This thread is intended to discuss possible conflict of interest and risk derived from prop firm staff and/or other traders in a prop firm having access to your position, trading strategies/tactics, etc.
EX: let's say you are sharp on stock XYZ. It is much more difficult to make money if you have someone else with 10x buying power piggy-backing off your entries/exits. I see a degree of collaboration at times in certain stocks - seems like a double edge sword as liquidity at key prices is tough to get. Big picture --> do prop traders actively trading a stock have that big of an impact or is their impact dwarfed by the rest of the spec players in the market? Also, I see any prop firm staff (IT, management, risk management) BUT ALSO TRADE is a huge conflict of interest and red flag - any thoughts on this.? The darker side in me says that a phone call or two and one could have your position run on big time if the intent is there. EX: "Joe Smith" was a real @#$% to me yesterday. He is maxed out in this position and underwater. It is about to break against him even further. Let's see if we might be able to "help him out " a bit... and then indicidually or through a team effort, the stock is piled on against Joe to blow him out or incur a larger loss... Keeping firm names and stocks anonymous, anyone ever have experience in these situations? Thoughts that this might have happened? Account size. position, etc. is valuable information....
you can always request that your P&L be private from anyone except the risk manager and maybe branch owner. no one else really needs to monitor your positions. if you are a profitable trader, your firm should be willing to honor your request.
I have heard this before, but think about it...we prefer Not to know anything about specific trades or positions....the only time we would ever even notice is if you show up on our risk control, and if you do, you're losing a bunch of money that day...and, why would anyone want to know how you happen to be losing money? Overall I say it's a none event, not that there aren't "bad guys" somewhere out there that "might" try something this foolish, but I think it's the least of your worries, trading is hard enough as it is. (Maverick?) Don
it would be just utterly silly for a prop firm to show interest in exploitin' its traders edge. afterall u are only after makin' money and the more your traders make money the more your bank acct gets fatter, innit.
Sorry, Don... but this is untrue... pure baloney. I interviewed with Bright Vegas a while back... And the Vegas "manager" showed great interest in my very sophisticated trading methodology... Stated that he was going to work closely with me (to learn exactly how I do it)... And then, of course, pile 20 traders into my game. But I'm no fool... and it's not so simple. Bright would have to code $100-200,000 worth of software infrastructure to do what I do... And then put those 20 traders on a one year learning curve. That's it... I'm NOT saying front-running or any direct involvement in someone's trading. But Bright is OK... probably best of a pretty rotten bunch. If you are a genius and profitable... ** Every single prop firm is existence **... Will observe you, steal your methodology, and pile traders into your game. You have zero chance of any right to "intellectual property"... You will be a de facto employee of the prop firm... nothing more.
If nobody knew it then it would not be an issue. It's hard to play the game... I think of Kurt Russell in the Michael J Fox movie. never reveal what you want... If you are a genius and profitable... ** Every single prop firm is existence **... Will observe you, steal your methodology, and pile traders into your game.
In complex software terms... 200K is chickenfeed. You might get 3 guys in their 20s for one year. That's just to clone something... Not invent and evolve it over many years... And keep it running and evolving to "stay ahead of the curve". You are really talking PER YEAR. Your average corporate programmer... Would be in over his head designing/coding real-time algorithmic systems. The software engineers doing it on Wall Street are all Masters/Doctorate... In the Top 10% of their field... pretty much idiot savants... And making well over 100K. That's why it's so laughable... To see swarms of total amateurs at ET... Stringing together primitive "Automated Systems" with baling wire... Or betting the ranch on some generic off-the-shelf software... When they are up against the Best and the Brightest of the software and trading world.