Proprietary Trading Firms 2015

Prop FirmMinimum
Deposit
Required
License
300k
Shares
Profit
Split
Cy Group Prop Trading Firm5000None.003100
Shark Traders Prop Trading Firm1000None.00385/15
Nonko Trading Prop Stock Trading2500None.0035100
Avatar Securities Prop Firm1000056 or 7.003590/10
Great Point Capital Prop Firm1000055 or 7.00390/10
Integra Capital Prop Firm500056 or 7.00399
T3 Trading Trading Prop Trading500056.003590/10
Equity Trading Capital Prop Trading Firm500056.00495/5
Remote Day Trader Prop Trading Firm500056.004100

Proprietary Trading Firms – What You Need To Know

Thanks for taking the time to read this post regarding proprietary trading firms. Some of this information made seem redundant, simplistic, or opinionated. In fact, this post will probably be too long for most readers, but just enough information for those that are new to proprietary stock trading firms. Before I jump into this, I think that it is important to note that I have been trading since 1996 and have witnessed a lot of changes within the stock trading industry. I was around during the late 1990’s when day trading stocks burst upon the scene, and leverage inflated the Nasdaq into a bubble, which of course blew up in 2000. A lot traders, and day trading firms got the blame for the Nasdaq bubble, and these criticisms are not without merit. After the bubble burst, the Securities and Exchange Commission enacted Rule 2520, the “Pattern Day Trading Rule”, which created a series of limitations that prevented small investors from opening a small account and then highly leveraging the account (sometimes up to 40X) in order purchase massive quantities and stocks during the trading day. The brokerages loved it because stocks where only going higher, and the brokerages earned commissions and  margin interest on these massive stock orders. It was all fun, until is wasn’t. Margin destroyed many firms and day traders alike.

Rule 2520, The Pattern Day Trading Rule

The Pattern Day Trading Rule is simple. If you execute four or more day trades within 5 consecutive days, then you are considered a Pattern Day Trader. Therefore, if considered a pattern day trader, then you must maintain a minimum balance of at least $25,000 in your account, at the end of each trading day. The rule is clear. And all US based brokerages, if they want to remain in business, do not break the rule.

However, with any rule that attempts at financial regulation, the trading community of brokerages, prime dealers, margin lenders, traders etc. will always attempt to creatively implement fringe solutions to avoid regulations. Over the years I have seen every imaginable scheme where everyone with a profit motive attempts to chip away at Rule 2520. Eventually, the SEC always wins. It is never a matter of if, it is only a matter or when. So lets jump into the current state of prop trading for 2015, survey the landscape, and hopefully supply you with useful information.

Proprietary Trading – Types Of Firms

At its most basic description, a Proprietary Trading firm is a just a partnership of investors. People get together, pool their money, and trade from a single account. Many prop trading firms are private. Meaning that they do not actively seek outside traders, these types of firms typically receive money from hedge funds and they attempt to trade only for profit. Most of these firms are managed by experienced market operators, and are only looking to add computer scientists, PhD’s, and will recruit new staff through colleges and professional staffing agencies. For the sake of people reading this, I will not present a list of these firms simply because the majority of us would never get our resume glanced over.

The next type of prop trading firm are United States based prop trading firms that act like a traditional stock brokerage. In other words, a person would open an account and make a deposit, the person would then be able to trade at typically 20X of the initial deposit. So, if you deposit $10k, then you now have a purchasing power of $200k to day trade stocks. Most importantly, you can avoid Rule 2520, and do not need to maintain a balance of $25k. In addition, the leverage is much higher than a traditional United States based broker that typically will only allow 2X margin. If you plan on day trading stocks, and do not have $50k in your account, you will need margin. Unless of course, you only want to win or lose very little. The bottom line is that you need spending power and this is the sole function and purpose of these types of prop trading firms. However, all United States based brokerages that operate as a prop trading firm require that traders have a minimum series 56, 55, or 7 securities license. With this post, I will not get into the specifics of obtaining one of these licenses. Another post on this site will give exact details on how to obtain your license. Do not let the license be a deterrent, a series 56 is quite easy to pass.

