What is a draw?

Discussion in 'Prop Firms' started by vini88, Jan 5, 2010.

  1. vini88


    Hi guys,

    When you talk about "prop firms that pay a salary/draw," what exactly do you mean?

    What is a draw? In simple English---no jargons, please. Any difference between a salary and a draw?

  2. a draw is just that a draw against your future earnings. The firm would pay you like $2,000 per month against future earnings, this is an interest free loan from the company. This is very common is sales/commission jobs where it may take 3-6 months to get your first real paycheck. Remember this is money given to you against your earnings, you will really be in a hole if you start losing money.

  3. vini88


    Thank you for the reply. So if I don't make any money, say, for 3 months, and then I quit, would I owe them $6,000?

    That's how it works?

  4. Yep that's how a lot of "commision" jobs work. The idea is that the company is investing in you, this idea kind of scares me especially if you are a new trader. If you are going to do prop, I would just trade the mornings then go do something else. Good trading.
  5. soesito


    You are outright wrong, at least with trading companies. In no case I have ever heard of are new traders responsible for draws. Draw is simply an advance against future earnings, and if you simply quit or are fired, you owe back nothing.

    I'm not sure about other industries. If you owe money back even if you do not succeed, that would be called a loan, not a draw.
  6. ok