{"id":43649,"date":"2016-05-20T18:04:57","date_gmt":"2016-05-20T22:04:57","guid":{"rendered":"http:\/\/www.smbtraining.com\/blog\/?p=43649"},"modified":"2023-08-02T17:12:50","modified_gmt":"2023-08-02T21:12:50","slug":"a-note-from-the-prop-desk","status":"publish","type":"post","link":"https:\/\/www.smbtraining.com\/blog\/a-note-from-the-prop-desk","title":{"rendered":"A note from the prop desk"},"content":{"rendered":"
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This African Proverb above presently sits on our whiteboard, just outside the trading bullpen, on our trading desk.\u00a0 It encapsulates the advantage of trading at a proprietary trading firm, and helps us raise questions about what we want to be as a trader.<\/p>\n

Let me offer five examples from the desk this week to illustrate this point.<\/p>\n

1. Trader A, Young Gun, finds CLRB, a low float opportunity that fits his PlayBook.\u00a0 He captures 8k of profit in the opportunity.\u00a0 Trader B, Heavy Hitter, hears Young Gun chirping about this name, and finds a setup that fits his trading eye.\u00a0 Heavy Hitter banks 20k (before giving back some), a 20k he would not have made, save if he was trading on the desk with Young Gun.<\/p>\n

2. Trader A finds CLRB and is putting up one of his better days.\u00a0 The managing partner notices an area where Trader A had a trade decision to take off risk in the trade.\u00a0 The managing partner does not tell Trader A how to trade the setup.\u00a0 The managing partner gives Trader A ideas to consider to make his trading more consistent and control his risk better.\u00a0 It\u2019s up to Trader A to make trade decisions, with this added perspective from the managing partner.<\/p>\n

3. Top Trader locates 30k shares of MGT to short this Wednesday.\u00a0 His trading teammates sitting next to and behind him have their shorts taken away as they located them from a different broker.\u00a0 Top Trader transfers 2\/3 of his shorts to his trading teammates so they can participate bigger in the MGT opportunity.\u00a0 The stock drops from 5.30 to 2.25 intraday.\u00a0 #WeAreAllInThisTogether!<\/p>\n

4. Hardest Working Trader has a strategy that is capital intensive, but that has edge.\u00a0 He needs some more capital right before a close to capture the most in an opportunity.\u00a0 The firm increases his capital near another $5 million.\u00a0 Hardest Working Trader executes the trade for an even larger profit.<\/p>\n

5. Floor Manager notices FOMO has an overnight position of 7500 shares that is too risky.\u00a0 He sits with FOMO and makes his case to cut the position.\u00a0 Floor Manager lets FOMO make the final decision.\u00a0 FOMO decides to cuts his short position completely.\u00a0 That position opens up 20 percent higher than the close, saving FOMO in excess of 10k.\u00a0 FOMO is kidded he owes Floor Manager lunch.\u00a0 FOMO is happy to oblige.<\/p>\n

This week I was asked by a trader in our community about an opportunity at a trading firm, for which he was skeptical.\u00a0 He wrote (edited):<\/p>\n

Hi Mike,
\nI recently signed to enter a remote trading
\nprogram with a company called (XXX) Trading Services. Upon applying and
\nwithout providing any trading records, they told me I could enter the
\ntrial program trading a live account with (very limited capital) BP. No deposit with these
\nguys but I pay for data fees but they only provide level 1 data, and
\ncharts. No level 2, no Time and Sales – they won’t let you pay more to
\nget that either. \u00a0Also there is a small list of about 90 stocks(FB,
\nBABA, APPL type stuff) they will only allow you to trade. Can enter the
\nmarket only with limit orders, nothing liquidity removing whatsoever
\nexcept exiting. They require you to trade a min of 25 trades\/day, they
\nalso say they do not want you holding trades for more than 5 minutes,
\nalthough they give some exceptions. There is no order routing, only
\ntheir smart route. Does
\nthis sound like a legit trial program or a scam
\nof some sort? Maybe making money off marked up level 1 data? Also when
\nyou call them, they never say the company name, but they only answer
\n“trading.”Website says they are also an HFT, are they just being
\nsecretive because of this? Would be very appreciative of your opinion on
\nthis.
\nThanks Mike!<\/p>\n

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To answer this trader, or to answer questions like this for you, you must first ask: What are your trading goals?<\/p>\n