There are also non United States based prop trading firms. These firms typically will service anyone not located in the United States. Suppose you live in Brazil, are you really going to fly to the United States to attend a Finra approved testing facility, with the sole purpose of taking the series 56? This would not be feasible. Another sector of the population that opts for an offshore prop trading firm would be anyone with a prior felony conviction. Finra and the regulators are like the Department of Motor Vehicles, sure they serve a purpose, but they also exclude many with fringe convictions. In my opinion, the system is unfair to many that might of made of a mistake many years earlier in their life. Or perhaps a person has issues with the IRS, or a state government and owes back taxes, etc. Or maybe they have a judgement from a lawsuit, or an ex spouse looking for money. I have heard every imaginable reason.

Is your money safe at a prop trading firm? Prop trading firms do not have any sort of governmental guarantee. Whether they are US based or offshore, neither can guarantee the return of your trading capital. And this is the basic flaw with prop trading firms, they sometimes go bust. In fact, in 2008, many United States prop trading firms and offshore firms did in fact go bankrupt. Many traders lost their deposit and any winnings. And in all honesty, do not expect much relief from the SEC, they tend to turn a blind eye towards prop firms that fail. However, they keep a keen eye to make sure everyone is paying their fee’s. With this being said, it is important to note that a United States based prop trading firm will be under the criminal jurisdiction of the Federal Bureau of Investigations. So if your prop firm is located in New York, and your money disappears, then you can at least file a complaint.

If a prop firm is located offshore, and your money disappears, then you must rely upon the local authorities for relief. This is something that you need to consider, especially if your prop firm is located in the Bahamas, Israel, etc. The most common reason why an offshore prop firm goes bust is because the owners are also trading, will suffer losses and then begin trading with your money, only to lose that money. The next thing you know, you cannot log into your account and the website disappears. Think this does not happen? Well you better think again. Because it happens quite often. So you need to be careful.

Prop Trading Firms To Avoid

We have now talked about three types of prop trading firms. The first type would be private firms that typically only hire PHD’s. The second type are United States based prop trading firms that function like a traditional stock broker, pool trader funds into a common account, usually offer 20X margin, require a minimum series 56 securities license, and comply with all United States securities regulations. The third type of prop trading firms are offshore firms that cater to non United States based traders, or United States based traders that cannot qualify for a securities license, or want to shield themselves from the IRS or lawsuits, and are nearly immune from United States criminal laws.

The fourth, and final types of prop trading firms need to be avoided. Why? These are prop trading firms that are actually just educational firms that are masquerading as prop trading firms. On the surface, they act just like a prop trading firm, but before you can open an account and begin to trade, you must take a course or pass a series of tests that you must pay for. The typical costs range from $2k to upwards of $30k. There are too many of these firms to name, but I will give you a couple of examples. The first would be ifundtraders.com, a firm founded by Oliver Velez, a long time con man that openly describes himself as the “Messiah Of Day Trading”. The scam works by selling the dream of becoming a full time trader, you must purchase a comprehensive day trading course for $9,000. Once you complete the course, the messiah then may give you a small portion of your $9,000 to trade within the ifundtraders.com prop account. It is a hustle of the highest order. The sole purpose is to drain you dry of every morsel of your money, and then entice you into maxing out your credit cards for yet more training.

I wont get into every single one of these shady hustlers looking to “hire” professional prop traders. I have a list of nearly 60. Some of the more noted scams are Apiary Fund which charges several hundred dollars each and every month to access a worthless series of videos and trade from a simulator until you finally discover that a prop trading job cannot ever be obtained. Or Maverick Trading which requires $5k to be “hired”, a complete scam. Or SMB trading, which suckers in college age kids from campuses and sells them on the dream of becoming a prop trader and making their parents proud, only to market a several thousand dollar trading course that is tailor made to sell to naive parents. Most of these kids have no idea what they are getting into and drop out within a few weeks. Once again, avoid any prop trading firms that have a “pay to play” policy.

Which Prop Trading Firm Should You Choose?

I will make this short and sweet. If possible, your first choice should be a United Stated based prop firm. Firms that comply with United States securities laws are making a considerable investment to remain in compliance. They usually have a brand to protect. And since they operate within the jurisdiction of the United States, then they are less likely steal your money because they understand that FBI and the SEC is only a phone call away.

Your next choice should be a well vetted offshore prop trading firm. Avoid any firm that does not answer their phone calls on the first attempt. Many of these offshore prop firms are just a one or two person operation that is operating under a sub account of another offshore firm. If a one or two person firm located on an island known more for it’s pirates and rum, then you should avoid. If they disappear, then your money will also disappear. There is no 911 on the island of Nevis.

