All with seat fees?

[Tubbs]

Could someone tell me if all of the prop firms charge a seat fee? Or do some give better deals. I have heard some give a basic wage. If so that surely negates the seat fee. There are so many of these firms that the transparency is not good. Also you tend to waste alot of time pretending to be interested in the houses until you find out the details. I wish they would just give it to you straight right from the get go.

 

[tommog]

HI,

I dont know of any prop firms thats dont ask for desk fees. But that isnt to say they dont exist.

The I.T infastructure on a trading desk is very costly and every trader goes through unprofitable periods at times and so they need to cover their costs even when you arent making money from the market. So this is why its unlikely you will find a firm that doesnt charge a desk fee.

Some firms say they charge a basic wage but this isnt anything to get excited about, the basic wage from my experience is less than the desk fees so in answer to your comment it doesnt negate the desk fee. Also the basic wage is more a right to draw on your capital without being in profit more than a no strings attached cheque from the firm.

If you were to find a firm with no desk fees I dare say the profit split would be very unfair. They will make money off you some how.

I suppose it depends on your level experience really, I have just been hired by a firm as a junior trader, so i am going to learn a trade and get my foot in the door so how much the firm charge me is of little importance to me, I would work for free. But if you are experienced with a track record perhapes they will be open to negotiate their initial deal?

Tom

 

[Tubbs]

Thanks Tommog - and good luck with it. My only problem is that you say you would trade for free. This is far from free though - it's about &18K down in a year. Hope it's possible to make that back. That is the stumbling block for me.

 

[tommog]

Thanks Tubbs,

sorry I couldnt provide you with any info on firms without desk fees.

Regarding making the 18k back, i'm sure you are aware it doesnt work on the basis they withdraw it from your bank account like a mortgage, it is withdrawn from your trading account. So say you make x amount. Then their is a profit split x/2, then the desk fees kick in (call it D) so your pay is (x/2) - D. Im sure you are aware of this. Thought id point that out incase you were making a decision not based on fact.

As for how easy it is to cover your costs I was given realistic targets that would ensure my costs are covered (but meeting them is obviously no gaurantee), perhaps some of the guys that have spent a few years arcade trading could help you out there.

 

[Tubbs]

Well thanks for humouring me regarding the withdraw of seat fee. I wasn't actually that aware of it like that. In such a case if you don't make a monthly profit (doh!) would they defer the seat fee? I actually turned down a place with LCG for me belief that I could probably not cover these costs. I must say they weren't particularly clear about it. The whole thing, as I said, is quite opaque.

 

[tommog]

I am not 100% sure of all the ins and outs of it because I havent received my contract yet but from what I have been told so far you are given an account to trade. You withdraw profit on that account when you are in profit. So say for arguments sake the desk fees are £1500 and after 2 months of trading you are break even (i.e your account size hasnt changed it is almost as if you havent placed a trade) your trading account will be debited £3000 for the 2 months desk fees. So this amount has to be made back before you can draw on your account. So you are not losing money directly by paying the desk fees, it is more the case you are deferring your own wage until you get it back.

 

[LongandWrong]

Tubbs,

Some places offer a sliding fee to help new traders, £500 in the first month, then £1000, then £1500 per month. But be under no illusions, on day 1 of trading live, your account will be debited by this amount.

However, what isn't often taught to new traders is how to do with this psychologically. Perhaps, instead of thinking of it as an annual or monthly charge, which can be quite frightening, consider it (e.g. for a £1000 monthly desk fee) that you have 20 trading days in that month, and for each of those days the cost is only £50.

In my experience, your terms with arcades ARE negotiable (which might explain them appearing as opaque), but as mentioned on this thread, the longer your track record, the more clout you carry.

Good luck with it.....

 

[Tubbs]

cheers guys very helpful