Series 7 to trade my Own money?!

Discussion in 'Prop Firms' started by AZ_Trader_Girl, Mar 15, 2004.

  1. I've been looking to trade my own money at a pro-firm like for example (Assent, Hold Bros, Echotrade (etc) )and at least at Echo, it looks like you have to have your Series 7 even if you want to trade your own money...Am I right? If so, then why do you NOT need it at the other firms (like Assent, Hold Bros)?

    If you have to be an employee for at least 4 months before sitting for the exam (I read that somewhere but I could be wrong), then that's 4 months of wasted time for everyone involved seeing as how I want to trade my own money and I can't do that until I have the license, right?
  2. You need to do some more homework. When you work at a prop shop, you're not just trading your own money. You're using big time leverage from the firm. In order to do that you must be an off floor member of an exchange, which requires the series 7. I don't have personal experience, but have checked into it. There is no 4 month wait. You contact the company you want to work with, they sponsor you for the series 7, you complete all the paper work and regulatory stuff (plus any training) and then you trade.
  3. No doubt I have homework to do, that's a large reason why I'm here on the boards... but what I'm still confused about is why prop firms like Assent & Hold DON'T require you to use their leverage and in turn don't require the series 7 where as Echo does?

    I'm missing some very basic info here, I just don't know what....


    Hi AZ,

    Bundlemaker is correct, there is no waiting period. You will have to wait a period of time for a "window" to open up for you at the NASD. Once the window is open you will be given a timeframe to take the exam(s). However, some firms may have their own waiting period.

    There are two primary structures:

    1) Trade prop as licensed (7,63,55 or just 7 if PSEX or AMEX) trader with a firm. That is a true (omnibus/prop) structure, when you are trading for a firm.

    2) Trading with a hedge fund. In this case you're trading capital that does not belong to a firm, but is a part of an LLC in most cases. In this situation a license may not be required since you're trading private money.

    In either case, you are most likely required to pledge some amount of capital. This pledge is used to collateralize your losses, and is "not supposed" to be commingled with other monies.

    Both situations offer competitive leverage and pricing. Do some searches here on Elite. Don Bright is a regular here and has posted quite a bit on the topic. If you need more help on the topic, drop me a PM. I know the area very well.
  5. jai,

    thanks for your insightful posts. am i correct in assuming that floor traders don't need a series 7 ? it seems to me that a series 7 is simply a way for so called prop firms to seperate those who are serious from those who are not. unless it is money raised by a public offering is not all money "private" ?? any light you can shed on this would be appreciated.

    thanks !
  6. Mecro


    Basically it's proprietary vs retail. One of the few advantages of a prop trader vs retail remains that you get more leverage although even that is changing. It also used to be that only prop traders received office space and computer stations

    If you just care to trade, go retail. You still get leverage, 4:1.
    Personally, I feel that prop blows because of the ridiculous regulations. There are almost no reasons left to be prop.

  7. unless you are funded 100% with nice coin.........

  8. ertrader1

    ertrader1 Guest

    I have two words for the reasons you need a 7 to trade prop..POOLED MONEY....look into the definition to the latter.

    why holds does not require a 7 for PROP....i dont think its a legal requirment.........its more of an insurance policy for the Firm.

    Schonfeld did not originaly have a rule on the serious 7 and 55 until they got sanctioned by the SEC. Then they wanted to pass on liability to the traders..HENCE THE 7 and 55 becomes the norm for all traders...I think many PROP SHOPS followed suite.

    There are ways around the 7 and Holds, i belive did adopt the 7 rule for Props, if im not mistaken, back in like 1999/2000 but dont hold me to this, i was with Schonfeld, not holds.
  9. ertrader1

    ertrader1 Guest

    Dont try and explain to me you need a series 7 for client money...because you are the client at a PROP SHOP when u put up some money....and the Series 7 was designed for BROKERS....first off, in order to give qoutes to customers....

    The trading world adopted the 7 because it passes on liabilty...
  10. lol, er. thanks for the info !

    #10     Mar 15, 2004