Hi guys, i got this great email and response from another member about Prop firms as well a good way to get around the 25K issue. Just an idea, not investment advice or talking down prop firms.
The member writes:
I've been with 3 or 4 prop firms in the past but don't know if I would ever go with one again. The rules of the game have changed. In order to do things properly and not be guilty of illegally trying to circumvent the securities laws regarding customer accounts, prop firms now need to meet certain requirements, such as not having traders put up their own capital, not giving full payouts of trading profits, etc. Some firms try to finesse these requirements and can get into trouble if they aren't careful. You are also at risk of them going under with your capital as one prop firm did not too long ago. A safer way to get around the $25k day trading requirement might be to open 2 or more small accounts with different brokers and make sure you don't make more than 4 day trades within 5 business days in any one of them. Additional accounts can be IRAs, your spouse can have another, etc...
Wednesday, September 2, 2009
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