What is the advantage of Prop Firms?

Discussion in 'Professional Trading' started by midlifeguy, Sep 29, 2007.

  1. If you already have capital, is there any advantage?

    Just curious. I have never worked for one.
     
  2. BUMP
     
  3. Of course I'm biased since I've been on both sides of the equation but....if you have a couple of $million to engage in working strategies, and have the confidence and support structure to use it, then you're fine on your own. If, on the other hand, you would rather use $25K or so of your own money and use the Firm's money to trade with, and use their support systems, while still keeping 100% of your trading profits (and reap the tax and reporting benefites), then this might be a better choice.

    All the best,

    Don
     
  4. "Of course I'm biased since I've been on both sides of the equation but....if you have a couple of $million to engage in working strategies, and have the confidence and support structure to use it, then you're fine on your own. If, on the other hand, you would rather use $25K or so of your own money and use the Firm's money to trade with, and use their support systems, while still keeping 100% of your trading profits (and reap the tax and reporting benefites), then this might be a better choice. "


    So Don,

    If I put $25,000 into your prop firm and take a $75,000 hit, your firm eats the additional $50,000 loss?
     
  5. Yep, as long as you were within risk parameters. No reason to take that kind of "hit" however.

    Don

     
  6. buylo

    buylo

    I will agree with Don. I started 8 years ago and the margin and resources are invaluable. 3 analysts, IT staff, bigger size, and plenty of people to bounce ideas off of. I really have no intentions of leaving.
     
  7. I wonder if they will ever get a prop firm in north carolina.:D
     
  8. It depends on how you trade and how much capital you have. If you have a big account and trade one or two positions at a time, no need for prop leverage. However you are limited in what you can do. Prop leverage does not mean just sizing up 10x on what you're doing now. It lets you trade additional strategies, lets you spread out more and actually diversify your risk. You don't have to miss trades because your money is tied up. You also don't have to tie up all your capital in a trading account to get all the buying power you need. So it lets you further diversify away from trading.
     
  9. We're "in" every state via Al Gore's wonderful invention of the Internet, LOL.

    Actually our largest remote manager is located in NC, but we all connect every day via our morning calls, mentoring groups, etc.

    Don :)
     
  10. What city is it in?
     
    #10     Oct 22, 2007