Prop Shops in Australia

[kid hustlr]

So I presume no bonuses for either of you.
So a salary plus a share of profit?

I guess what Im getting at is that if you are trading for a share of profit only (and that makes sense) and
trading approx 100 x the size you'd trade on your own account then you'd need more than 1% to be better off.
As an example.

Is that the way it works.

yep

Think TH wrote a piece one time about the benefits of being in a shop, there's arguments either way but for most I would think a shop makes sense.

 

[Trembling Hand]

So I presume no bonuses for either of you.
So a salary plus a share of profit?

I guess what Im getting at is that if you are trading for a share of profit only (and that makes sense) and
trading approx 100 x the size you'd trade on your own account then you'd need more than 1% to be better off.
As an example.

Is that the way it works.

Salary? what is that?

 

[tech/a]

Salary? what is that?

Some do run salaries.
Plus bonuses --why I asked.
Obviously performance based only.

So to the second part of my query?

If that is the way it works.
How much better than trading your own.

Is the "Average" prop trader earning $100k-$300k
A very good one --more---particularly over $500K

And finally how poor do you have to be before you haven't got a job?

 

[Trembling Hand]

And finally how poor do you have to be before you haven't got a job?

Lose money = out the door.

I've never seen a prop shop pay a salary or a bonus structure its always a % split of profits after cost.

Its 1000000 times better than trading your own capital. Its RISK free!!

 

[tech/a]

Lose money = out the door.

I've never seen a prop shop pay a salary or a bonus structure its always a % split of profits after cost.

Its 1000000 times better than trading your own capital. Its RISK free!!

Its not entirely Risk free.

Lose money = out the door.

 

[Trembling Hand]

Tech as to your answer about how much an average trader makes trading prop? F knows. The most I have seen on the risk screen for one days profit was $120,000. The largest loss I think I've seen is $50,000. But I really have no idea. I'm not in the office so my guess is only slightly better than imagination. :

As to how much I made last month? here is the bottom line from my statement.
...................................Contracts traded........... P & L


LOL hey..... ya win some ya lose some

 

[tech/a]

Tech as to your answer about how much an average trader makes trading prop? F knows. The most I have seen on the risk screen for one days profit was $120,000. The largest loss I think I've seen is $50,000. But I really have no idea. I'm not in the office so my guess is only slightly better than imagination. :

As to how much I made last month? here is the bottom line from my statement.
...................................Contracts traded........... P & L
View attachment 53636

LOL hey..... ya win some ya lose some

Yes understand
But Im interested in what sort of cut a trader who made $120K in a day would get for himself.
I presume it would be a monthly total.

Or is it a running accumulative.

EG say 120K profit for the month 10% = $12000
next Month loss of say $5000 is that just a cost of business for the prop guys?
Would that get you out the door if it happened for 3 mths--say?

Oh and what happenned last month
The front of it looked unstoppable.

https://www.aussiestockforums.com/forums/showthread.php?t=24462&page=120

#2394

 

[kid hustlr]

Tech each month you have costs, you minus all these costs (brokerage/desk/software, whatever) from your profit to give you your after cost result. then you split the rest as per your agreement.

The reason TH is vague is because every shop is slightly different and every individual agreement with the shop probably varies slightly also (limits/split % etc)

if you are stuck one month then that rolls over to the next month, if you were stuck 6 months in a row they probably chop you but once again it depends - its a business decision for both parties and the relationship involved will once again vary.

I feel like you are suggesting 'if these guys re so good why don't they do it for themselves'. I think the more successful you are as a trader, the more capital you have and the more experience you have then the more reason to go it alone but once again, every relationship between the shop and trader will vary and it depends on the individual.

Also as TH said, theres no risk. if you blow you're account you just cant pay the mortgage - you don't lose the house. (bad analogy but you get my drift).

- - - Updated - - -

Or is it a running accumulative.


#2394

yes its accumulative

 

[Trembling Hand]

But Im interested in what sort of cut a trader who made $120K in a day would get for himself.
I presume it would be a monthly total.

Or is it a running accumulative.

EG say 120K profit for the month 10% = $12000
next Month loss of say $5000 is that just a cost of business for the prop guys?
Would that get you out the door if it happened for 3 mths--say?

10% LOL Tech you have massively underestimated this game. That is why its just unfathomable that if you can trade you wouldn't give it a go.

