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  • #17,001
  • Jun 23, 2023 3:15pm Jun 23, 2023 3:15pm
Quoting TraderTero
{quote} At least they don't openly admit using client funds to pay for b-book losses. Most don't even admit b-booking the flow and claim client funds being segregated.
Right, and these are the fuckers being "regulated" by the NFA/CFTC. 100% proves the point of not needing regulation
  • #17,002
  • Jun 23, 2023 3:18pm Jun 23, 2023 3:18pm
Quoting TraderTero
{quote} At least they don't openly admit using client funds to pay for b-book losses. Most don't even admit b-booking the flow and claim client funds being segregated.
Agree with brokers but with prop firms I will be more scared if any online prop firm with challenge type model says they are A booking. Most online prop firms are not worried about consistent winners. Good prop firms like MyFF and FTMO most likely A book traders when they exceed 5-10% of profit to payout outliers. Statistics doesn't support A booking on online prop firms.
  • #17,003
  • Jun 23, 2023 3:20pm Jun 23, 2023 3:20pm
Quoting pipmaster77
{quote} Right, and these are the fuckers being "regulated" by the NFA/CFTC. 100% proves the point of not needing regulation
Actually B booking is not a bad thing. I remember when FXCM got busted because of CHF pegged removed, Forex.com published profit of in millions.
  • #17,004
  • Jun 23, 2023 3:28pm Jun 23, 2023 3:28pm
Quoting TraderTero
At least they don't openly admit using client funds to pay for b-book losses. Most don't even admit b-booking the flow and claim client funds being segregated.
-So if they do not admit it, then it's okay? Most props do not openly admit things, either.

If a broker is not using client funds to pay for B-book losses, then where else would the money be coming from? Investors? The fact remains that B-booking is allowed. Same with trading via a middleman that collects money off of the backs of you and other traders.

My whole point about ponzi vs. non-ponzi is that it's not always so simple. There are many legitimate models that could be considered a ponzi, based on how they are structured, but that does not mean anything.

Quoting TraderTero
Madoff didn't use any client funds to trade stocks but I believe that it would not have made any difference had he traded some some stocks with the client funds.
-Really? Why? What is the determining factor? Intention? Percentage of investment? Profit allocations?

Not trying to be argumentative, but I just do not think that it is as simple as you might think. As traders we are providing trading data. Some might say that we are signal providers. No matter how you look at it, there is a legitimate argument to be made. The fact that we have to pay for our challenge fee is also not a bad thing. It helps to weed out bad data.

When you apply for licensing, or enroll for a degree, you also pay money in order to take the necessary exams to ensure that you are good enough. In such cases, you are not given a refund upon successful completion.

When you go to a casino and buy chips to play blackjack, the money that you are winning from the house is coming from customer funds.

Personally, I think that the opportunity that remote props provide is filling a need. There is demand for such services. The people that sign up, do so, willingly. They are not too dull to think that they are all getting pushed to a live market or that all of their trades are getting copied over. They are signing up for an opportunity to get funded, knowing full-well where that money is probably coming from. And they accept it; risks and all.
  • #17,005
  • Jun 23, 2023 3:41pm Jun 23, 2023 3:41pm
Quoting Nsak3y
{quote}-So if they do not admit it, then it's okay? Most props do not openly admit things, either. If a broker is not using client funds to pay for B-book losses, then where else would the money be coming from? Investors? The fact remains that B-booking is allowed. Same with trading via a middleman that collects money off of the backs of you and other traders. My whole point about ponzi vs. non-ponzi is that it's not always so simple. There are many legitimate models that could be considered a ponzi, based on how they are structured, but that does...
My point is that it is insignificant what you and me think or what the props claim to be doing. If and when SEC decides to go after these companies they can use any argument they wish in order to accomplish their goal such as ponzi, wire fraud, ml, fraudulent marketing etc. Binary Options is a good reference.
  • #17,006
  • Jun 23, 2023 3:44pm Jun 23, 2023 3:44pm
Quoting sampat
{quote} Actually B booking is not a bad thing. I remember when FXCM got busted because of CHF pegged removed, Forex.com published profit of in millions.

B-booking is a very good business because eventually every trader will lose. You just need deep pockets. Besides you can always blame that the winners have been using arb and refuse payment. FX is a really ugly business.
  • #17,007
  • Jun 23, 2023 3:49pm Jun 23, 2023 3:49pm
Quoting sampat
{quote} Actually B booking is not a bad thing. I remember when FXCM got busted because of CHF pegged removed, Forex.com published profit of in millions.
It is a straight up conflict of interest. You win, they lose and they control the software. The CHF peg was back when FXCM was actually STP and they got busted as they owned one of the LPs, so they were b-booking under the disguise of A- book. Oanda and Forex.com made a killing because they held the other side of all the folks holding the longs. Of course, they froze the platform and did all of the other tricks that the regulators seem to not pay attention to, so the few that were on the right side couldn't close. USA brokers are the biggest scams in the entire world regulated by the even bigger scams.
  • #17,008
  • Jun 23, 2023 3:52pm Jun 23, 2023 3:52pm
Quoting TraderTero
My point is that it is insignificant what you and me think or what the props claim to be doing.
-Perhaps. But I would not say that it is meaningless.

