What distinguishes proprietary trading firms from other investment entities, and what are the nuanced advantages and risks tied to their business model? Any ideas?
Advantages of Proprietary Trading Firms: Higher Profit Potential: Proprietary traders can leverage their profits, leading to significant gains without hidden fees Autonomy and Flexibility: Traders enjoy independence in executing trades based on personal strategies and market insights Efficient Learning Environment: Prop firms provide resources for rapid skill development, including cutting-edge tools and mentorship programs Diversified Asset Choices: Prop trading firms offer a wide range of tradable assets, empowering traders to capitalize on various markets and mitigate risks through diversification Risks Associated with Proprietary Trading Firms: Auditions and Competition: Traders may face challenges passing auditions and competing for limited opportunities within a highly competitive environment No Guaranteed Income: Unlike traditional employment, prop traders' earnings are solely based on trading performance, leading to financial uncertainty during market volatility Long Learning Curve: Mastering trading skills and achieving consistent profitability can be a lengthy process that demands dedication and continuous adaptation to market conditions Psychological Pressure: Traders experience immense psychological pressure due to financial risks, fear, and greed, necessitating effective emotional management for long-term success
%% MOSTLY Any good commercial deal has some skill in business or even in choosing names. Last time i checked/ choosing names was a>$333 million dollar business. Maybe much more now. 2] I noticed , even this year , some commercials , not taking losses but better + instead of that =extra margin of safety= so not taking a loss to begin with +preventing them. But no such thing as business without expenses[losses] Dont know much about them; but interesting name= Hold Bros= short term trading co Some delays[or slows or holds ]are much better than fast; Hold Bros ran into a good big delay on trade move; SEPT 17,2001, World Trading Tower. Matter of public record.