Quasar has a unique corporate culture. They welcome incoming money with an incoming wiring fee. If anyone ever wants to leave the firm having trouble withdrawing. They owe hundreds of thousands to traders who left. They will not pay ever unless legal action is taken against them Specializing in scamming traders. Last ditch effort for a desperate management to generate income since the business model is failing.
After making some phone calls ...there are serious balance sheet problems at the above mentioned firms ..obviously they are denying and attracting more deposits to be converted into comissions or witheld for good ...SIPC insured retail accounts the way to go
^^ I would agree with the poster above...but with retail accounts your leverage is so constricted that its really difficult to make great returns. You are left with few choices. does anyone know how IB/Lightspeed's instituional branch works? also there is remote day trader, they seem to have been around for a long time
A trader does due diligence before entering a trade i.e. set-up + trigger then why can't they do it before joining a firm? There are reputable firms out there with strong balance sheet and good management!
There are many choices in this business. I'll mention one or two, and there are many many more. If you aren't willing to trade 1:1 and show you limit risk and make money, what is 10:1 going to do for you, or 25:1? Most traders seeking huge leverage with small capital are new and thus losing traders. And if we could short new trader performance, it would be very hard to find stock to borrow. It's not a knock on new traders, just about 100% of new traders lose money, because trading is a skill and skills take time to develop. Most, not all. If you just showed a positive return over a period of months, many firms would very much entertain the idea of backing you, or at least offering you leverage for your current account size. Most firms do not train profitable traders, and this is where they fail. They prefer to take already profitable traders , classic catch 22. There is nothing wrong with a good retail account if the fees are right. 4:1 leverage is plenty. I made tremendous amounts of money with 150K to 500K in buying power and that can easily be had at a retail account that probably also charges 20 or 30 cents per hundred shares. Did I mention your capital is somewhat insured, and you can have access to all of it in just a few days? Arcades do not offer that. So look at what you are really risking when you go with an arcade firm. It's quite a bit for leverage you may not even need and in the beginning its most likely detrimental to your cash. Arcades leverage comes with a lot of risk, to your account but more importantly risk that isn't even your own like firm risk, capital lockups, and other things. I would trade small, anywhere decent and tolerable, have a good return, then go get backed by a firm, if I knew 17 years ago what I know now and wanted to do it on my own. Everyone has to go their own way to become successful, but my point is there are many many choices. I too thought arcades were the only way, then I got employed in merger arb, then when that market died I got hired at a prop firm. Now i can do retail or arcade it doesn't really matter, prop might be out of the question cause I am no longer an employee type, the prop firms tend to want you to be like an employee, but I like control of my capital down to the very penny. I don't think a firm deserves control of your capital, in an indirect sense, when they control your capital they control a part of you and that limits your choices. For me, the leverage is not worth the trade off anymore. After years in this business I believe knowing where your money is and having access to it, with no questions asked or implied, is the most important thing. I realize this is not the path for everyone. Just my two cents....
Excellent analysis. Since arcades provide no SPIC insurance in case the firm fails - which is inevitable - the remaining capital goes to the managing members. Once deposits and accumulated trader profits reach a certain level it will be taken off the table. The head trader ( with close association to managing members) receives a very large capital allocation for a huge trade or trades and at the same time a distant cousin takes on an opposing position on the other side of town. It is always a wash until the cousin doubles his millions and the headtrader's looses eaten by the arcade members once the desirable gain is achieved.
Thanks. There is a lot going on behind the scenes at arcade firms and that's probably the main reason why they are not transparent. The cornerstone is control of your own capital, then next most important thing is firm risk, then your own risk management, then fees. The reasons why you have to take firm risk seriously is that it will affect your trading. If you understand that tomorrow your funds can be completely unavailable due to no fault of your own, even if you are one of the best personal risk manager with your own funds, and that if those funds are not available to you you have no recourse because that's what you gave up when you signed your agreement, how can that provide a stable base for your trading operations? My take is that it cannot. Every element in your trading plan needs to be stable. The uncertainty you have to learn to live with needs to be solely in the risk you take when you put on a trade, based on your own choices, and in really not knowing where it will go from there. That takes enough energy to manage all by itself. I am not saying you cannot manage the idea of firm risk in your trading plan, its just why bother with that when you probably don't need to. If you have to make a deposit with an arcade, I would negotiate for the least deposit possible to achieve the situation necessary for your trading, then set that as your water mark and remove capital frequently with withdrawals. If the firm blows up or denies you access to your funds when you ask for them, then at least it was a small drop in the bucket for you (look at it like a big losing trade) and use the remaining capital that you didn't deposit with them to start again lesson learned.
That's a brilliant potential scenario. Any arcade firm can absolutely do this because class a members have absolute discretion as to what to do with the firm's funds. Wow....almost makes me want to start an arcade. Have you ever thought about writing novels? This could be a sequel to boiler room. You know, when you go in and talk to an arcade firm, in person or on the phone, one of the things you should ask is to speak directly with some of their traders. See what their response is. I've done this. I got this response from 2 firms, one I actually traded with. "We don't do that." Excuse me? You don't do what...let potential members talk to some of your (and the firm can select them) trader's as part of my due diligence? One firm even had the audacity to tell me this was against their exchanges policy. This is unbelievable but it happens. To date, except for Lieber and Weissman back when I first started, no major arcade firm has allowed me in my due diligence process access to any other trader in the firm for simple questions. This is the firm's manager doing the blocking on this one. From those first few discussions with those other traders at LWS, over the past 17 years I developed my whole career. Not that this is important, I'm just sayin'........ Good traders, people who are seriously good at something, generally (not always) enjoy talking with people, especially those with an potential interest in their business. When I was interviewing for my prop jobs this was the RULE, not the exception. The prop firm I eventually worked for bend over backwards, it seemed, to have me meet with (I'll assume) their happiest and most profitable traders. Arcades, well, lets just say their policy on this seems to be keep your mouth shut. For whatever reasons, they don't seem to like to let their traders talk to potential new members. The general rule in life seems to be showing itself as...when it's legit...you can ask reasonable questions and get straightforward answers, generally promptly. I started writing these posts hoping not to criticize arcade firms directly. However, the more I think back to my experiences, both in interview processes, diligence, and trading experience, the more I am remembering how "off" most things seemed to be compared to when your gut feeling is that things are simple and straighforward.
The scenario I mentioned happened 3 times to firms I was associated with in the past 15 years. Fortunately did not leave much $ behind.. Obviously I trade retail account and will only consider joining a no deposit prop in the future ⦠but would be hesitant since risk/backoffice way too interested in monitoring and mimicking consistently performing traders ( this has only happened to me once but was settled in court â was able to find evidence â rare ) . It is an option opening and arcade since many unemployed college grads but requires thick skin. Firms who failed while I was a member always maintained the appearance of having strong financial background/ reliability and differentiated themselves from the rest up until the day. Then after the incident managing members have to deal with disgruntled trades and live with themselves . Some might not take it lightly leaving $20 k or more behind⦠.. I rather would like to see and episode of American Greed on CNBC dedicated to this topicâ¦