.
It is unfortunate but I would not waste your time and capital doing nothing. If I were you, I would continue trading until the end of your one year then make a decision on moving forward. These prop firm when run by people you can't trust are always a problem. The fact is that although you feel like a customer of their firm and want a certain level of "service and support,", you are not a customer of their firm but a member. You are subject to the terms of your contract and their WSP, which is likely very one sided and gives them many rights you would not want them to have. Good luck...make money, then move on.
Thank you for your response. I am eligible for lower comm if I trade more volume. I'm turned off to giving them another penny in comm due to the audacious way they raised my fees without giving me fair warning. I feel like they are trying to increase my changes of ruin or failure. That seems to be the business model for many of these types of shops.
I spent a year ( a little less) at one prop firm after I closed my trading business on the Amex. I then realized that for me, prop firms (where my money is first loss) typically only have value if I can't get proper leverage on my own because my account is too small. IMO, if your can run your own business and not be under capitalized, that is a better model.
I've given some thought to starting my own trading business (i.e.: holding company or capital mgmt company etc). My goal was to gain experience trading with a prop firm and eventually build my account to a point where I could leave with sufficient capital to go on my own. Another option would be to build a track record which I could use to solicit investors. I've also considered taking out a business loan for the capital... I'd like to avoid the latter (I have zero debt and I like it that way). Approaching this realistically - I am not ready to go on my own yet. I certainly think that's the right direction to go in. Even though a prop membership is "independent" work in the traditional manner that we consider work, at the end of the day you're still helping somebody else build their empire.
I was not ready to start my own trading business either. It was January 1985 and I was fired New Years Eve just after the close of trading. I was a floor broker doing professional option execution. I just got married and bought condo three months earlier and I was 24 years old. I always want to trade but was not mentally or financially ready, especially after putting down a lot of my cash for the condo. I borrowed $30,000 from my family to get started. My hands would sweet every day trying not to lose money standing in the XMI trading crowd on the AMEX. I made a little money each month for 6 months scalping, then moved over to equity options that summer. Started to do very well with the switch. Bought a seat and traded for 25 years for myself. Sometimes you just need a push to move forward. Cheers, Bob
How much do this Prop Firms want the kids to make making them valuable? I broke ties with a clown giving me nothing. I can trade WTW and their options with the best, the same with NFLX I bought 100 calls at $1.14-1.28 and sold them on the upward spike. Yesterday's post about $8000 a
Non tradition prop firms make their money on commissions not % of profits. They don't care if you lose money as long as you don't lose their money.
The firm that I'm with has a 85% payout. In hindsight, I probably would have been better off going with a firm with a lower payout. Lower payout firms have some stake in you trading successfully, versus churn and burn with commissions.