Trainees start on 50% split. What do ya reckon they would give to a trader that can take 200 - 300g per month? :

Its a running total. You go into draw down you have to work out. That being said I, just like skc, are always surprised at the level of support. A trader who can trade will be carried for some time. A lot longer than a 3 month rough patch.

Oh and what happenned last month
The front of it looked unstoppable.

https://www.aussiestockforums.com/forums/showthread.php?t=24462&page=120

#2394

Not much. More size. It becomes a different game at a certain level. Aint no stops at times.....

 

[tech/a]

Tech each month you have costs, you minus all these costs (brokerage/desk/software, whatever) from your profit to give you your after cost result. then you split the rest as per your agreement.

The reason TH is vague is because every shop is slightly different and every individual agreement with the shop probably varies slightly also (limits/split % etc)

if you are stuck one month then that rolls over to the next month, if you were stuck 6 months in a row they probably chop you but once again it depends - its a business decision for both parties and the relationship involved will once again vary.

I feel like you are suggesting 'if these guys re so good why don't they do it for themselves'. I think the more successful you are as a trader, the more capital you have and the more experience you have then the more reason to go it alone but once again, every relationship between the shop and trader will vary and it depends on the individual.

Also as TH said, theres no risk. if you blow you're account you just cant pay the mortgage - you don't lose the house. (bad analogy but you get my drift).

- - - Updated - - -



yes its accumulative

Thanks Kid

Yes I do understand the reasoning.

I've heard of very successful Traders who suffer $1 million swings in their accounts
and when 2008 hit know that there were a spate of necking's and many lost the lot
lifestyle and everything else.

So If you blow up you have at least the ability to do it once risk free.
Doubt you'd get another job though if the blow up was big enough!

Personally I've always been of the "Slow and steady wins the race"--ilk.
Also of the "How many Millions do you want"--group.

For nearly 20 yrs I complained " If I'm being taxed this much and have made this much" where the hell is it!
Now when i walk around the depot I can SEE where it is!
While friends flashed 1000s around like confetti. Pretty well all of them have confetti and are to old to do anything about it!

Don't get me wrong I'm certainly not against Prop trading or think that those capable of trading it shouldn't.
I'm interested in the discussion.
Interested in the thinking.

That is why its just unfathomable that if you can trade you wouldn't give it a go.

My answer is in your Inbox

 

[CanOz]

I'm thinking you'd make a good Prop Shop owner Tech. You've obviously got the money to invest. To me, running a prop shop would be a little like trading, cut your losing traders short, let your winners run. This was the impression i got from the book "One Good Trade" as well.

I reckon you'd need a few hundred k to get setup, then several million in risk capital?

 

[pavilion103]

One of my mates who who was at one of the firms previously has told me that I should go and do it. Unfortunately he didn't make it and to be honest his personality is not at all suited to trading (patience, objectivity, concentration, mathematical probability thinking etc).

I'm currently in a steady, fairly comfortable job which I like but doesn't excite me like trading. The thought has run through my mind to go up to the Gold Coast or Sydney or wherever really. I wonder if I'm missing the opportunity to make a lot of money in something that I'm passionate about and am very well suited to!

 

[CanOz]

One of my mates who who was at one of the firms previously has told me that I should go and do it. Unfortunately he didn't make it and to be honest his personality is not at all suited to trading (patience, objectivity, concentration, mathematical probability thinking etc).

I'm currently in a steady, fairly comfortable job which I like but doesn't excite me like trading. The thought has run through my mind to go up to the Gold Coast or Sydney or wherever really. I wonder if I'm missing the opportunity to make a lot of money in something that I'm passionate about and am very well suited to!

Find something you love to do and you'll never work another day in your life Pav.

I envy you, I'd be in like Flynn.

 

[skc]

Its not entirely Risk free.

Lose money = out the door.

There is no risk on your personal capital. Of course there are other risks like getting hit by a car while you go to the office instead of trading from home...

If that is the way it works.
How much better than trading your own.

Is the "Average" prop trader earning $100k-$300k
A very good one --more---particularly over $500K

I have no idea the average but >$500k wouldn't be a stretch at all. In my case, based on my current size, I am ~3.5-4x better off than trading on my own. Plus I can deploy my personal capital into things like fundamental buy and hold strategies

And finally how poor do you have to be before you haven't got a job?

