what actually goes into starting a trading desk/office? pros and cons?

Discussion in 'Prop Firms' started by NYC212, Apr 3, 2009.

  1. NYC212


    Let me explain, assume I trade for XYZ and decide to get an office going, what are the pros and cons?

    lower commissions ?
    collect a % of the traders profit?
    collect a % of the traders commissions?
    some just like to be a manager?

    have to be able to teach/train?
    hassle of being a manager (dealing with traders, setting up rent, computers)
    would one need to get a series 24 or principle lic?
    wonder what type of liability they assume?
    finding traders? (they charge for job adds in NYC for craigslist, I just realized)

    Im just wondering why successful traders who trade with a firm open a trading desk/office?

    anyone care to explain?

    thanks (hope my post made sense)
  2. karth


    Shouldnt you want some form of capital to provide leverage for all the traders you plan to recruit ?
  3. Kull



    how naive of you
  4. NYC212


    say you trade at assent

    just going to say assent or echo or bright or one of the others)

    assume one trades at assent and wants to open an office, you still do all your complaince and paper work through asset and all your traders are assent traders. so you are a successful trader what are the pros of renting office space, having traders work under you?

  5. NYC212


    I myself couldnt "hire" new traders and not train them, I would feel guilty if I went out and hired someone but didnt train them etc. but being hired by a prop shop is a catch22.
  6. Kull


    you need to get your act together

    you don't seem to understand how trading is done

    NOR do you understand prop business

    you think Don Bright hands out edge every day to new traders

    well at least he would like you to believe that :cool:
  7. NYC212


    Im sorry, I couldnt put an add out and just rip commissions of poor suckers and offer them a job.

    but Im pretty sure Bright has "training aval" for a cost, instead of

    "hey kid sit over there, install this software on your computer and trade."

    again just asking the question, why start a desk? what are the pros and cons? Im not staying create your firm, but be a sub LLC of a Bright office for an example (like he has in different cities)
  8. Couple of pros:

    If you were a regular individual trader, you are/were a "small fish" with regards to clearing firms/software developers. Once you get a trading team together you can start throwing out nice volume numbers and attract these firms, giving you better deals on data feeds and platforms, etc.

    Another thing is, say you don't enjoy working from your home. You'd rather rent an office, get business class phone lines and dedicated lines to your platform dealer. Bringing in traders can help cover your new expenses (rent, internet connection, etc.) I'd much rather trade from an professional office environment, personally, than my home.
  9. (To answer the initial question).

    Our groups (desks as you call them) are able to both derive a secondary revenue stream and to offer "value added" to the traders in their sub-group. One example is our group in British Coumbia, PairCo. They started with 2 guys in a garage, and now have split off into two groups one of about 25, the other about 70 or so. One group is completely independent, pay their own overhead costs, and are able to negotiate group pricing etc. The other is still corporate, but has a well designed heirarchy to add value to traders, both new and experienced. The bottom line to the trader is enhanced with both these groups.

    Another example is our affiliate program, where successful traders are given what basically amounts to a "free franchise" opportunity. Again, they cover the local expenses, but can work with traders, perhaps back some, work out solid "win-win" relationships under our umbrella. Boston and Austin are good examples of this type of arrangement.

    Traders are much more comfortable with these arrangements as opposed to "sub-llc's" or other plans that may be out there. Each trader is a full member of Bright Trading for their safety and security, etc. While at the same time, each group can spend a lot of one-on-one time together, both in office and remote. We are big fans of these "value added" relationships.

    Rather than have those successful traders who seek other entrepreneurial ventures go off and start a desk from scratch, with all the additional overhead involved, we have these opportunities in-house.

    These arrangements work for in-office and remote trading groups, of course.

    All the best,

  10. NYC212


    thanks. coming from the world of regulation, do your managers need principle license since they oversee traders ? (series 24)
    #10     Apr 7, 2009