If you’ve ever wondered what it would be like to trade for a living, a new report by Trading Group’s Michael Milani spells out everything you need to know about the differences between professional proprietary (prop) traders and retail traders. Here’s a look at how the two paths stack up in nine different areas.
1. International Traders
This one is the easiest distinction. If you are not a U.S. citizen, most U.S.-based registered brokers will not accept you as a prop trader. International retail traders can simply go online and open up a trading account almost anywhere.
2. Licensing
Prop traders must obtain a securities license, which involves registering and passing either the Series 7 or Series 56 exam. Again, retail traders are funding their own accounts and therefore need no licensing to demonstrate their trading knowledge and prowess.
3. Leverage
For prop traders, leverage limits vary from firm-to-firm and account-to-account. On the other hand, leverage limits on retail accounts are strictly defined and inflexible depending on which type of trading account you have.
4. Profits
In terms of profits, you can’t beat…
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