If you start out at a prop firm without any capital contribution (essentially, trading for the firm), and eventually become profitable, can you easily switch to the traditional deposit with 100% payout afterwards?
Everything is negotiable, but good luck these days finding a prop deal with no capital contribution required. Such deals may be out there, but I have no seen any for trading stocks. I have no experience with futures or options, but for stocks if you are doing decent volume you can pretty much write your own deal these days. If you can do a million shares a month, your commissions get down to like .02 cents/share, which is practically free. I have see that deal at multiple firms offering 100% payouts. If you don't think that you could make money trading on your own and they don't require money from you up front, and they have successful traders who are going to teach you, then by all means take whatever they offer; 50% payout or less is more than fair in that case.
Thanks for the tip. I won't be doing anything near that much volume starting out. Another question: 5K deposit, 100% payout, .005/share, no desk fee, does that sound about fair?
To be clear, the above was not an offer I received, just something I would like to ask for. Is this within the ballpark for a place to trade in NYC?
This can be a fair deal if the rate scales down with volume. Say .0045 at 500K shares, .004 at 1 million shares, etc. There are more things to consider: 1) if the software is top-notch (i.e. anvil, lightspeed) you may consider paying a little more - stuck quotes and orders can cost you more than any commission will if your actively in and out of the market all day. 2) how much buying power are you getting 3) how much buying power are you going to be using up for the whole day (i.e. holding positions for the whole day, 2 days, etc) 4) is it a reputable firm that will pay you out at the end of month if you are net positive You wouldn't believe the variations in deals from one trader to the next on a trading floor. Volume is the key factor for the majority of the variations in deals. The next factor is buying power requirements.
actually 3.00 per thousand is fair , with avg vol.. imo. payout should be weekly , its the traders money period.