Thanks for the link. Just having to VENT my frustration and pain of watching Tim Sykes in the 2nd episode of season one. And this guy wonders why he's not getting investors! Argh! It's unbearable. MojoHD looks like a supercool channel - it's great that they've got the series on the net so Euros can watch it too.
The kid expects to raise millions of dollars while he's shorting microcaps? That's plain absurd. He needs to develop a better model with scalability to the tens of millions before he even considers himself a hedge fund manager. Right now he's a small-time trader.
I've never met them but I would guess that _any_ group that is the least bit selective in this industry (i.e. interviews that aren't a joke) will have negative stories about them. It ain't GS but my impression is they are backing these folks just out of undergrad with no capital contribution.
Yes, and once she incurs losses do you think they will still back her or ask her for a security deposit?
Yes. You are right. All prop shops are scams and just want your money. Weird, the only guy here who doesn't have a college degree is the owner.
They're not scams - they're simply using deceptive marketing. Anyone with common sense knows that prop firms are after your money via commissions (except those with a profit-share who screw the pooch from both ends). The question is whether or not the leverage and low commissions they're providing you are worth it in your individual case.
are there no prop firms out there which are more or less performance based salary jobs? meaning you trade solely with their capital, a tiny guaranteed salary and some form of profit sharing contract. to me this sounds like a decent deal for both sides. the prop firm provides the capital for risk and the employee provides the proven ability to trade profitably. otherwise they are fired before they move off paper trading. i run automated systems and to me it seems like a very similar set up. i put up my capital for risk and each trading agent which has proven itself to be statistically profitable gets some capital to play with (except my cut of the profits is 100%). the up side to prop firms seems that interviewing and testing out a new college grad is far easier and more likely than finding new profitable automated strategies. i think of them as just squishy neural net systems with large amounts of college debt. all this talk about prop firms only being after their trader's money confuses me. as soon as the firm's source of revenue switches from sharing trading profits to collecting commissions and churning trader, it ceases to be a prop trading firm and becomes a trading access service provider. at least in my understanding of what a 'prop trading firm' should be.
Hi Walter You're right to say that they cease to be a prop firm. That gets back to the deceptive marketing - most firms will either take a nominal amount (1%) or nothing in the form of profit sharing. However, they continue to call themselves prop firms even though they're essentially direct-access brokers providing leverage in exchange for your commissions. I may be exaggerating with the term deceptive but in many unfortunate cases, it certainly does apply.