A prop house is a trading room solely trading its own money, this is a house that backs the traders and pays a percentage of the profit but accepts all the associated risks. Typical examples Atlas & Trading Connections.
An arcade (or as we prefer to call them trading room) is a place where market connectivity and facilitation is provided but the clients are self financing. As a result the company providing this facility is generally a member of the exchanges it clears and is FSA registered to hold clients funds. Typical examples Fortis & Kyte.
Another slant is a trading room which offers connectivity, is a member on all the exchanges and FSA registered but Introduces the clients to a Bank or clearing company for clearing. Example Xconnect.
An arcade (or as we prefer to call them trading room) is a place where market connectivity and facilitation is provided but the clients are self financing. As a result the company providing this facility is generally a member of the exchanges it clears and is FSA registered to hold clients funds. Typical examples Fortis & Kyte.
Another slant is a trading room which offers connectivity, is a member on all the exchanges and FSA registered but Introduces the clients to a Bank or clearing company for clearing. Example Xconnect.
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what about trading room / prop hybrids? example, Refco fully back about half the traders here, not just the grads
To be honest I would classify them as trading arcades.
Fortis dont back anyone but have clients like TCA who do back traders and are prop shops sitting within the Arcade.
Refco offer facilities to both trading groups, self financing and by virtue of their MacFutures inheritance also back traders themselves. However as they are not a sole trading unit I would still classify them as an Arcade. Also as they "part back" they have to be FSA regulated to hold client funds.
Fortis dont back anyone but have clients like TCA who do back traders and are prop shops sitting within the Arcade.
Refco offer facilities to both trading groups, self financing and by virtue of their MacFutures inheritance also back traders themselves. However as they are not a sole trading unit I would still classify them as an Arcade. Also as they "part back" they have to be FSA regulated to hold client funds.
