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How Sub-Contactor Trading Works: |
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Sub-contracted
trading provides both licensed and non-licensed individuals
with the ability to trade on behalf of
private capital groups. As with a retail
trading account, traders are required to provide their own
equity or risk capital.
However, unlike retail accounts,
which require a minimum balance of $25,000 to qualify for
"pattern daytrading" (the ability to make three or more
intraday trades per week), Sub-contractor accounts rely on
supplemental firm capital, and thus, traders are able to
begin
trading with as little as $5,000.
Additionally, unlike
Proprietary Trading, which requires a trader to maintain
securities licensing, Sub-contracted
trading does not require a trader to join a licensed entity
and thus,
traders are not required to hold any
licensing.
Rather, traders are
hired as independent sub-contractors and receive a 1099 at
year-end from the capital groups for all account activity.
Sub-contractors are authorized to trade on firm accounts via a
Limited Trading Authorization provided by the designated
clearing firm and may trade as individuals or through
corporate accounts.
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