So. Cal. Prop Firms

Discussion in 'Prop Firms' started by YoungOne, Nov 10, 2007.

  1. I'm looking to join a firm somewhere in Southern California, preferbly Orange County. Hopefully one that offers some training and no deposit but If I must put up a deposit I can. Any input is greatly appreciated.
  2. Anyone? There must be some prop firms here right?
  3. The only one I've found so far is Chimera which supposedly has offices in LA (according to their website). I messaged them with no response. But they are a true prop firm in the sense that they take on all of the risk, and share profits with you. So I'd imagine they'd be rather selective in who they hire.

    The next closest I know of is Bright Trading which is in Vegas, and you can trade remotely.. and it's only a few hours drive for their training. But it's one of the "fake" prop firms since you have to put down a deposit.. so for all intents and purposes, it's retail trading with ridiculous amounts of leverage (but with all the abilities of a prop trading firm as far as I know).
  4. LOL, perfect terminology "fake" LOL. Professional traders, for the most part, prefer to keep all their trading profits and don't mind putting a liittle money from one bank account to another vs. giving away profits for a lifetime. Those that succeed at the employee type firms soon realize all this and then switch. Those that don't succeed won't be kept on for very long (why would any firm keep them?).

    Some choose independence, some don't, just a choice, no big deal.

    All the best,


    BTW: Arcadia and Irvine (Irvine is small and full at the momemt, but we may expand it a bit).
  5. Certainly, if someone were a professional trader with a proven track record, he'd opt to go somewhere that allowed him to keep all of his profits. But I'd imagine people who have proven track records aren't the ones interested in prop firms that take on all the risk. The appeal to those types of firms is that it helps to point at a higher calibre of training (since its in the best interest of the firm to make their traders successful). And in the event that their training isn't any good, there is no loss for the trader himself. A firm that profits purely from commissions and interest has less of an incentive to have consistently successful traders, and more of an incentive to focus on advertising their benefits (and attracting traders.)

    Don, I think the distinguishing difference between the two types of firms is more important from a novice trader's perspective. Someone who doesn't have the experience would prefer to initially work at (and learn from) a prop firm that takes on the risk, instead of assuming the risk themselves. There's more of a downside for traders with little experience who need to put up an initial capital contribution. They have no proven strategies/tactics, they are gambling on the ability of the firm to train them properly (and their own ability to discipline themselves to such tactics), and the penalty is their capital contribution. By choosing a prop firm that takes on the monetary risk, it allows the novice trader to focus on learning tactics and gaining experience, without the distraction of P/L.

    After reading through various threads, it seems the arguments given for the differing firms is more a matter of timing. Yes, a professional trader would do much better at your firm, but a novice trader could potentially go bust rather quickly. With an initial deposit of 25k, and a buying power of a million, a loss of 2.5% would bust his account. And I'm sure there are some professional traders who would prefer to have the insurance of not incurring any losses on a bad day in lieu of some profits.
  6. I agree about a novice trader liking the idea of getting trained for free and not minding sharing profits. As most would agree, there are fewer and fewer firms doing this any longer. FNYS has always had a good reputation for doing this, but I'm told that things have changed there quite a bit there in the last couple of years.

    We simply employ the same "stock exchange floor trading/market making" business model that we enjoyed back when we started, and basically duplicated that model for our traders in 1992.

    Find what works for you, and be flexible in your career choices.

    All the best,

  7. don, you forget that at your firm the really active traders pay through the nose for commissions, while on some true prop firms the commissions are truly at cost, and therefore nihil. would you rather have 50% of 100k without commissions, or 100% of 100k and paying 70k on commissions?
  8. I know there is "overhead" put into the prop firms side of the game. They make money if the traders break even, and I think that giving away 50% or so of the net profits is far worse than a commission differential.

    If you have a deal you like, then enjoy it - to each his own.


  9. timcar


    This post does makes a lot sense. When looking at the Bright Prop model if trader usually pays about .006 per share, when trader starts trading > 300k shares(per month) the commish really starts to lower traders profits.

    The zero down Prop model does have some advantages such as the new trader does not pay any cost to Prop firm. Just depends on how much % of profits new trader gets at zero down model.
  10. If anyone believes the "zero" prop guys are giving anything away free, then I have some land if Florida for you. We have dozens that came from places like Schonfeld and are quite happy keeping all their profits. The "zero" prop firms do, in fact, allocate overhead and commissions to the traders, many are much higher than you might expect. They also have weird payout arrangements like 1/4 now, and another half in a year or two, whatever.

    Our model is exactly like what Bob and I enjoyed on the Trading floors with SLK (Goldman) over the decades.

    Now think about this for a minute. If you happen to be successful with "zero" down, within a few months you r account "should" have your money in it, right? Then if you lose that, it's your money that is being lost, right? But when you take money out, you split the cash with the Firm. Independent traders figure that out, and that's why they prefer to be independent.

    All the best, and if you can find one of the very rare "good" deals, please forward a copy of your contract, I would like to see it. The contracts that I have reviewed in the past were pretty restrictive. I'm not saying that there aren't any "good guys" still out there, I would just like to know who.

    All the best,

    #10     Nov 15, 2007