SMB Capital / Keystone Trading

when I was in college I answered an ad for stock broker training program on our college bulletin board. When I went to their 'firm', their firm rented out space from a hotel...immediately understood what was going on. It was basically a boiler room operation, they were selling penny stocks to grandpa and grandma's, offloading inventory with commissions attached.

these guys were pretty old, and felt a little disgusted that they were still doing it at their age. I didn't want my name associated with the firm and I left, a couple years later they were busted and it was all over the local papers.

until you yourself visit the place, you wont know whats true or not. But do crappy situations exist, yeah, is SMB one of them, I don't think so.

Chris

 

SMB seems pretty straight up to me. I looked through their website and they have most everything right up front, including a quote on your initial commission, which seems a bit high, but unlike all the other places I looked at where you need to go through hoops to get a quote, it was surprising. They have short clips from their remote training program online and they even show the cost of the training program. They must be too upfront to be real...LOL. I am looking to get back to equity trading and may check out their remote program. If I do I'll report back with my experience.

 

I don't understand why some of you don't like SMB. This firm gave me a really good impression. I'm not from US but if I was near NY I'm sure I'd fixed an interview with SMB's guys

 

I have to back up SMB Capital here. I traded with SMB about 2 years ago and learned a lot from the two guys (I dont want to name them without their permission) that run the group over there. They are very fair with their rates and their education is phenomenal. Even if your account washes out while trading with them (as it does for 95% of all new traders with ANY group) you will come out with more knowledge then most of those bogus firms/groups that take your money, charge you high rates, and leave your account to dehydrate.

 

In response to Mr. Bellafiore's post:

1)
-I agree that any fresh graduates looking for trading positions should follow Mr. Bellafiore’s advice and seek a desk that is a fit both ways. In a bulge bracket or otherwise.
-I just think that there are quite a few prop shops masquerading as firms offering the same opportunities when in fact, they do not. It is the false impression that might be misleading for people looking for an entry level trading position.
-Do form your own opinions about SMB or any other prop firms, information off the forums are public and to provide differing perspectives. A candidate would have to take it all in and decide for himself which argument is more credible. i.e. if you get cheated out of your money, thats your fault and no one else's.

2)
-Testimonials listed on a firm’s website about the same firm that they are employees of lose a little bit of credibility due to biasness I think.

3)
-I have read Mr. Bellafiore’s comments on this board and respectfully do agree with some of his comments.
-There isn’t a problem with working with reputable prop shops like “first new york securities” (and they pay you at the very least when you are a trading assistant/trainee) as opposed to a bank, but candidates should know the difference between the two.
-I personally know of people from banks quitting to join prop shops because of what Mr. Bellafiore said, that they wanted to keep more of what they make, but let me form the argument for trading assistants. Your career decisions are different once you are at a director/VP level in a bank.

-For someone who shuns the big corporate brand names, I find it curious to see him throwing statements peppered with ivy league names as a means to impress/validate his firm.
-As impressive as his head trader sounds, working at Goldman Sachs could mean a multitude of things, I wonder if he left a front office trading position to write his own black box because he didn’t want to work for GS, and THEN went to work for SMB? Or was he in the back office? Sounds suspicious. But none of this can be proved in any case.
-Nothing wrong with being entrepreneurial, I just hope that bright young minds out there wouldn’t be misled into taking a entry level position with prop shops thinking that it is a “short cut” route or that it offers superior training to bulge brackets. In actuality, both experiences are vastly different. And I think you give up too much if you make the decision to head towards a prop shop.

4)
-I don’t know about other people posting about SMB, but I wouldn’t consider what I wrote about SMB “cheap shots.” Again, if I were Mr. Bellafiore, I would let my market performance speak for itself rather than spend time on forums posting such messages without any ability to back them up with proof.
- I hope that my comments will never be misconstrued as a deliberate way to “hurt” the reputation of prop shops, but rather to serve as public information for potential prop shop trainees who are looking for a perspective different from the one supplied by their potential employers.
- Some prop shop operations might not be as obvious as renting a room from a hotel ala boiler room style.

Joseph

PS: I have no biasness towards SMB Capital, and I do not work at a prop firm. I just have had experiences with prop shops and banks, took in the relevant information they fed me and processed it to make a decision which to join. Through my experience, I realized the need for more people speaking up to explain what prop firms do and if what they promise are congruent to reality. For example, many prop firms do not offer compensation to their trainees, SMB would be one of them (watch wall street warriors and this fact is painfully clear), but many shops still advertise a “salaried position”, and again, SMB is one of them through a job posting targeted at college graduates. PM me for a link for proof.

 

Say what you want. these prop shops suck the blood out of young naive traders. how many have a chance in hell of making a living paying .0075-.01 cent a share and giving up 20-40% of there profit. most prop shops teach people to churn to generate commissions. If these prop shops had any morals they'd make no overides on commissions like swift and take a piece of the profit only profiting when the trader does. instead they suck them dry before they get a chance to make a dime. go talk to the 100's of traders who went threw hold brothers are other prop shops with a no money gig. few few few made it.

 

How about trading with VELEZ Vaccaro VCM etc?

http://elitetrader.com/vb/showthread.php?s=&postid=1814015#post1814015

 

The prop shop model is very difficult to trust when you are a new trader. You need to have a solid place to work, with traders that can trully help you become profitable. As people mentioned in this post, where the firm makes money when you make money.

But for a trader that has capital and experience, commission rates and leverage are the two of the determining factors when choosing a deal.
Obviously the most important factor is going to be whether you can trust the operation that you are putting your money in.

The firms that require licensing say they are more legit than the rest, and while your money is SIPC insured they are really no different than the rest.
Many traders find it cumbersome to be licensed. As long as the place that you are trading at has full disclosure and you can see all numbers and are able to withdraw profits or any of your capital for that matter, that is really whats important.

Start small and deposit a small amount of money if you have no personal knowledge of the people that you are trading with and see how the system they have is.

Just my two cents.

 

Prop trading IS NOT A JOB. Until you are willing to pay a salary, you are not an employer and really have no right to act like one.
That being said, only a complete moron would pass up sales & trading/buyside job at any firm for a prop trading position. In fact, the only reason a quality candidate would approach SMB or any other similiar firm is if they could not get a REAL JOB dealing with trading elsewhere.

Additionally, SMB is not even a true proprietary firm. True props create an employer/employee agreement and pay a salary. They will not accept your money, nor do they want it. SMB is semi-prop only because you fund your traders, but it is still not a real job.

I think it's nice that some "prop" firms are trying to pursue their business in an honorable manner, but there is no need to paint disillusions of how the industry works. IMO, the whole stock prop trading game is played out like Vanilla Ice.

 

Why is it that most prop firms require a series 7 but SMB Capital does not? What are the legal and technical differences?