Breaking the veil from prop trading.

 

I can still understand, why do fzh-shnye scribblers become barkers in the prop office, but I can’t understand how you can go to trade in a prop office.

Still simple, in full view.

We will give you 50 000 of money, but you have to contribute 2000 risk capital.

From the side of the office, everything is risk-neutral: if you sleep 2000, your own money, say goodbye to you.
If you are suddenly lucky, and you will not go broke, and then again and suddenly you will earn, then the office will cut commissions + then on what terms did they give money. Usually there 90% payout, ie. 10% they will take away from the earned.
Interesting conditions, in which the office gives money to successful traders. These conditions are not written anywhere) Write, what “if you trade successfully, then the office will give you more money”. Something tells me, what will the office give, but only on condition, that you are your venture capital in 2000 also increase proportionally. Otherwise, the office simply removes itself from the state “very little risk” in a state “a lot of risk”, which is very stupid, considering the whole business model.

From the trader's side, everything is somehow vague. It hits the super trader environment, superscalpers, the best traders in the world and very expensive cars. Gets a place in a comfortable office. If you're lucky, it will become a media person in the office. These are all pluses.
Of the cons: he can fuck up his 2000 ровно точно также, as well as without an office. But again, fuck up 2000, when you have everything 2000 – это одно.
Fuck up 2000, when you have 50 000 – it's a little different, Considering, what when will it be 48 000, то GAME OVER. Gamblers will understand.

Among a large number of people, caught in the prop office, there will certainly be those, who quickly merged, there will be average, there will be those, who took off. Se la vi.

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What is the most profitable for a prop office? That trader как можно дольше оставался в игре на свои 2000 while generating as much commission as possible.
What is the risk of an office? Риск в том, that the trader will merge more 2000. But for this there is 150 риск менеджеров, which cut risks per deal, for a day, for an hour, etc..

Training and selection in prop offices are not invented by chance. Firstly – weed out inadequate gamblers, who wanted to put on risk limits.
Secondly – teach young traders, how to make the office pleasant: make as many deals as possible (commission) and do it as long as possible.
Here you have scalping and super active intraday and what not.. At risk per trade in 1 dollar can be worn out drain these 2000. А периодические профиты будут способствовать продолжению игры.

Another tactful find. Because. most traders, which never took off, sooner or later will merge their 2000 either to the market, or stupidly on the commission, then the only correct tactic for the office will be the constant search for fresh meat.

Total, what we have in the bottom line from the trader of the prop office:

    • Money for trying to get into the office (Yes, this also happens)
    • Heap of commission + part of the profit, if earns
    • All generated commission, are not over yet 2000
    • Insignificant risk of losses to the office, when risk capital is exceeded

It turns out, that a trader in such an office – это как покупка бесплатного колл option. More precisely, not free, but at the expense of the trader himself.
I see, that to steep trading, stock market sharks and wolves and thrust of millions, such a business has little to do. И все получается не очень красиво по отношению к вновь прибывшим на рынок.

  my_trade @ 2011-02-27T14:04:00

This applies to those domestic prop offices, that i know.
How is it with the bourgeoisie, I do not know, but, judging by the fact, what our idea took there, should also.

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