Avoid any firm that wants you to pay either a monthly educational fee, a course fee, a training fee or any fee that is not related to the trading platform or data. These are all scams meant to meant to drain you of all available resources.

What About The List…

At the top of this page you will see a list of prop trading firms. When I originally put together this list, I began with over 300 potential firms. Slowly I whittled away at the list, I called every firm and did a massive amount of research. These are the only firms that I personally feel comfortable dealing with. Too many to count where outrageous frauds that contained everything from email addresses that bounced, disconnected phone numbers, no return phone calls, where masquerading as a prop firm but are actually just selling an educational package, misspelled and poorly written website content, never returned my emails, refused to give me information on whom was clearing the trades, whom owned the company, etc.

Over the Next Several Weeks

Over the course of 2015, I will be releasing a series of posts that contain specific information for each of these firms. This will include in-depth details of each prop firm. Whom you should contact, how to open an account, the trading platform that the firm uses, and many more particulars that can help you make the correct choice.

I apologize that this post consumed so much of your time. Actually, it could of been much longer. Please do not forget to leave your comments below. Please ask me questions and I will answer them as best as possible. Thanks for reading.

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58 Comments on "Proprietary Trading Firms 2015"

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Javi
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Javi
1 year 7 months ago

Fantastic Review Emmett !!! I look forward hearing more specific information for each of these firms on your list. Lots of applause to You !!!

Martvera
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Martvera
1 year 7 months ago

Thanks for this honest review. I actually am seeking Companies like these that doesn’t require an initial deposit from the trader to begin working and trading their funds.

Please kindly give me some links to such firms.
Thanks

Dom
Guest
Dom
1 year 6 months ago

Emmett, please take a look on this review and tell us that do you think. This is about Nonko Trading, smells fishy.
Link : http://www.uneducatedtrader.com/reviews/trader-alerts/trader-alert-nonko-trading-g6-trading-nevis-trading/

Tim
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Tim
1 year 6 months ago

Good job! Thanks for the article. I had an account with Nonko. I only deposited 2500. Everything was fair with them, they did exactly what they said they would and emails were answered immediately (within seconds ). I just lost all my money. If I had to go offshore again, I’d consider them if things hadn’t changed.

Henry
Guest
Henry
1 year 6 months ago
Emmett, Thank you for you thoughts and reaching out to T3 for clarification. Sorry to hear about your Dad, condolences. What you’ve said makes sense, However, there are trading sites promoting to U.S. Citizens to open accounts offshore with firms like Nanko. The pitch is that they don’t have to take the required 56 test and can avoid being compliant. There are many less knowledgeable about the law and they may be the ones in trouble in the end. Those that want to trade Forex are not required to take a test and can open account offshore, but are responsible… Read more »
Lawanda
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Lawanda
1 year 5 months ago

I agree the $25k requirement needs to be repealed, but at the very least sufficiently reduced. The margin leverages at the time of the change have been lowered and would reduce the risk of the bubble happening again. In my opinion I feel the pdt really harms more than it protects. If a trader gets into a losing trade they sometimes have to hold overnight so as not to get listed as a pdt if they had already met the 3 trades in the 5 days. It’s a really losing outdated rule.

Steven Vilendrer
Guest
Steven Vilendrer
1 year 5 months ago
Emmett, Are you aware of any prop firms that would legitimately provide access to capital with no deposit whatsoever? For example, a prop firm that would be willing to track you in a demo account for a few months. Maybe a small joining fee of $400 or less. I see Maverick and Tower Hill Training both claim to do something similar, but it sounds like these are marketing gimmicks to pull you in for more $ training? ANYONE offer this type of program? I do have some successful trading history I could provide them with. Thanks! Steve V.
Buster
Guest
1 year 5 months ago

Very informative post, i’m regular reader of your website.

I noticed that your website is outranked by many other websites
in google’s search results. You deserve to be in top10.
I know what can help you, search in google for:

Omond’s tips outsource the work

DAN
Guest
DAN
1 year 4 months ago
Emmett, I am glad I came across this page, I have recently just been accepted to trade with T3 Miami office. Just finish signing the U-4forms and have gotten that approved all that waits is my Series 56 exam that I take next month. The only difference what from you posted is that my contribution was a minium of $7,500 and my pay out starting off is 70/30, they said once I shown progress they will leverage me up then move to 90/10. But now I started looking at the NONE licensing prop firms and the contribution is way cheaper… Read more »
DAN
Guest
DAN
1 year 4 months ago

this is continue from message up top as I some how click on submit comment to soon.

