Title Trading --> business model (cost of risk)

Discussion in 'Prop Firms' started by traitor786, May 9, 2013.

  1. I am a bit curious about Title tradings business model specifically here in Montreal.

    From what I gather, other prop firms make you put up a deposit. This deposit is used to cover all your looses and when it runs dry you have to add funds. Services offered include benefits such as leverage, training, technology,advice, a chair.....

    For the firm profit is made from fees mostly. Though their rates are competitive, they still profit enough to even allow one to receive full ECN rebates. Also they take a % of ones profit (10 -30%)
    TITLE TRADINGS model seems to be a bit different and at a glance seems like they are taking on all the risk.

    Here is what I have gathered from little and out dated search.

    1. No initial payment required
    2. No experience required
    3. No desk fees for 5-6 months
    4. 5-6 months time frame to learn
    5. Free training.
    6. 50% pay out

    The above list is a ruff idea, maybe not perfect, However i doubt there is any inaccuracy that offsets 5-6 months of potential looses.

    So if the firm is giving you money to trade, any looses are actually their looses. (Naturally fees and desk fees may be taken out of ones profits when and if they are "up")

    Money is generated through the higher take on ones profits (50%). With so few people making it in trading world I cant help it doubt the 50% covers the looses of all the bad traders. (though it is entirely possible that their model is made to be profitable by limiting total looses per day, (trade, or month) to be less then total gains or expected gains per day.

    However for some reason I think there is another story. I just have a hard time seeing a prop firm being this organized and taking on some risk when they can simply make money by more stable means.

    So I assume that money is made elsewhere and am wondering where that may be and how it effects a trader.

    This leads me back to transaction costs and more importantly order execution, Orders placed by more traditional means could actually be sent in a way that ECN rebates are collected by the company removing this advantage from a trader.

    Or maybe transaction fees are higher and a strategy that relies on ECN rebates may be very hard or break even at best.

    Still there is doubt that this extra income would offset a traders looses.

    By them taking on risk there must be a cost to a trader. With the more typical arcade model, one knows where the firm is profiting from and can adjust to meet their and the companies needs.

    I am not sure how inline Titles goal is with the trader and if they can even be met on common ground as I really do not understand the model.

    Any help on the above topic would be greatly appreciated. At a glace, there is little relevant information that is recent on the company and I wonder if there were changes in how if their rank under the various criteria's has changed

    Thank you
  2. coachd


    You have the basics of what Title Trading in Montreal does offer. In terms of making money off the trainees they dont they loose money and will hire about 10 hoping one will become a profitable trader. The only problem working under this model is you will be given a very small amount of money to loose which makes it very difficult to learn to trade. George the owner is a great guy and for somebody looking to break into the industry it really isnt a bad place, just do not think you will be making any type of real money for at least a year

  3. I guess in some ways the same can be said for a newbee entering a more typical model and being over leveraged in a way that that their risk management is off. Starting small is a good thing.

    But still, I have trouble digesting that Title makes more off the one trader then it looses off the other 9. Even if it is possible, why take on the uncontrollable risk when they can go with the other model ?

    I still feel that there is another place that money is being made and just want to understand what their view is.

    Seems like you are/were either affiliated with them or work/ed for them.
    Do you know what type of strategies they prefer (find profitable for them selves) and any advice on getting in the door?

    Thank you for your response.
  4. maul3d


    its a front to mask all the kilos of heroin and cocaine comming from south america.

    kidding... kidding.....
  5. coachd


    I worked with WTS not Title in the past, but I do know George personally. The scalp and I know last I spoke to George they were developing a algo for their trainnes to follow.

    In terms of where they make money is as follows they are paying somewhere between .07-.10 per 1000 shares to clear they trade and then they charge their traders .20 at the low end. Meaning last say as a firm they trade 500 million a month (no idea what there number really is that is just a guess) they turn a profit of about $50,000 just of volume. Now lets assume all their trainnes hit their max loss every day in a month that is a loss of $10,000. So really that isnt a bad loss when you account for the fact nobody even a bad trader will loose every day.

    I can say this a trader who makes it a year without getting fired their first year is only making between 20-30k, second year 40-50k, third 75-100, so do not go in with ideas of becoming rich. And those numbers are if you are the one out of the 10 to make it.
  6. One who would consider a prop shop, especially one with such high fees and "profit sharing", is starting off looking for some things to fill a hole. Giving up 50% of ones profit, and lower fees in return for more funds to trade is fare. you take home half of what you make but you are given multiples of what you have to play with. If one cant put together 25k to try to learn to trade on their own, they should be happy with the growth you mention. They do not take the alternative (trade for one self) as it is not worth it for them.

    20-30k to start is fare for such a person, and taking in to account they do not ask for one to be educated, it could be a dream for a drop out stuck flipping burgers as it has some hope of making 75 k + within 5 years.

    The point of only 1 out of 10 making it is not a fare one as this would be true if they opened up a typical retail account.

    I know nothing about them and cant suggest them, but so far the deal seems somewhat fare in relation to opening a retail account. Compared to the arcade model, is another story but i do not think it is fare to compare at this point.

    You mention that lose is severely limited and that they have algos they are working on for newbees. I am not sure how if you must use their system.

    If lose is limited and the algo are controlled I can only assume that the greater strategy is also severely restricted at least to newbies.
    Im not even sure why they need traders if everything is so controlled ?
    Maybe I am exaggerating the control.

    Does any one know of any resources for any of the following

    1. Interview questions and application. (if they are picky,if they have trick questions at interviews if they are always recruiting)

    2. What can a new recruit trade, what strategies can he use what stop lose is allowed.

    3. What are the controls are enforced on a recruit; can one make their own system and trade what ever they like using any HF trading strategy they like.

    4.What services of value do they offer if any; If one has a trading idea can they contact a programming department to have it made in house, If a recruit needs help can they get any valuable advice or training. Does their training have any value ?

    5. what is the deal? ; how much funds are allocated to a new trader, Can reps use any type of order and any ECN. What is the round trip cost per transaction? how much can one receive in ECN rebates?

    I have looked around a bit but alot of stuff is out of date, I am not sure if they are what they used to be with most the information on the web is from years ago.

    I have checked the "glassdoor" web site for information and reviews but there was nothing of real value there. I was hoping to find a back door instead of the glass door.

    I am surprised they are not that active on the forum maybe elsewhere?
  7. It makes no sence, I thought Title was one of the bigger companies in Montreal. There is really nothing about them on the web. Nor could I find anything on social media or linked in.

    It is like no one works there ?

    There is no job posts, no reviews (but 3) no news for the past years.

    Then I look at smaller prop firms and they are every where.

    Title does not even have upset traders that just could not hack it complaining !

    Would you not expect a company with the structure mentioned to be more aggressive in their advertising ?

    Even on this forum, no employees seems to be around ?

    Its almost like their is great effort to stop people from writing about them good or bad.
  8. Turns out no one is working at their St Laurent office. Employees SEEM to have been let go. It is unclear if this is a move or a closing of a branch. I imagine that their efforts are more guided to to china. But why not also keep the branch that was paying for its self ?
  9. Just to clear up, the office it not for sale. There just is no typical traders there at a glance.
  10. coachd


    Got back about 2 years I know they were working on black box. Possible they went with that model in replace of all those traders who were in that office
    #10     May 16, 2013