Usually somebody that takes care of their customers isn't worried about them leaving. While a company that has little support and isn't competitive long term is. There have been reports that the worst cell phone plans/carriers usually stick you in 1 yr to 3 yr contracts while the best let you go month to month. Why would you leave if you have great service and you are paying a competitive rate? Think about this for the prop industry too Robert
I will qualify this post by stating clearly that I am not a lawyer. That said, apparently neither are some of the jack-asses who make up these non-compete clauses in some prop. contracts I have seen. My experience is very limited but some that I have seen are such a joke it's laughable. You can't contract out of your legal rights! Some of these clowns make these things so restrictive as to make them totally unenforceable and hence null and void. Bear in mind the relationship..... employer - employee, not exactly two equal parties. Trying to prevent you from earning a living for two years if things don't workout is totally unreasonable. Just exactly how are you being compensated for giving up two years of your life? Dude, if your not comfortable defending yourself don't sign it! But don't believe for a second that just because some bozo writes something on a piece of paper and you sign it in a moment of weakness that they own your ass! Good luck.
I know in the past it seems Hold Brothers did some things to piss off alot people. But I can tell you, they have gotten their business into really good shape. They just went self clearing, which would not be possible if they were not financially stable. They have gotten a bunch of good traders who are some of the best in the business. As for the 2 year contract, I'm not a big fan of them, so I would try and negotiate with them to get it reduced or waived.
If they offered you a no-money-down deal with reasonable commissions (less than 1 cent per share and no tickets or desk fees), then take it. It will take you at least a year to become profitable and then you only have another year left. I wouldn't be all worried that you got a shitty package when you're a stone cold newbie who's main concern should be learning to trade and avoiding blowing out. Good luck.
I am not a lawyer: A couple of points. Non-Compete agreements can only be structured in certain ways. If an agreement prevents you from working in your choosen profession then it will not be deemed valid. The contract might be valid if the purpose is to stop you from taking traders from their firm to another - standard practice in many businesses. Employment contracts are need to be balanced: Other than a salary what is Hold giving up ? Are they committing to training, working conditions etc as part of the contract ? You may have no bargaining power, particularly if you are just starting out but you should carefully weigh their agreement to others before you go on board. If you have the funds, have them invetigated by a PI or other business investigation firm to determine their financial viability and the legitimacy and ethics of the principals. Have an attorney with specialty in the trading busines check out the contract.
Enforceability of these type of agreements will depend on a lot of factors, such as state law, the jurisdiction, the geographical scope and the activity limitations in the agreement, willingness of the parties to litigate, and perhaps as was suggested above, relative bargaining power of the parties. If you are definitely considering this as a long-term career move, it might be worth consulting an attorney to evaluate the situation - the initial cost sucks, but consider it insurance against finding yourself in a much worse situation. JMH(non-legal)O
I really appreciate all the replies... After some thinking, and reading all the responses, I'm going to call Hold and tell them to either waive the non-compete, or I walk away (no skin off my back). I think I deserve better than the one-sided contract they offered me. I'll let you know how it pans out.
RE> Shop harder, there are props out there that will get you in around 5K. 100%payout, decent commish no locks. Could you PM me, (If you don't want to publicly give this out) the firm that has this rate structure, if you know. I'd greatly appreciate it. I know it's not Bright...yet..have heard their "required" trading capitol might be dropping recently... Good trading all... mrktwiz
a lot of the initial posts sounded like they were speaking from their own position, not yours. who are you. a newbie, inexperienced, non licensed 'prospective trainee,' who should want to avoid risking your own money, because you'll need it while you're losing money. who are those that told you to shoot down the deal, experienced proven traders willing to risk their own capital. you're going to have to either put up your own money (probably 5k), or sign the non-compete. who is going to give a newbie sub penny commissions with no money down??? please. a fantasy prop firm. if you want to trade your own money, then you can find such a deal. i don't know what deal you think you're worth, but be thankful you got offered a no money down deal in this environment. two years? you'll probably be unprofitable for most of your first year, and committed for another year. big deal. they self clear and will give you a competitive rate once you deserve it anyway. i signed a three year conract at 1.5 cents, no money down deal.. the rates are coming down now that i'm profitable, and due to a switch in clearing firms, i'll get sub penny deal. i would rather have been in my situation at the start then some 'prop' deal where you're basically a customer, not a prop trader. some of the other people i started with are down 8-10k. what's going to happen to you when your 5k runs out? maybe if you're generating enough commissions, they'll float you for another couple grand, but maybe not. at a minimum, the initial 5k requirement shows that they certainly aren't willing to risk anything on you.