*But now I started looking at the NONE licensing prop firms and the contribution is way cheaper to start exp: Shark Tank & CY Trading. what is the point of going with T3 when I dont have to pay for Licensing exams and right off the back keep 100% of my profits? or is it recommended and safest to be licensed when dealing with any prop firm in the U.S ?

Thank you

Amit
Guest
1 year 4 months ago
Dear Emmett, first & foremost.my sincerest condolences regarding your father, mine personally has Parkinson & Alzheimers. I was writing this to you because after reading your article, I attempted signing up first with CY group trading, everything seemed lovely till the next day when I asked about placing another 5k, and all if a sudden b the guy at the desk unleashed a barrage of insults. I must have apologized for my stupidity least 18 times, then said I’m not listening and hung up, when originally I wanted to merely speak to Simon, the gentleman I talked to the day… Read more »
Dave
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Dave
1 year 4 months ago

Hi Amit,

Could you conclude your post a little bit ?
Have you lost your 5k with CY or with Shark Traders? What is the actual problem ?

I am thinking about Sharks too because of the low commissions, low deposit, compared with Nonko ir CY.

Robert
Guest
Robert
1 year 4 months ago

Nonko looks good on paper. But there is this issue
http://www.dastrader.com/documents/April27-Notice-on-Nonko-g6-Nevis.pdf

I will stick with interactivebrokers even if the leverage is less.

ryan
Guest
ryan
1 year 3 months ago

Thanks for the writeup, hard to find info on prop trading for those who want to day trade with less than 25k but you really laid things out clear and gave some choices for firms.
Thanks for the research.

Jay
Guest
Jay
1 year 3 months ago
Great Post, My advice is to stay away from T3. They make all their money off of training fee’s and commissions. I used to Trade with WTS until we got acquired by T3. I had read some bad reviews about T3 but I chalked it up to a few bitter newbie traders who blew their accounts. Oh boy, was I wrong, what a nightmare! Their whole business model is based around slow rolling new traders, the majority of which are Asian’s who have an expiring student visa. I guess they figure most the guy’s won’t be in the country long… Read more »
jorge caicedo
Guest
jorge caicedo
1 year 3 months ago

Graet article..Is anyone familiar w/ MAINSTREETSAMERICA? They charge $595 for a testing fee and once you’ve passed, they let you use their capital to trade and then once you’ve reached a profit of $4k, they then split all future profits 65-35..I’m interested and spoke to a rep there but I’m kinda afraid this falls into the 4th category..any feedback is appreciated

jorge caicedo
Guest
jorge caicedo
1 year 3 months ago
jorge caicedo
Guest
jorge caicedo
1 year 3 months ago

Any word on Mainstreets? Real deal or not?

jorge caicedo
Guest
jorge caicedo
1 year 3 months ago

Wow…I appreciate your insight on this and the info to come…thank you

jim
Guest
jim
1 year 3 months ago

Hi Emmett, Im thinking of opening an account with sharktraders.com.. do you think it would be worth it? I like that they have a low minimum too start with

Ben
Guest
1 year 2 months ago

Hi,

whats your opinion on these guys? A friend recommended this site but he never traded with them though.

Regards,
Ben

Radcliffe
Guest
Radcliffe
1 year 2 months ago

Hi Everyone..

Nonko is no longer allowing new US accounts

“We do no solicit US traders to do business with us” – this the message we get when we access..
Thanks for all the warnings here..
What will happen to the accounts that people already opened from US ?

Toiby
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Toiby
1 year 1 month ago

Any news on shark traders Emmett?

chris
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chris
1 year 1 month ago

Would also like to know if you’ve received any new info on sharktraders.com. I’m seriously considering them and would like your input. The fact that you can get your deposit back and that they use sterling is appealing. They also seem to have great reviews.