Quoting TraderTero
If and when SEC decides to go after these companies they can use any argument they wish in order to accomplish their goal such as ponzi, wire fraud, ml, fraudulent marketing etc. Binary Options is a good reference.
-Probably, most here can agree with this statement. But, there are some considerations that probably need to be made. Such as jurisdiction, not only in terms of regulatory scope, but also geographical/geopolitical jurisdiction.

I suspect that props may eventually be treated similarly to brokers. Some will have to shutter while others may relocate offshore. Perhaps some could find a way to go fully-legit, meeting all compliance requirements, but I do not know. And perhaps, also, new legislation will eventually to be written, similarly to what we might see with crypto, since what we are dealing with may not exactly have any identical precedence.
  • #17,009
  • Jun 23, 2023 3:57pm Jun 23, 2023 3:57pm
Quoting pipmaster77
It is a straight up conflict of interest.
-Absolutely right. However, objectively speaking, if the only model that existed was A-book, then there would probably be fewer brokers, wider spreads, higher commissions, lower leverage et al..

Probably, the best hope that we have is to find a hybrid broker that will quickly bump you to A-book once you have proven that you are worthy, that way, you will still get paid even if you crush it in the markets (hopefully), and the broker will not have to pay you out of pocket and can actually be rooting for you to succeed.
  • #17,010
  • Jun 23, 2023 3:58pm Jun 23, 2023 3:58pm
Is b booking a Ponzi if there are mostly losers? Ponzi is paying out old investors with new money. Suggesting all will make money, brokers and props are not promising anyone will make anything. So is it a Ponzi?
  • #17,011
  • Jun 23, 2023 4:01pm Jun 23, 2023 4:01pm
Quoting TraderTero
{quote} B-booking is a very good business because eventually every trader will lose. You just need deep pockets. Besides you can always blame that the winners have been using arb and refuse payment. FX is a really ugly business.
Brokers, prop firms, all of it........a winning trader is a liability. They want you to lose. How ridiculous is it that we trade against these entities and they control the entire game........spread, slippage, freeze the platform, random price spikes, etc.
Imagine betting sports with a bookmaker and knowing they could control the outcome of the game. Playing roulette where YOU KNEW they had a magnet under the table and could make the ball land wherever they wanted. Yes, extreme examples, but not that far off.
This is the main reason I started trading DOW and NAS futures several months back. I will continue to trade with props until if/when they tell me I can't. Backup plan already in force.
  • #17,012
  • Jun 23, 2023 4:04pm Jun 23, 2023 4:04pm
Quoting Takisd
Is b booking a Ponzi if there are mostly losers? Ponzi is paying out old investors with new money. Suggesting all will make money, brokers and props are not promising anyone will make anything. So is it a Ponzi?
You had access to information that most of us don't. Quick question: even paying winner with the fees of losers, can't this be a "normal" business just like lottery ?
Lottery big winners are paid by all the small losers and the house still cut his share. And this is not a ponzi.

A model like that is not viable in props ?
  • #17,013
  • Jun 23, 2023 4:12pm Jun 23, 2023 4:12pm
Quoting Capablanca
{quote} You had access to information that most of us don't. Quick question: even paying winner with the fees of losers, can't this be a "normal" business just like lottery ? Lottery big winners are paid by all the small losers and the house still cut his share. And this is not a ponzi. A model like that is not viable in props ?
most of the brokers I worked for run a net hedge model. So it’s not technically b book. That being said there has been a significant rise in volumes and broker profits on b book recently. The core difference with props and brokers is there is no deposit, it’s much much easier to operate a full bbook with deposits vs a refundable fee. Brokers need time to produce b book profits, prop firms need volume of purchase to produce b book profits .

also despite what some loud mouths say, the prop industry hasn’t taken much of anything from the brokerage market. Their net incomings are at records also.

