The type of prop firms you are describing are really just back office pools or trading arcades.
Actually, no, the type of prop firms I am describing are typically small (in terms of personnel, not in terms of AUM) hedge funds which run some manager’s own money and some outside money.
Facilities for day traders are a different thing entirely and I don’t talk about them here.
I guess we are talking about two different things then, I have never heard of any one talk about the term prop firm in your sense. Doesn’t make it wrong though.
Edit: If you are describing a small hedge fund that manages the managers money and outside money, then its just a hedge fund any way you cut it. Proprietary means only the firms capital is used, and for no clients.
And how does that matter for the original point under discussion—whether someone outside of an investment bank or a big hedge fund family (e.g. Blackrock) can successfully extract money out of financial markets?
If someone actually has a working strategy, he typically doesn’t just trade it, he starts a small hedge fund.
Because the original point under discussion was contrasting prop trading in the context of a real prop firm vs an outsider engaging in prop trading, and the advantages afforded to the former.
Anyway, I already know your position regarding whether an outsider can successfully extract money out of the financial markets and you know mine.
Curious, what do you do if you don’t mind me asking? I’m asking because you do know a lot about this topic, even though we disagree on somethings.
Actually, no, the type of prop firms I am describing are typically small (in terms of personnel, not in terms of AUM) hedge funds which run some manager’s own money and some outside money.
Facilities for day traders are a different thing entirely and I don’t talk about them here.
I guess we are talking about two different things then, I have never heard of any one talk about the term prop firm in your sense. Doesn’t make it wrong though.
Edit: If you are describing a small hedge fund that manages the managers money and outside money, then its just a hedge fund any way you cut it. Proprietary means only the firms capital is used, and for no clients.
And how does that matter for the original point under discussion—whether someone outside of an investment bank or a big hedge fund family (e.g. Blackrock) can successfully extract money out of financial markets?
If someone actually has a working strategy, he typically doesn’t just trade it, he starts a small hedge fund.
Because the original point under discussion was contrasting prop trading in the context of a real prop firm vs an outsider engaging in prop trading, and the advantages afforded to the former.
Anyway, I already know your position regarding whether an outsider can successfully extract money out of the financial markets and you know mine.
Curious, what do you do if you don’t mind me asking? I’m asking because you do know a lot about this topic, even though we disagree on somethings.