The reference below is the determination by the exchanges as to if you qualify for non-pro market data. This has nothing to do with the original question. This is the exchange looking to charge more to whomever they can. If the account is not a natural person, you are pro for exchange data. The SEC should have never allowed this.
It depends: Most of my income comes from trading or investing. I guess that makes me a 'professional speculator'. But on a month to month basis it's the dividends from my long only portfolio that pay the bills, with my more volatile trading income a nice (but erratic) bonus. So since I don't live off my trading income, am I a professional trader? Frankly, I find it hard to know when I'm trading and when I'm investing. I use the same general process for both. If I stopped making money in my trading account, would I no longer be a professional? Nothing will have changed about what I know, and what I do. I don't manage money for other people: so not a professional, but I used to. So I know far more about trading than most other non-professionals (This doesn't mean I am more profitable! The ability to calculate the parameter distribution of a Sharpe Ratio, or know that the day count convention in GBP is act/365f are not inherently renumerative. At best, I am less likely to do something stupid). Is an ex-pro still a pro? Except in golf you can't usually compete at a high level once you've retired as a pro-athlete, but I'm not sure that's true of trading as long as you retain any relevant mental faculties. You don't become a worse trader just because you're not being paid to do it anymore. I like to think I have a 'professional approach'. Someone who trades with a similar level of care and attention that I do, but has never been a professional, could also have a 'professional approach'. Does having a professional approach make you a professional? Many brokers ask questions about how many trades you have done, and how long you have traded for, in judging your suitability to trade anything exotic or get a margin account. Does this make you a professional? Finally, if the market-data people are asking, I am definitely not professional. I'd have to pay extortionate pro data fees out of my own pockets, not the deep pockets of client. GAT
Question me this... What about the person who makes his living from trading his personal funds and has not filed for "Trader" status with the IRS? (This is where I'm at now in my market career... and each time I've filed the "pro-nonpro" survey, I've been granted non-pro status.) I always thought you were non-pro unless you traded as a non-personal entity, and/or were compensated in some way for trading for others... or were "in the business" with one or more regulatory licenses. Not sure whether filing for "trader" status with the IRS by itself makes you "pro".
Scataphagos-we have now flipped from what is my opinion of when I would call a trader a pro, vs when they have to pay for pro-market data. This is no longer my opinion, but up the exchanges. NYSE, NASDAQ, and OPRA have a Questionnaire for those that want the non-pro exemption. Assuming this is an individual account, not an entity, you are not registered with the SEC, FINRA or NFA, you are trading your money, I do not see a question that asks if you registered with the IRS for TTS or Market to Market.
In my opinion, the professional trader has the determination, assertiveness, ability to analyze, is a strategist, knows how to manage his emotions and an amateur is not educated, believes that the strategies are not important, is not analytical, has no control over his emotions
- Licenses? No - Time spent trading? No - Trading the money of others? No - Being employed or sponsored as a trader by an institution/hedge fund? No - Employment status? Yes (primarily trading) - Profit or loss threshold? No I worked as a prop trader (no clients/others money, but still in house capital of 200mm) for an institution for >10 years. Now, I would still call myself a pro trader (currently trading independently with my own capital and my licenses will soon expire). When I talk to contacts I’m treated as ‘institutional’ because of my needs, style, knowledge, requirements etc.
Profitability, time spend or making a living trading, are not what separate an amateur from a professional. Amateurs have no formal training, never manage OPM, never work in money management or institution and only trade his/her own money. I considered myself an amateur even though for the past 10 years, I traded full time and derived the bulk of my annual income from trading.
This is my sentiment. Licensed to trade OPM is the line. Not sure if same for our ET Professional sub-forum