Proprietary Trading in India
Whenever a company or bank decides to trade bonds, stocks, commodities, derivatives, or other types of financial instruments that are located within the account while they use their own funds instead of the money from clients, this will be called proprietary trading or prop trading. This will allow the company to gain profits from the trade instead of commission from client trades. Financial institutions and banks will use this trading type to increase profits. They will be considered more advanced when compared to a single investor due to the marketing data that they have access to. They also have sophisticated trading and modeling software. In India, prop trading is not usually business and it is very rare based on the number of traders in this country.
By theory, there are several strategies that a prop trader will use like global macro-trading, arbitrage, etc. in order to increase returns. Even though this type of trading is considered to be risky, it can be very profitable for banks. During 2008 in the Financial Crisis, hedge funds and prop traders were attacked during this time. This caused the introduction of the Volcker Rule, and this is what limited prop trading and regulated how it operates. This was to avoid any type of issue that can happen between the clients and firms. However, a single investor will not be able to benefit from this trading type due to the activity not involving trades on client behalves.
When we talk about proprietary trading companies in India we can see that their names and websites change very often because they merge, change over time, make transformation very fast.
Proprietary trading in India
Proprietary trading companies in India are:
- Adroit Financial Services
- Ariston Capital Services Pvt. Ltd.
- BLB Limited
- Capstone Securities Analysis Pvt Ltd
- Dolat Capital
- Dynamic Trading Company
- Edelweiss Capital
- Estee Advisors Private Limited
- Focus Comtrade
- Futures First Info Services Pvt. Ltd.
- IDBI Capital Market Services Ltd
- IKM Investor services Ltd.
- India Advantage Securities Ltd
- Jaypee Capital Services Ltd.
- Kredent Trading
- Kumar Share Brokers Limited
- Mansukh Securities & Finance Ltd
- Raptor Trading Group
- SMC Global
- TransMarket Group L.L.C
- Trenchant Financial Technologies
Here more information about prop companies in India:
Adroit Financial Services
Adroit has changed itself from a Stock Broking Company to a Financial service provider that is very successful. Trend-setting steps were taken by the company that caused it to emerge as a professionally managed capital market service company that is recommended by many for providing broking services, IPOs, mutual funds, commodities, currency derivatives, internet training, and depository services.
National Commodities and Derivatives Exchange Ltd. (NCDEX), National Securities Depository Ltd. (NSDL), Central Depository Services Ltd. (CDSL) Multi Commodity Exchange of India Ltd. (MCX). A strong base of well-trained and very experienced Arbitrageurs and Traders, they ensure premium quality service to clients and customers through the many branches spread across India.
Adroit was founded in 1994, and it is privately held and employs 501 to 1000 persons. Arbitrage Business, Online Trading (Commodity, Equity, Currency) The main office is located at Kaushambi, Ghaziabad, U.P.
Ariston Capital Services Pvt. Ltd.
Ariston Capital Services Pvt. Ltd. Has interests in debt syndication and management advisory, M&A, and private equity placement. The company is a Consolidated Financial Services Group and they focus on sectors such as airports, ports, infra ancillary, logistics, manufacturing, mining, power, and roads. It is a privately held company, that employs 11-50 persons
They can be found in Mumbai, and this is their website http://www.ariscap.com
BLB Limited knows about the art and science of risk-free trading. As the flagship company, it is the leading liquidity provider to the derivative and equity markets in India.
The company has been one of the leading players in the market and it integrates risk-free trading and technology aimed at value creation. BLB has been consistently ranked among the top 10 traders by BSE Limited. The Company’s daily traded volume is over USD 200 million for its average daily traded volume.
BLB has an immaculate understanding of trading dynamics and market structure and they use the latest technology to generate superior trading returns.
They have been specialists in Jobbing and Arbitrage distinguished by their capital commitment and great understanding of trading dynamics and market structure.
Capstone Securities Analysis Pvt Ltd
Capstone Securities Analysis Pvt Ltd (CSA) a financial services firm that is engaged in online trading of shares in US securities, mainly in the very active NASDAQ, Amex stock, and NYSE. Traders at Capstone have been conducting research and trading since May 2005. Capstone’s management insists on seeking to encourage the career growth of its professionals by providing the best performance incentives in the industry. They also offer leading technology and comprehensive career trader training and opportunities.
Their trader recruitment, training, and management program is a special opportunity designed to maximize trader skills they teach discipline, intellectual achievement, and focus.
Capstone is also a pioneer in providing intra-day trading and research services and for its customers.
A company that is managed and operated by industry veterans, Capstone offers young talent opportunities to develop skills and build careers so they can enjoy the same lifestyles as exceptional traders.
Their offices are found at Commerzone, Tower 1, Ground Floor, Airport Road, Off, Samrat Ashok Path, Yerawada, Pune, Maharashtra 411006, India
Dolat Capital Market Pvt. Ltd. Adheres to mathematical and statistical techniques and also use multi-strategy trading, as they are dedicated to producing superior returns. They trade actively in all Asset classes: futures, commodities, currencies, options, equities, and fixed income as they take advantage of their ultra-low latency infrastructure. Which is in C++, one of the most competitive in latency.
