Are proprietary trading firms on Wall St legit?

This firm is located on Wall Street, I had an interview they basically asked me about stock trading history and pitch them a stock and analyze it, the usual stuff... Couple of hours later they e-mailed me saying I was qualified for the training program (requirement for break-in for the internship which eventually lead to full-time based on performance)... So basically pay $1k for the training program and then if I pass the exam, I get to either become a Financial Analyst 92+ score or Prop Day Trader 85+ Score... Interning for 2 - 3 months (paid), then based on the performance I would get hired full time or not...

I don't know I just didn't think it was this simple? Is $1k for 5 days of training too much? or too good to be true? I mean it the covered material looks extensive based on the link... And the only reason I think it's not a scam is that the paid internship would easily cover the $1k for the training no? (Unless I fail on my part and bomb the exam)...

And also is this legit to be able to trade without take any FINRA licensing exams?

So to summarize...

-$1k for 5 day training program which results in final exam if passed, gets paid internship (maybe eventually leading to full-time based on performance)
-Trading using company's assets
-It's on Wall Street
-It doesn't require any Series 7/series 60's exams...Just the qualification exam at the end of the training session
-No deposit necessary as far as I know...
-I heard from a source that the trading software itself might be expensive...

So I'm just asking any experienced prop day traders to assess these aspects to see how legit this firm would be?

EDIT: The company is called Explore Trading Capital, and on their website has a tab called training programs and under stock professional trader it explains all the topics covered for the training...I personally think it's an extensive list, or am I just an amateur?

Comments (43)

Aug 3, 2012

The company is called Explore Trading Capital, and on their website has a tab called training programs and under stock professional trader it explains all the topics covered for the training...I personally think it's an extensive list, or am I just an amateur?

Aug 3, 2012

any prop trading firm that forces you to put in your own capital is shit

Aug 3, 2012
ky0ung:

any prop trading firm that forces you to put in your own capital is shit

Aug 3, 2012
UFOinsider:
ky0ung:

any prop trading firm that forces you to put in your own capital is shit

Aug 3, 2012

It is more of an arcade or bucket shop than a prop shop. The grand is so that they can cover their own cost of 'training' you. They will push all of the costs down on you. Skip it and move on. This is legit, but totally f'd up. And nobody on the street will take your career move seriously.

You don't need a FINRA license to trade. The licenses are geared to sales practices and B/D types. But if you do get into a shop, you might want to look into getting one.

Aug 3, 2012
Gomez Addams:

nobody on the street will take your career move seriously.

Yes. I know exacly one guy that went from these types of shops to a legit firm, and he was good, I mean KILLLING IT. You're better off as a trading assistant, at least you'll learn something and get a shot at a good desk.

Aug 3, 2012

Hmm so how would one go about getting into one that doesn't require personal capital? And what would it be like? They train you for free and then you work there?

Aug 3, 2012
SkepticalOptimist:

Hmm so how would one go about getting into one that doesn't require personal capital? And what would it be like? They train you for free and then you work there?

They train you and they pay you then they hire you and they pay you more. It's like a normal human job.

Aug 4, 2012
BlackHat:
SkepticalOptimist:

Hmm so how would one go about getting into one that doesn't require personal capital? And what would it be like? They train you for free and then you work there?

They train you and they pay you then they hire you and they pay you more. It's like a normal human job.

Aug 4, 2012

http://www.exploretradingcapital.com/career
This is probably the sketchiest company I have ever seen. Looks like a cross between JG Wentworth and JT Marlin.

Also n'thing the statement that you should never pay to work somewhere.

Dec 4, 2012

It is sketchy. Check Glassdoor for more on Explore Trading Capital. From knowledge of the CEO's poor integrity, I can assert that even some of the positive testimonials are by him or directed by him.
It's a 1-5 person company (with a revolving door for the last couple years with new employees coming in constantly on a temporarily basis and leaving, save the owner/CEO).
The 1K class is taught by him and I know some friends who took it and felt like it was an absolute waste and taking advantage of international students who were very eager for a job and sponsorship, enough to pay $1K cash or money order. The promised internship is not given to everyone, even after most pass the exam. Not to mention the internship is unrelated to the trading. It's an Account Executive or loan officer and one's 'salary' is commission based. If you have a degree you can do much better elsewhere, please don't waste your time at Explore Trading Capital.

At the very least, please check the contracts you receive carefully before signing up for anything, so you can legally protect yourself.

    • 1
Dec 4, 2012

No. The latter ones aren't necessarily scams. The truth is you can't pattern trade unless you have $25,000 and they provide you leverage and inexpensive routes. Some of them are scams, but groups like WTS are legit. Let me know if you get the same ECNs, commissions, leverage, etc on your IB account or whatever you use. I'd be shocked. You also keep 99% of what you make. At a salaried firm you might get 20% and how much you get depends on how well everyone else is doing.

