After much consideration of the factors involved in trading, and with many years of options trading experience, does it make more sense to raise capital and trade on my own rather than partner with a proprietary trading firm. Any comments?
Barry, There are pro's and con's to both, trading as a customer, and prop trading. One major pro for prop trading is many firms give you lower commissions since they share in some of your profits. I don't know if this applies in your case but prop firms also give you increased leverage. If your undercapitalized it might be your only way to trade. One drawback to trading prop is that if your firm requires a deposit, your basically trusting this firm to hold your money. If the firm goes bankrupt your money is gone. If your a customer, your funds are SIPC insured. Another drawback to trading prop is that many firms stagger payouts over many months as a deterrent to leaving. If you ever decide to leave you might forfeit a few months earnings. Hope this helped
Barry, I think it would depend on what you are planning to trade and the style you're going to employ. From what I have read/heard, it is extremely difficult to make money trading options OFF-FLOOR. If you're planning to daytrade equities for a living, there are many advantages to trading at a prop firm. Mainly conversion/bullets, leverage, true direct access, and T1 lines. To pay a few hundred dollars a month is minimal to the advantages you receive. (a T1 line in my area costs nearly $2000 per month!). Good luck Ax