comparing prop to lottery is a bit of a mistake or gambling if any kind really because the user can control the outcome. Gambling and lottery would suggest that the outcome cannot be controlled by user behavior. It’s why people separate online poker from casinos the human element is the deciding factor not the house. Or at least we hope not the house.
  • #17,014
  • Jun 23, 2023 4:14pm Jun 23, 2023 4:14pm
Quoting Capablanca
{quote} You had access to information that most of us don't. Quick question: even paying winner with the fees of losers, can't this be a "normal" business just like lottery ? Lottery big winners are paid by all the small losers and the house still cut his share. And this is not a ponzi. A model like that is not viable in props ?
I guess the difference is this..........Will the entire model collapse without new players? In the lottery everyone buys a ticket, the winners are paid from that one drawing, like a raffle. With the props, if it is solely reliant on fees, you cannot pay the winners who started the game 3 months ago or longer without new players today. It would be equivalent of a lotttery, if say, all challnege fees paid today would be paid out to the top 5 traders at the end of certain period..... 1 day, 1 week, 1 month, whatever. Say firm takes 20%, the balance split between all the winners. Then tomorrows fees starts a new pool of money.
To me, this model is like the Social security system here in the US......you pay in all of your working life and when you collect in retirement, you are being paid with the new working people of today paying in........PROBABLY THE BIGGEST PONZI IN THE WORLD and proudly run by the US Government!!!!
and, yes, I am fucking bitter, everything I've evr done to make money in my life, they regulate the shit out of it.
  • #17,015
  • Edited 9:37pm Jun 23, 2023 4:17pm | Edited 9:37pm
Quoting Capablanca
Quick question: even paying winner with the fees of losers, can't this be a "normal" business just like lottery ? Lottery big winners are paid by all the small losers and the house still cut his share. And this is not a ponzi. A model like that is not viable in props ?
-This is my point. Bribery vs. lobbying. Gambling vs. trading. Lottery/raffles vs. giveaways/prizes.

Some things are allowed, depending on how they are packaged and/or presented or perceived etc.. The same concepts can apply to many things in life. The laws are not perfect and are usually biased, hypocritical and/or having elements of conflicting interests etc..
  • #17,016
  • Jun 23, 2023 4:17pm Jun 23, 2023 4:17pm
everyone is so fixated on challenges and payouts how safe are these quasi ponzi brokers....how can you trust them with your credit or debit card info much less your bank account numbers? seems it would be very easy for the shady ones to start stealing and co-opting someones identity
short trump and go long the deepstate
  • #17,017
  • Jun 23, 2023 4:18pm Jun 23, 2023 4:18pm
Quoting pipmaster77
{quote} I guess the difference is this..........Will the entire model collapse without new players? In the lottery everyone buys a ticket, the winners are paid from that one drawing, like a raffle. With the props, if it is solely reliant on fees, you cannot pay the winners who started the game 3 months ago or longer without new players today. It would be equivalent of a lotttery, if say, all challnege fees paid today would be paid out to the top 5 traders at the end of certain period..... 1 day, 1 week, 1 month, whatever. Say firm takes 20%, the...
theres a sucker born every minute so the pool of players is infinite
short trump and go long the deepstate
  • #17,018
  • Jun 23, 2023 4:19pm Jun 23, 2023 4:19pm
Quoting Zebi
everyone is so fixated on challenges and payouts how safe are these quasi ponzi brokers....how can you trust them with your credit or debit card info much less your bank account numbers? seems it would be very easy for the shady ones to start stealing and opting someones identity
most of them use third parties who manage security like stripe etc. also until the gravy train stops I guess we could assume it’s safe for now. But it’s definitely a risk, especially the kyc part
  • #17,019
  • Jun 23, 2023 4:21pm Jun 23, 2023 4:21pm
Quoting pipmaster77
{quote} I guess the difference is this..........Will the entire model collapse without new players? In the lottery everyone buys a ticket, the winners are paid from that one drawing, like a raffle. With the props, if it is solely reliant on fees, you cannot pay the winners who started the game 3 months ago or longer without new players today. It would be equivalent of a lotttery, if say, all challnege fees paid today would be paid out to the top 5 traders at the end of certain period..... 1 day, 1 week, 1 month, whatever. Say firm takes 20%, the...
I think the prop market is bigger than the lottery rn. Other than maybe those billion dollar ones but the regular power ball I think it is competing. That’s why regulation is coming. Can’t go getting people wealthy without Uncle Sam on top of it
  • #17,020
  • Jun 23, 2023 4:40pm Jun 23, 2023 4:40pm
Quoting pipmaster77
Social security system here in the US.....PROBABLY THE BIGGEST PONZI IN THE WORLD and proudly run by the US Government!!!!
-Yes. To be fair though, my father worked his whole life and paid into SS until he died. Because of this, his wife and their two younger boys were able to be supported even after he was gone. Not to say that SS was necessary for that, but I do suspect that most people would not set aside money otherwise. Most Americans are living paycheck-to-paycheck and lack the ability and/or proper know-how to save.

Quoting pipmaster77
and, yes, I am fucking bitter, everything I've evr done to make money in my life, they regulate the shit out of it.
-Let's not forget about taxes.

The money that you work so hard for gets hit with a heavy tax. That same money gets taxed again whenever you buy something. If that something is a large purchase, it gets taxed again at point of sale and then taxed again each year that you own it. Then, if you decide to sell, the money that you gained from the sale of your property may get taxed again. When you spend that money, you will pay taxes again and the cycle repeats. The person that buys your property gets taxed at point of sale and yearly etc.. That same money will get taxed, in perpetuity, as it exchanges hands for more goods and services.

The key is to reinvest profits, leverage debt intelligently and defer taxes until death. Real estate is a good vehicle for that.
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