Discussion in 'Prop Firms' started by Risepoint1879, Jan 28, 2019.
As a member of the t3 group, they use your capital + their capital + other member's capital to provide leverage. This is way all 1st loss JBO prop firms work.
So the buying power is supplemented, but never the equity balance, correct? It will be what I came in with, and whatever I earned.
As a member, you get an account to trade in, but it is not your account. You are trading firm capital with your money as first loss. This is an important regulatory distinction. I want to make it clear I'm not bashing T3 or any other non-traditional prop firm. I'm just trying to provide details. Your money is locked up for 1 year, you need to pass the series 57 and be regulated by their broker dealer. Your money is not covered by SIPC and your cash is subject to the losses of the entire firm. Your end of year pay is in the from of a K1 from just your deal.
In case you want to learn more. http://www.finra.org/sites/default/files/NoticeDocument/p004001.pdf
Go to page 2. Joint Back Office Arrangements.
I know it is difficult to determine, but what type of payout is offered there as far a % of profit?
If you were to take a wild guess?
Hold futures overnight(traditional liquid issues), staying well below traditional margin requirements of a standard margin account (Non PM margin) account...risking 1% per trade or so.
Putting 1/5th of the account size funded by trader.
My guess would be 80% but I could be dreaming.
I'm going to say one more thing about joining a prop firm. Your pay out, your fees, your commissions, your leverage etc, is not everything. Examine the deal they offer, but focus on the people you will have to work with. Make sure you trust trust them. Make sure they are people you want to partner with. The lock up is 1 year. That is 1 year you will be registered with them and have your money locked up. That is a long time.
That's part of what turns me off.
They told me traders keep 95% of profit. Marked up commissions and data fees, so they get their money either way. It's probably a bad trap for new traders. People come in and blow their deposit using 10x leverage.
What are the commissions 2x IB roughly? What if you don't need data, or very very basic data?
Doesn't sound too bad if you are not trading with big leverage.
I’d recommend just saving up and investing with a retail broker to get portfolio margin once you pass 100k balance.
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