Dukens Surin
Guest
11 months 13 days ago
Hello everyone, To start, I will let everyone know I do not hold a degree and I have been trading overall for about 3yrs. Some in demo but most recently live. It is in fact really a possibility to trade full time. The main issue especially for newer traders getting in the field is capital. “How do I get funded?” “Will I need to take out a loan to start?” Which are both actually legitimate questions. Well the simple answer is to become a “Proprietary Trader” or “Prop-Trader” as it’s often called. By definition “Proprietary Trader” is a “Trader” (meaning… Read more »
Trader
Guest
Trader
9 months 23 days ago

Avoid Vincent Diaz (T3 Miami office) like the plague. He is a backstabbing lying crook. Avoid Maverick Trading. Avoid Oliver Velez. Avoid traders on Facebook and Twitter. Be careful with offshore accounts, I have lost money with Global already. If you really want to trade and lack the funds necessary, do what I did and apply that knowledge to Futures Trading and you will not have to worry about any of that anymore.

Vincent
Guest
Vincent
7 months 17 days ago

What can I say to Trader’s remark other than, I have been in this industry for many years and have made many personal and professional relationships which are maintained till today. I have not been with T3 since 2013. However, I am licensed and registered with FINRA and the NFA and have gone through excruciating audits and never have had a single complaint or blemish. If there is a specific concern you wish to address contact me directly. I am sure we can resolve it amicably. Best wishes Vincent

Chris
Guest
Chris
9 months 13 days ago
Thanks Emmett, great job! I have contacted some of the listed prop firms and decided to give it a try with Shark Traders. Their emails were informative as well as the phone call they gave. I have also found some reviews on them on Seeking Alpha; all of them are good and I believe they are true. Will keep you guys up to date. Worth to note! On Seeking Alpha it was said that Shark Traders doesn’t accept traders from the USA. They confirmed this info during the phone call, so no need to consider them if you are from… Read more »
j cook
Guest
j cook
6 months 20 days ago
So glad I found your site. I do have capital to invest, but in general find most of the ‘training’ offers WAY overpriced at $1200+ with NO evidence of successful students. I DO like SMB’s daily videos,but they are more general in nature re the emotional aspects of trading. their Webinars by 3rd parties sometimes provide tantalizing suggestions on how to trade but are inevitably linked to expensive ‘classes’. So. My objective is to grow my retirement account (I’m now aged 60 and female, so no belief ANYONE would bring me as new onto a prop desk). I just want… Read more »
Trb
Guest
Trb
6 months 16 days ago

Can anyone comment about http://elitetraderpro.com/ ?

bljohndon
Guest
bljohndon
6 months 16 days ago

Ive been using them for a few years now…legit firm..had no issues whatsoever withdrawing or sending money

AJ
Guest
AJ
6 months 15 days ago

And what’s the deal with NO US CLIENTS?

David
Guest
David
5 months 11 days ago

Hello, Emmett i was checking out this site and reading the posts. i really enjoyed reading about the prop firms for equities funding. I didnt know you had to have a 56 lisence to trade with prop funds . Im seeking the futures market and for $95 you can trade their 10K, sounds better than stocks. My question to you is any knowledge of the prop firm Topstep trader? Thanks Dave

Chris
Guest
Chris
5 months 5 days ago

Any update for 2016? You still have Nonko on your list

michael stephens
Guest
michael stephens
4 months 9 days ago

Excellent article…Saved me from going with Maverik. Thank you

Joe
Guest
Joe
1 month 9 days ago

Emmett, thanks for providing this info. I have been trying to reach CY group about becoming a member and cannot get a response for some reason. I’ve sent a couple emails and left a voicemail with sales. It’s been over a week. Do you know what gives?

Joe
Guest
Joe
1 month 3 days ago

Just checking back to see if these comments are still being reviewed. Really I would just like to know that CY is still legit and up and running. Every time I call I seem to get the same person who says some other person at CY should be in contact with me. But that other person never calls. Should I be more persistent? Didn’t think it would be this difficult. Thx again.

Joe
Guest
25 days 13 hours ago
Emmett, I finally received a response from CY and apparently they have been building/finishing a new trading interface and bc of that have hardly let any new members in. They said mostly programmer background traders have joined recently “but may change soon”. Personally I am trying to find some help in figuring out if a prop firm is suitable for my situation. I do not want to “pay” for training courses, and would rather avoid the 56. CY seemed like a good solution but now not so sure. For a US trader, is there another prop firm out there like… Read more »
Burt
Guest
11 days 16 hours ago

Great article. I was checking into Maverick and you confirmed my suspicions. Thanks

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