I don't know and I hope I never find out.

Tech as to your answer about how much an average trader makes trading prop? F knows. The most I have seen on the risk screen for one days profit was $120,000.

That is a sweet number.

As to how much I made last month? here is the bottom line from my statement.
...................................Contracts traded........... P & L
View attachment 53636

That is not a sweet number

 

[boofis]

I wonder if I'm missing the opportunity to make a lot of money in something that I'm passionate about and am very well suited to!

How well suited to trading did you think you were before the duck started spoon feeding?

 

[tech/a]

One of my mates who who was at one of the firms previously has told me that I should go and do it. Unfortunately he didn't make it and to be honest his personality is not at all suited to trading (patience, objectivity, concentration, mathematical probability thinking etc).

I'm currently in a steady, fairly comfortable job which I like but doesn't excite me like trading. The thought has run through my mind to go up to the Gold Coast or Sydney or wherever really. I wonder if I'm missing the opportunity to make a lot of money in something that I'm passionate about and am very well suited to!

Plenty of time
The markets not going anywhere.
Build a foundation.
then do as you wish.

Ah the exuberance of youth!

 

[kid hustlr]

Thanks Kid

Yes I do understand the reasoning.

I've heard of very successful Traders who suffer $1 million swings in their accounts
and when 2008 hit know that there were a spate of necking's and many lost the lot
lifestyle and everything else.

So If you blow up you have at least the ability to do it once risk free.
Doubt you'd get another job though if the blow up was big enough!

Personally I've always been of the "Slow and steady wins the race"--ilk.
Also of the "How many Millions do you want"--group.

For nearly 20 yrs I complained " If I'm being taxed this much and have made this much" where the hell is it!
Now when i walk around the depot I can SEE where it is!
While friends flashed 1000s around like confetti. Pretty well all of them have confetti and are to old to do anything about it!

Don't get me wrong I'm certainly not against Prop trading or think that those capable of trading it shouldn't.
I'm interested in the discussion.
Interested in the thinking.

That is why its just unfathomable that if you can trade you wouldn't give it a go.

My answer is in your Inbox

As CanOz said you should run a shop.

Completely agree with your thoughts on lifestyle and the bolded part.

Pretty sure the 100 basis point cut bankrupted one shop. there one day, gone the next!

 

[pavilion103]

How well suited to trading did you think you were before the duck started spoon feeding?

Probably pretty good considering I was won multiple online poker tournaments with literally 2,000 participants.

So yeh, I'd say fairly well suited, wouldn't you?

 

[pavilion103]

Plenty of time
The markets not going anywhere.
Build a foundation.
then do as you wish.

Ah the exuberance of youth!

Yeh I know Tech. You know I'm a patient guy but I guess my thoughts are why not consider doing it if it is likely to achieve multiples of my current salary!!

I'm not seriously considering it but that thought is in the back if my mind.

 

[skc]

Trainees start on 50% split. What do ya reckon they would give to a trader that can take 200 - 300g per month? :

I think Radge once said on this thread he knew people of 80% split. That's quite amazing to me...

I reckon you'd need a few hundred k to get setup, then several million in risk capital?

It's a numbers game. You need a critical mass of traders so the shop's equity curve is smooth. I'd say 15-20 minimum trading various uncorrelated markets and strategies. Then you got to make sure they have room to grow their size and limit as they progresses. The fixed costs are probably quite high as well, you need managers, floor space, IT support, big fat pipe, risk managers, risk systems etc. Then you need to set up the right broker relationships so you get low commission. So I'd say $25m would probably be a bare minimum.

One of my mates who who was at one of the firms previously has told me that I should go and do it. Unfortunately he didn't make it and to be honest his personality is not at all suited to trading (patience, objectivity, concentration, mathematical probability thinking etc).

Why do you say that? These are awesome qualities for certain quantitative trading strategies.

I'm currently in a steady, fairly comfortable job which I like but doesn't excite me like trading. The thought has run through my mind to go up to the Gold Coast or Sydney or wherever really. I wonder if I'm missing the opportunity to make a lot of money in something that I'm passionate about and am very well suited to!

Pav, your equity momentum stuff is unlikely to be attractive to Propex. They looks for something that's more active, all terrain and shorter timeframe. Your futures probably look more suitable but I am not an authority on that front. But what's the worst that can happen, you waste 2 hours putting together a CV?