Swift Montreal Closing?

Discussion in 'Prop Firms' started by mtl_trader, Feb 14, 2007.

  1. Given the above info about Swift Trade and its new competitor comprised of former Swift traders, one now sees the timing of this week's National Post article (shown below) in a different light.

    A revelation that jumps out - Peter Beck doesn't even trade.

    National Post
    Monday, February 19, 2007

    Race goes to the Swift
    Proprietary trading model: Swift Trade's success stems from flexibility

    By Philip Quinn

    Swift Trade president Peter Beck weighed the attractions of Paris with the opportunity to tackle the next big challenge of his career. The challenge won out and Mr. Beck returned to Canada to eventually start up Swift Trade Inc. in 1998, the first Canadian company to supply a trading floor for day traders.

    Swift Trade gained attention and prominence as day traders helped stir the froth that created the tech bubble, which popped up in 2000. traders could open an account with Swift Trade for US$25,000, and as Mr. Beck says, "the best traders are today wealthy individuals... who made millions.

    [Even] when things turned around in 2000," he said, "they traded the short side [on stocks] and still made money."

    But prizing flexibility - Mr. Beck claims not to want to be locked into a business plan - he saw the writing on the wall for the majority of day traders as the stock markets plummented. The final nail in the coffin for day traders was the move to decimalization on the U.S. markets in April, 2001.

    "Momentum day traders went in for a certain move, a stock up eight levels was 50 cents, so on 1,000 sharesyou could make $500. The problem was once stocks went decimal, you could still catch an eight-level move but it would only give you $80 on 1,000 shares. The profitable potential considerably shrank."

    After the trader paid the administrative expenses on his account, he'd pocket $20. The "scalpers" who had often bought and sold a stock on a movement as little as 61/4 cents were leaving the business. Swift Trade found that within weeks of the change to decimals, its offices and trading floors in Canada (eight in total) were emptying out.

    'We had to reinvent ourselves. We had no choice: The existing business was going down the drain," said Mr. Beck, who trained as a chef in Hungary, before emigrating first to France, then to Canada in 1979, and who has worked in real estate and run a long-distance phone company.

    Swift Trade decided to move to a proprietary trading model, in which it hires traders on contract to trade on its behalf using one corporate account.

    "The cost of managing an account is your largest cost, so once that's cut out you can actually make a smaller profit and still be profitable," Mr. Beck said. "Before, each trader had his own account at the clearing firm and so each trader had a cost attached to that account. Right now, only one account has a cost, which is shared by 2,000 people, so its miniscule."

    The traders are paid a percentage of the profits they make and, even more important for Swift Trade, it has done everything it can to minimize its risk so it will always make money no matter what direction the markets are moving.

    "What is controlled is the risk. The risk is fully computerized now," Mr. Beck said." "It wasn't when we started. Based on the performance of the individual, they have a certain dollar amount assigned to them that they can do during the day. The minute they reach it, the system shuts them down without human intervention."

    The company aggressively exports its unique trading model all around the world, including China and Vietnam, offering entrepreneurs the opportunity to open affiliate offices.

    Swift Trade has 121 offices, and Mr. beck hopes to reach 200 in the coming year. Local managers are trained in the system, then do the hiring and training of the traders. The company's largest trading floor is in China, with approximately 70 people employed.

    "Most of those employees can't speak a word of English," Mr. Beck said. "They don't need to: You're looking at numbers" on a screen.

    Company traders buy and sell between 220 million and 230 million shares a day, with the focuson such key markets as the New York Stock Exchange, Chicago Mercantile Exchange, American Stock and Options Exchange and the Nasdaq. But other market exchanges have been added to the mix, such as the London Stiock Exchange, with Euronext, which allows access to local exchanges in Paris, Amsterdam, Brussels, and Lisbon soon to show up on Swift Trade's computer screens.

    Continuing business hurdles for Swift Trade are the changing regulatory environments, gaining access to new exchanges and then makingcompany traders comfortable with trading on those exchanges. Mr. Beck prefers to grow the business by taking it to the next level, which is more of an intellectual challenge than a formal business plan.

    "I'm a entrepreneur who believes that the greatest advantage an entrepreneur has, especially at the beginning of his business, is flexibility. So the more formal you make your start-up, the less flexibility you have. I could have been sitting down and writing spread sheets until the cows come home with wild estimates. You have to believe that the idea you have will be profitable."

    The money is certainly there, but more important for this 51-year-old entrepreneur it's the excitement, even though he no longer trades stocks.

    "You just feel the excitement building on the trading floor and on the different TV screens as you see what's happening in the markets. You can ask anybody who gets into the markets at this level: They just find it very exciting. Most people get hooked and they don't want to do anything else in their lives."

    The company expects to hit $60 million in revenue this year, with an annual growth rate of 30% to 40%.

    For Mr. Beck's Swift Trade co-founder Charles Kim, there's a simple but compelling explanation for his company's rapid success to date.

    "I have not met another person who can juggle so many things in his head at the same time," Mr. Kim said.

    "Peter can look out one year, two years, and five years and make uncanny predictions about which way the business is going to go and we're in a business that's changing every month because of regulatory requirements and markets merging." //
    #21     Feb 23, 2007
  2. stylelad


    cant find 'World Trade Securities' website or contacts to discuss the opportunity of joining em...=))))
    #22     Feb 24, 2007
  3. Rhue


    *Correction: the French company was sold for $100 million and Sammy is injured. I apologize for the errors.
    #23     Feb 24, 2007
  4. 7-2os


    Is it true that Saxon Financials is trying to get in to stock business and attract some of the swift guys? I have herd they are looking for a couple experienced traders and are willing to offer them excellent splits… dose anyone know anything about this and anything about Saxon?
    #24     Feb 26, 2007
  5. i just spoke to them they seem like they are not really soliciting anyone , they are a corporate structure where the traders are partners and they pay 50% + if you qualify
    very interesting , they said they reply interested parties at info@worltradesecurities.com they are building a new prop concept
    good luck
    #25     Feb 27, 2007
  6. ? traders are partners and they pay 50%

    something is wrong in that.

    Or its like Walmart associate :p
    #26     Feb 27, 2007
  7. Not sure if you mean by "them" - Saxon Financial, who is now World Trade Securities??

    Or, World Trade Securities, as its own startup entity, is hiring only experienced,
    proven traders in order to minimize potential net losses
    (as apparently experienced by similiar, but more open model Swift Trade, per a prior post in this thread).

    Could be that WTS has an all-partner trader member deal with 50%+ payout, as you say, and
    the partners, as additional incentive, all share some percentage of potential year-end company profits,
    or receive some type of bonus based on personal production, or both.
    #27     Feb 27, 2007
  8. i dont know how their structure works , but i heard they are offering the first traders that sign up with them with a minimum of revenues , a 75% payout and all expenses paid trip to south beach for the grand opening party at Mansion club in miami ,theese guys must be traders , and i asked if i can open an office they were not really interested i am curious to see what comes out there
    ps i did not qualify for their minimum
    #28     Feb 27, 2007
  9. by the way Wall mart is one of the biggest CO in the world
    #29     Feb 27, 2007
  10. Rhue


    I really doubt the 75% and the vacations paid as none of the owners informed me of this. I'll confirm on this but as solo stated this could be a sweet deal...

    Other than that, yes traders are also partners in the company. The shares given are determined by their profitibilaty etc. Right now they are not hiring but keeping and developing the limited amount of people they have. For now its quality over quantity and it's not about hiring only the top traders, the company wants to train and develop their own traders aswell. Cheers
    #30     Feb 27, 2007