have a quick question... Lets say you have capital and start a firm that will trade; equities, commodities, bonds, currencies with its own capital (no investors, at least not in the beginning) And you hire 2-4 traders (to start) to trade the capital and then take a % for themselves. what would that type of firm be called?
i call this a prop firm. they are all over chicago. however, what most people on ET call a prop firm I would call a brokerage
in the current context, I would call it "foolish." Few traders are going to walk in the door and make money. And ones who become successful may not work with you, or may leave you. I suspect the more traditional, requiring a $5K+ deposit, and making $$$ in commissions/fees, whatever makes more sense.
Rosy is right. We used to call that a proprietary trading (or prop for short) firm. Now we call them principal trading firms.