point taken. ive never considered myself average so hopefully this won't be an exception. getting back to the original post and question: what kind of tax forms do you get at the end of the year in a prop firm? W2's? k-1's? does anyone know the legal status of someone at a prop firm. Are they an employee, are they a customer?
Dude: Most "prop" firms pay you on a K-1, or you trade your own capital as a retail customer, which is just a brokerage account. There is no W-2 involved because it is not a job, but an adventure! Either scenario, you can probably answer the "have you worked" UEI question as no and not go to jail for collecting. Just milk the system for 6 months and try and don't lose too much capital learning to trade! If you are actually worried, trade under a corporate name or your own LLC. Good trading! $URDO
Well, the only thing I can say to this is that the kind of people who pursue trading are the kind of people who ALSO don't consider themselves average
thanks for the reply. ill look into that a little more. I tried calling and explaining to them but the unemployment clerk had no idea what i was talking about... There is a spot where I declare income from self-employment and am payed out the difference. i guess im gonna have to talk to a lawyer about this. the last thing i want is the government sending me a letter telling me that i defrauded them. theyd probably consider it a felony or something.
It seems wrong to use unemployment checks to fund a trading account but as someone pointed out, you aren't an "employee" you are a customer so it seems like it could be a loophole to continue receiving checks but I'd def check with a lawyer first.
@R. Raskolnikov not using them to fund a trading account. I have accumulated savings and want to take a risk with my life... 5-10 years from now ill have a wife and probably a kid or two (god willing) and won't be able to take risks. most of my savings will be tied up in my trading so unemployment would be to offset living costs. Of course if i made positive in any week then i would declare it as income. another good point. let me throw something out there though: did u watch season 2 of wall street warriors? SMB didn't seem too concerned with who they were hiring. i feel that most of these are pay to play kind of firms who will take pretty much anyone with the deposit capital. I have to feel that a significant portion of ppl get into it following the fast money and then drop out when they realize its actual work. That probably contributes dramatically to the failure rate. i know i don't have too much perspective as im not yet trading with a prop but thats what it at least seems like to me.
PROP trading is not employment, you are not going to get caught. You can also defer your "PAYOUT" if you actually make anything trading. Do you really think FINRA calls the Department of Labor and tells them you are a series 7 licensed prop trader? E S
probably not FINRA but the prop firm may declare me as an employee (if thats how the structure works). This would go into the national list that the Dept of Labor has access to. my concern isnt getting caught... if its legal ill do it. if its not legal but i probably wont get caught, i wont do it. thanks by the way for the support... i seem to have struck a chord with ppl on this topic the problem is really who can advise me here. the dept of labor doesnt understand enough about prop firms. a lawyer probably wont either (though one specializing in unemployment may after some research) hence i came to elitetrader forums for some advice.
Its true, if you have $$$ most will "hire" you. But thats why I said that it takes a lot of time to actually make it in this biz. Most everyone gets into trading for the $$$ but then realize its a hell of a lot harder than they thought and requires an incredible commitment. The failure rate is high (I believe) because most don't give themselves the necessary time to actually succeed (whether they quit or blow out their acct). One must experience so much live mkt data that they are able to formulate a strategy that encompasses many major and minor market cycles. Its the nature of the beast unfortunately. When you enter an arena with almost limitless possibilities, you're going to find that the cream of the crop is already there and have been at it for a LONG time. They've had to overcome the learning curve and obstacles along the way to get to where they are at. Just keep in mind that it's most likely going to take longer than 6 months to be CONSISTENT. This is the key word, making money in trading is EASY. But making money consistently is another thing altogether. I've known many "Boomers and Busters". Can make a killing from day to day but also have the ability to give it all back and then some. Consistency, thats when you know you have made it but is a long journey.
if you are not their employee (such as 1099), then you cannot collect unemployment. In addition, unless they fire you or lay you off, you also cannot collect unemployment. And believe me, they will check with your "firm" before you receive even a nickel. Now if you are collecting unemployment from another company, then I do not think propr trading disqualifies you. Unless you are a true, bonafide W-2 employee of the firm.