Yea, call the SIPC and they will set you straight. The funny thing is that Shark Traders doesn't even have an account at a US BD. They are just a sub-group under a sub-group. If they insist they have an account at either a US BD or US clearing firm, ask them which one and if you can get proof of it. To be completely honest, your funds would be safer at Sure Trader. At least they are regulated by the Bahamas version in the SEC....although I'm not really sure if that is worth anything and just a rubber stamp. Anyway, please report back what the SIPC says.
If you are willing to take the Series 56 then you have many options. Otherwise you are stuck in the murky and shady world of firms like Shark Traders and CY Group that will lie to you.
I'm going to call them right in the morning tomorrow will see how things go ill keep you updated on this thread,Yeah i was on to that next i emailed them asking what brokerage firm they are affiliated with in the US and here is what i said i'll upload his reply on this thread when he replies. ""Hello again, i was browsing the SIPC web site and found what i was looking for and was wondering if you could have any insight on it. I wouldn't have any coverage by the SIPC, if you guys closed next week they would tell me to "go fly a kite" just because your US BROKER is protected by the SIPC and your only an affiliated member with that US BROKER your customers are not protected by the SIPC, here is the link, http://www.sipc.org/for-investors/investor-faqs#international-brokerage-firm with that said i kinda find it irrelevant and sketchy you guys even bother to add the SIPC to your website and the fact that you told me i would be protected by the SIPC if anything were to happen was pretty much rubbish. -You're feed back is greatly appreciated and if you could reply to all of my message and apply proof that my money will be safe and proof that my money is being sent to a US Brokerage firm and protected by the SIPC, and proof that you can have a prop based outside the USA and have customers money transferred and held in a USA brokerage firm and be protected fully by the SIPC. "" i sent two other paragraphs with that one message that's just a bit of it, we will see what SHARK TRADERS has to say this week or if they even reply, they will probable beat around the bush and if that's the case i'll write a full article review on them on this website so if anyone else happens to end up in the same situation as i they can search the ELITETRADER FORUM and know not to even bother with them. and as for sure trader being regulated by the Bahamas version in the SEC, that is the only reason i would join them,and i would just wire my money out every month because there not covered by the SIPC and eventually move to a registered broker yada yada ... I'll keep you updated Thanks again Dylan.
apparently there are some "LEGIT" prop firms out there that will sponsor you for your series 56 i just have to start looking around for those now, i wouldn't mind getting it if i plan to be a proprietary trader, or just not bother to get my series 56 and just join a broker and skip that but this is my job and i'll be doing it for the rest of my life so it probably wouldn't hurt to look into and try to obtain my series 56 http://www.cboe.com/learncenter/series56.aspx, yeah i'm definitely realizing all the BS in most of those prop firms out there. Thanks again SonicTrader i greatly appreciate your feed back, i will definitely keep you updated on this and if i have any other questions i'll shoot you a PM if you don't mind Dylan.
You received a few responses after I went to sleep, but I still want to respond. There are endless combinations that you can ask about. Just focus on this: -All registered broker dealers with the SEC must be members of SIPC. That just means they pay dues. Victor Securities pays dues, but we hold no customer funds. Our clients are protected by the SIPC of the clearing firms. Each master account by SS# or EIN #. -All Prop firms that are registered broker dealers with the SEC, must be members of SIPC, same as above. That just means they pay dues. The broker dealer is offered no protection, only their customers. If you are a member of the prop firm, you are NOT their customer. You are a member of the firm and get no protection. Let me say that again because many traders new to prop firms don't get that. When you join a prop firm that takes your money as first loss, you are NOT their customer. You are a partner in the firm with the rights as set forth in the agreement you sign. -If you join an unregistered prop firm that takes your funds in as a member, the entity has a customer account. That customer account would be protected once if the money is at a SIPC protected firm, but not by sub-accounts. So in reality, there is no protection provided to you. I would be more concerned with the people you are getting into business with than SIPC protection, if this is a small deposit. If it's a big one, just open your own account and avoid the prop firms. Bob
I was thinking about joining Shark Traders when I came across this thread. After that I decided to ask them about safety of funds. I completely understand what is takes to work with a registered firm (licenses, big deposits etc.), which a small trader from Spain cannot afford, so the idea of asking them this question was to see if they are going to tell the truth. And they explained me exactly the same things like RMORSE wrote above. So the guys look honest about how it works
What did they tell you? Did they tell you that your funds are protected in any way? If they did they lied. Did they tell you that they don't even have an account at a brokerage firm anyway!! They are just a subgroup. Nothing wrong with that but don't be fooled that you are working with a group that has any control over your money. They don't.
They said that their funds are protected, because brokers they are working through are members of SIPC. What about our relations (me-traders, them-firm), they are regulated by agreement we sign. So they are clear about it
i think one person here said it the best. most professional traders do not want protection. it jsut means higher fees, etc.