Dec 4, 2012

If you get a salary NO MATTER your performance, as well as regular holiday pay, some sort of benefits (maybe), then its not the worst deal IMO.

Dec 4, 2012

A lot of the top prop shops pay high-5 to 6 figure salaries, have free food, and give you nice benefits/vacation. I'd guess there are fewer than 20 of these types of shops.

Dec 4, 2012
balladechina212:

A lot of the top prop shops pay high-5 to 6 figure salaries, have free food, and give you nice benefits/vacation. I'd guess there are fewer than 20 of these types of shops.

Here in Chicago there are lots of small ones. The ones that are still doing well generally have a diverse background of skills and everyone works with each other sharing research, code, and working as one unified book.

We're about 12 people. Salaries are quite nice. One person funds the whole operation and pays out.

Dec 4, 2012

i'd say that's an accurate list. if they can afford free food you know its good. if no free food + crummy carpet, dingy drywall, and office max furniture, run!

Dec 4, 2012

It depends ALOT on what shop. They range from legit places like DRW, Optiver, CTC etc. to basically trading arcades where you have to put money down. If you're at a legit place, it would be an awesome experience and great for credentials. The interview process at those places is insane.

Dec 4, 2012
FIASCO:

It depends ALOT on what shop. They range from legit places like DRW, Optiver, CTC etc. to basically trading arcades where you have to put money down. If you're at a legit place, it would be an awesome experience and great for credentials. The interview process at those places is insane.

Those firms in chicago that offer a decent base salary and give extensive training, are good places to start a career. But vast majority of prop shops are factories where they take your money and spit you back out if you are not immediately making money.

I would still take a BB S&T desk over prop shops, due to the networking and broader exposure to the market.

Dec 4, 2012

There are too many variables across prop shops to lump them into one category like banks.

do hedge funds or bank prop desks take people from prop shops? all of the lists I have seen of top paid traders are either traders at hedge funds or run hedge funds, never prop shops. why? are these jobs strictly inferior to trading prop at a bulge brack bank or hedge fund?

People hire whoever they want. However, if you have a proven strategy, why would you want to go work for someone else? It's alot easier to make trader monthly's lists though a 10% return on $1B AUM than somebody trading a significantly smaller stake/ their own capital. Not that it matters with the kinds of numbers that fund managers are putting up now, but we aren't allowed to talk to anyone outside our company about performance.

do these people learn the same trading techniques used at bulge bracket banks?

By nature of the business, prop guys are not gonna have any experience with flow trading institutional clients 100,000 share orders. Strategies come and go. Past performance is not indicative of future results at a bank or a prop shop.

are the top shops as selective as bulge bracket banks? if so, why would people choose them over banks?

Several prop shops are recruiting at many of the same schools that banks do. It is a completely different culture/ hierarchy/ career path. They tend to attract different types of candidates.

what is the salary? I have searched countless places and get nothing. no shit it depends on performance but could someone give some sort of range or average after a few years out of college? do good/above average traders earn 10 million or 100,000...? what is starting salary at the top prop shops first year out and do you get a bonus the first year (do you start trading first year?)?

Not all places pay a salary...I would tend to stay away from these though unless you really don't have any other options. $42k to start, salary capped at $60k by end of first year, bonus depends on your contribution to the bottomline/ group performance. I started trading after working at my firm for 5 days, but much of our training is experiential vs. classroom.

what products do hedge funds commonly trade (in the sense that you need discretionary "traders"). I have heard macro type things but what else? does places like SAC Capital have equity derivatives, credit, interest rate derivatives,etc etc "traders"

What don't they trade? Some places tend to be focused on a particular expertise, whereas others have multiple strategies in various portfolios from the same fund.

Dec 4, 2012

Hey trig, can you really make 200k your first year? Do you keep a certain % of profit or do they just throw you a bonus based on how the market is?

Dec 4, 2012

you can make 400k your first year. I know people that have!

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Dec 4, 2012

trade4size, do you know what the typical compensation structure is for a shop like trillium?

Dec 4, 2012

What kind of skillset are they looking for in prop-shops? Heavy quant skills? Kids who rock the brainteaser questions?

NEVER lose your BlackBerry
www.conveniencesoftware.com

Dec 4, 2012

guimion- I have a vague idea how it works, but i think really your focusing on the wrong thing. If you are a good trader you will make a lot of money, THE END.

convenience software- no unless your talking about Jane Street then yes. Most prop traders employ a short term approach that they have some sort of proven edge in. I would say as far as skill set they want driven hungry people that want to make a lot of money. People that are comfortable taking risks, able to quickly do simple math in their head is also critical.

"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.

Dec 4, 2012
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Dec 4, 2012