There are so many threads referring to T3, but it is difficult to sift through all the threads referring to this shop. What is it like to operate with this shop? They indicate they will sponsor for the 56 license and for every $5k give $100k BP. That is 20X leverage and can wipe equity real fast. Is this a day trade stock only shop? Do they require track records, if so what time period? 12-18 mo. Is there a monthly fee? and what are their trade costs?
Additionally it appears to me that operating with T3 would be in the form of membership interest in their LLC. IMO it be appropriate to evaluate the operating agreements and subscription agreements to determine what the business arrangement would include. So it appears to me my capital contribution get's me an ownership interest and in return they provide leverage. Is there an incentive to recruit other traders and get an over ride on the trading profits of other traders in your down line so to speak?
When you join a registered firm, the business arrangement is this: 1. You become a "Class B" member of that firm, which means you are not an owner and do not have any voting interest. 2. You place a capital contribution with the firm (usually around 5k or more) and use firm capital to trade with greater leverage than standard PDT rules. 3. Losses are your own, so your "at risk" capital is only the amount of the capital contribution, and the capital is locked up for one year as per SEC Rule 15c3-1. If you add more capital, then any added capital begins its own one year cycle. 4. This is not MLM so yo do not create a downline, lol! However, in some cases you CAN collect an override on other traders' commissions by creating a branch office. 5. You do not require a track record, just a clean background check, a pulse, and $5k. Yes, T3 is a day trade shop, as most other registered firms. Some may allow for overnights, but certainly not with a $5k capital contribution. See the firm's financials on SEC.gov, which will answer most of your questions regarding the financial structure of the firm. Regarding costs, it's better to call and ask them rather than rely on a message board, as there are fixed costs (data fees as a "professional" trader), platform fees, and variable costs such as commission per share and ECN fees/rebates. You're on the right track in searching registered b/d's to trade with, however keep in mind that unless you have a very strict trade criteria to use the firm capital wisely, then as you correctly stated, the "20x leverage can wipe the equity real fast."
Ok thanks for clarifying. Yes, at some firms the traders are "Class C" and the branch offices (trading groups) are "Class B" members.
So this is like I am an investor into an an investment pool that charges desk fees, operating costs, one year lock up and 20%, and I do all the work. Let me distill this from my perspective and experience with LLC's. This structure is similar to a hedge fund (or any investment group, pool, whatever) getting 10-30% of the performance and the investor does all the work. In exchange the investment pool simply provides the leverage through SEC and FINRA rules.
It's a partnership, structured similar to a hedge fund, with various members of the partnership. Traders are limited members and receive K-1 statements for tax purposes. And as dealmaker stated, negotiate the 20% cut. If a firm thinks you are a newbie who hasn't done any due diligence, then you'll probably end up with a raw deal.
Commissions range from $2.50 to $7.50 per 1000 shares, depending on initial contribution and experience. Profit split with the firm ranges from between 75% and 95%, also depending on initial contribution and experience. Plus need to take the series 56 as I have no interest in the series 7
Thanks for the insight. Just a note on language. Partners and partnership agreements are in partnerships Members and operating agreements are in LLC's