Try this. Instead of the normal 1000 share order, "accidentally" hit an extra zero, and you will have your order rejected regardless of whether you're trying to get to isld, inca, redi, or nyse.This is a retail requirement, and is one of the limitations. "Direct access" may route you to ecn's via the broker, but for example, you cannot "sit" on several orders at one time if it exceeds your margin requirements. I am not an "expert" on all the details involved (and things do change), but I know for certain that you must be licensed to have access (some firms may try to get around that, but I would be a bit concerned about their "self-policing." For most retail traders it won't make any difference anyway, but for us it would be a big nightmare. Don't get me wrong, I am not trying get any retail people upset, thinking that I am trying to preach the benefits of prop trading...it is just a different ballgame.
Try this. Instead of the normal 1000 share order, "accidentally" hit an extra zero, and you will have your order rejected regardless of whether you're trying to get to isld, inca, redi, or nyse. No kidding. This is a retail requirement, and is one of the limitations. I'd call it a safety feature, not a limitation. Still, does that mean that there is no such limitation at your firm? Is there any limitation as to how many extra zeros one can hit "accidentally." Or can I just buy a few third world countries without regard to my available trading capital? Do you simply mean that this limit is enforced by the risk department, and that they're flexible and make their decisions based on more complex analysis, such as trading style, arbitrage or hedging vs. speculation etc? Or is there an actual figure, but you're software is not programmed to enforce it, and you just chose to call it a feature? voodoo
I agree, wouldn't your trades have to go through some sort of automated screening process first? How do you prevent traders from assuming abnormally high risk positions, BEFORE THE TRADE GETS FILLED? On the other hand, isn't this all academic? One more router hop and a buying power verification process shouldn't take more than 30 milliseconds on average. What's the big deal? From my experience, retail systems like CyberTrader or Tradecast are just as fast as REDI+. And--again based on my experience--when it comes to accessing ISLD or ARCA, these systems are slightly faster than REDI+.
C'mon Don. I trade from home on a DSL line, and I can get IN *and * OUT of a trade in under 2 seconds. 1.9 of those seconds are my slow keystrokes. and a coffee break. Whatever extra 'book keeping' is being done by my brokers is done at the speed of light, and has NOTHING to do with my fill, or my making money. And no, I dont want to buy 10,000 shares by mistake, thanks anyway.
I take issue with this nonsense as well. Don acts like there is virtually no limit on the amount of stock his traders can purchase. I'm certain each of your traders has a dollar limit they can work with (try adding 10 zeroes and see if that goes thru) just as retailers do. This condescending attitude about retailers being a sub-class to "professionals" is getting old. This is not about a damn thing except bringing home the $$$ at the end of the day. Forget all your connections and software and 30 squillisecond round trip execution times, this is about making money, period. I successfully trade swing retail from home...and I know others with substantial accounts as well who do the same. I'd be willing to bet we do better than the majority of pro daytraders...not all..but the vast majority. Don, you should acknowledge that there are those of us out here who do not NEED a prop firm and that we will always be better off without one. We respect what you do and your choice to do it in the way you do. I expect you to respect the fact that there are legitimate paths to riches through trading other than your own.
The main difference between trading at a professional vs retail firm is the use of margin. In house ,traders at Broadway Trading and Pro-Trader for example, are really "professional traders" who use customer margin. The Broker/Dealer margin at professional firms is a big advantage for traders who know how to use it. You can trade matched pairs, Conversions , Bullets and Synthetic Call postions with very efficient use of capital. AT LWS, we are mainly a daytrading firm , but the margin can be a big advantage at a pro firm. If you trade at a pro firm, you would never go back to trading as a "customer"(assuming you are a Series 7 professional). I say this with no "ego". The efficient use of capital makes a "big" difference in my opinion.See our margin examples www.stocktrade.net/services/portf_hedging/hedg_exmpl.htm and professional margin requirements at : www.stocktrade.net/services/portf_hedging/hedg_requir.htm As far as traders being "better" at pro firms, that is a matter of opinion. There are some great traders at Pro Trader & Broadway I wish were at our firm. Since pro firms offer SOES, that might be a good reason to switch to a pro firm. I know Don Bright does not like NASDAQ for many reasons, but if you can trade NASDAQ with pro margin and you are a true professional trader, why wouldn't you trade at a pro firm? Gene Weissman Lieber & Weissman Sec., L.L.C. gweissman@stocktrade.net
Just a point. You are probably referring to ECN trades on the NAZ, which are fine for most people (the "nano-second" difference will only apply when they "match trades" in house...which only matters when you are trying to take out offers or eliminate bids in a fast market). Keep making money!!
I have 4x margin now that I rarely use. I have spent years accumulating the right data mines and tools to bring my setup to optimal efficiency for my personal style. To be forced to pay $600 a month minimum, then be given different tools and software and have to travel to an office every day to be in a room with (who knows how many) people of varying skill levels is not an attractive proposition for me. With this much $$$ riding, I like to control my environment. The prop firms exist to make $$$ for themselves. Why else start a prop firm?...out of the goodness of your heart...to share your wealth of trading knowledge with the masses? That profit must come from my pocket if I am one of your traders. If I'm wrong about that, disclose your financials and start donating your profits to charity. I respect what you guys do. It's a business like any other and it serves a useful purpose for some folks.
ktm, Don't get me wrong. Retail firms are ok and professional firms and fees are not for everyone. 4 to 1 customer daytrading margin is fine. Well run retail SOES firms are good places to trade. My point was that if you are a "professional full time Series 7 trader", my opinion is extra margin and services like being able to trade matched pairs and have access to conversions are of benefit to many traders.I'm not putting down retail traders or professional traders at retail firms, just commenting on efficient use of margin that professional firms offer. Our clearing firm Spear,Leeds & Kellogg clears for both types of firms. Gene Weissman Lieber & Weissman Sec., L.L.C. gweissman@stocktrade.net