These types of companies allow individual traders to trade with the company's capital. In return, the firm generally takes a share of the profits and charges a monthly fee for use of the desk or software platform. The word "proprietary" indicates that the firm's traders use the firm's capital to make trades rather than client funds, as in a traditional brokerage. This structure allows the firm to take on riskier bets because it is playing with its own capital, not client capital. Proprietary investment firms generally look for traders who can develop profitable strategies, so they often offer educational and training components to help traders learn about the markets and different trading strategies.
The benefits of trading with a proprietary firm like Kortana include:
Access to capital: Many traders do not have a large amount of capital to invest when they start trading. Through the challenge model, traders can gain access to significant sums of money that they would not otherwise be able to trade
Risk mitigation: The trader does not risk his or her own capital in the markets when trading with the firm's money. If trades go wrong, the company absorbs the loss. -
Profit sharing: A significant portion of the profits (usually 70% to 90%) goes to the trader. This can be an excellent income opportunity for successful traders.
Learning and development: Many of these companies provide educational resources and community support, which can help traders develop their skills and strategies. They also often provide feedback and reports to their traders, helping them improve their trading performance.