Trading Group Managers Question?

Discussion in 'Prop Firms' started by PTG110, Feb 15, 2009.

  1. PTG110


    Ok, So along with me being an experienced trader I also have a trading group of 10 traders. Some are new, some are very experienced.

    I have came across a solid place I would really like to move my group too. The seating is limited as I will just be able to squeeze my group in there.

    Problem is, after speaking with the owners, they obviously want each seat producing x amount of volume/profits to make it worth it for them to have us there which is understandable.

    So I just wanted to know from some trading group managers out there, how is it structured for you at a trading floor if you have some traders who are not really making you or the firm money. Does the prop firm charge you for that seat if it's not hitting certain gross/volume requirements?

    What is the best way to handle this situation so I do not get a bill from the prop firm and we are able to stay on the same page. They asked me to come up with a solution and present it to them.

    Any advice would be appreciated

  2. I'm a little confused.

    You have a trading group that has some newbies. Are you currently responsible for their losses? It didnt seem clear to me.

    At my office, I am responsible for the traders losses if they go below zero, and I am responsible for their software fees.

    In that case, although space would be a factor, the new prop firm would not care about the traders losses in the sense that they would be exposed risk-wise.

    I think you need to give a bit more information on how the new firm expects to make money off you versus the old one.
  3. At some firms, each seat has a minimum desk/software fee that needs to be covered. As a group leader, you will be responsible for these. They can usually be offset by the profits made off the more experienced traders.
  4. PTG110



    You pretty much answered my question on the dot.

    For instance our group must average 20 million shares per month. Lets say 3 of my big traders do this while the other 7 newbies of mine aren't barely doing any shares. Like you said the gains from the big traders will offset the new traders for covering the costs of their seats.

    BUT, What if it isn't a good month for the bigger traders, then how should the seats/fees be calculated? Would it be fair for us to receive a bill from the firm from the difference in shares were suppose to average (20 million) compared to how many seats were taken?

    (bottom line they just don't want newbies filling up seats where experienced traders could be sitting, which is totally understandable. So it seems we would be charged per seat if it isn't doing xx amount of shares/gross.

    Just trying to figure out a simple solution.

  5. As group leader, you are free to negotiate terms as you see fit. It has to be a mutual agreement between the group and your prop firm. Remember, the prop firm needs you as much as you need them.

    In a tough month, your experienced traders should still be hitting their volume requirements. It's just that their P&L will be lousy. Feel free to create your own terms and present them to your firm. It's a very competitive business so I'm sure the firm would be willing to accommodate your needs.
  6. just open your own office. you will get a much cheaper rate and the money you save will more than cover the rent and other expenses.