. We trade actively in all Asset classes: equities, futures, options, commodities, currencies, and fixed income taking advantage of our ultra-low latency infrastructure, which is in C++, one of the most competitive in latency.
The firm was started by legendary trader Dolatbhai Shah, in 1971, he provided two-sided markets in non-listed equity derivates in India.
Dolat Capital is a privately held company that was founded in 1970, their headquarters is, located in Mumbai, Maharashtra, they employ 201 to 500 persons at this time. The team at Dolat Capital has a team that constantly works towards innovation, they have dedicated to producing superior returns by using their superior methods.
Dynamic Trading Company is a privately held company that was founded in 1984 and has its headquarters in Chennai, Tamil Nadu, India. They are in the business of trading and supplying supreme quality mechanical transmission products.
The very experienced staff offers Tools, Industrial Automation Components, Universal Joints, Mechanical transmission Couplings, Industrial Engineering Tools, Ball Transfer Units, Pulleys, Mountings, Grippers, Automation Components, Seal/O-Rings, and couplings.
Their skilled technicians are experienced professionals who are quality analysts who will always deliver on time.
The Company employs 11 to 50 persons, at this time.
The Edelweiss Group is a leading diversified financial services conglomerate, providing a broad range of services and financial products to a broad client base that includes individuals, corporations and institutions in India.
Relentless focus on governance and prudent risk management is central to what they do. Their customer-centric initiatives and intelligent way of investing in people, technology, and brand are seen as their differentiated approach to business, this has helped them to step up performance and they can now say they are ready for the future.
Their journey for the past 2 decades can be put together in 5 phases, each vastly distinctive from others. Each of the phases has been challenging but highly rewarding.
The business can be found at Edelweiss House, Off, C.S.T. Road, Kalina, Mumbai, 400 098
Estee Advisors Private Limited
Estee Advisors Private Limited creates algorithm-based investment products. They currently provide arbitrage products and index replication for the Indian market. Their PMS strategy, I-Alpha, has been in the market for 5 years with best in class returns. Sandeep Tyagi promotes the company, an entrepreneur who is experienced and has close to two decades of experience in Financial Services, computer science, and analytics.
This is their website http://www.esteeadvisors.com
And they are found at 8th Floor, Block I, Vatika Business Park, Sohna Road, Sector 49, Gurugram, Haryana 122001, India
Focus Comtrade commenced its operations in 1999 by a team of professionals who had vast experience in many industries and businesses. They are committed to delivering the best value to investors through innovative products, state of the art technology, personalized service, and Investment/ Trading Strategies.
The company employs a very skilled team of analysts who are supported by a professional team of leaders who are backed by a strong research team with technical, astrological, and fundamental analysis.
They use a process-driven, diligent approach, powerful research and analytics, and a highly recommended dealing room.
Their focus is, to deliver with vision and they now offer a range of financial products and services, such as Equity and Commodity Broking, Portfolio Management Services, Online Trading, and Research E-Magazine.
They put the customer first, at all times and they have a team of highly trained traders who have created a track record in producing good returns.
Focus Comtrade is found at 401/405 Dalamal House, 4th Floor Plot No. 206, Jamnalal Bajaj Road, Nariman Point, Mumbai -400021.
GoSTX is a Prop Firm that allows individuals to create trading laboratories for themselves. Registration is simple, fast, and free on their website. The firm is looking for talented or persons who want to learn how to be stock traders (day traders) persons will trade with real capital with no risk or cost to them during a trial period.
IDBI Capital Market Services Ltd
IDBI CAPITAL MARKETS & SECURITIES Ltd., (IDBI Capital) is a leading Investment Banking and Securities Company that is also a subsidiary that is owned by IDBI Bank Ltd.
The range of services they offer includes Research Group, Debt Placement, and underwriting, Fund management (Managing Assets-Pension/PF Fund Managers for clients) distribution of financial products, Project appraisal & Debt syndication, Stockbroking- Institutional and retail, Corporate advisory services, mergers and acquisitions, private equity, investment banking, and capital market products.
They cater to corporates, individual and Institutional clients with their full suite of products and services.
IDBI Capital continuously raises the level of their standards so they can be among the top ranks in all business lines with an international presence. Customer satisfaction is what keeps them committed, focused, and passionate as they serve with integrity.
They work together as they want to be the most preferred calling point for all their business lines, they are a customer-centric team that maintains transparency, integrity, and responsibility that will drive them towards their vision. This will cause them to have an international presence.
They plan to promote innovation and teamwork as they drive their business seamlessly with commitment and passion towards customers.
IDBI Capital also plans to make their mark on the international front in all their business lines as they improve processes and systems and deliver superior value to customers and hope they will be delighted with great service.
IKM Investor services Ltd.
IKM Investor services Ltd. It is a proprietary trading company that was founded in 1961 and specializes in market-neutral trading and arbitrage trading. They are trading members of various commodities, currency exchanges, and Indian stocks.
IKM is now a leading broking and financing company and it is managed by three directors.
IKM is not seeking any new clients or investors at, this time.
IKM employs 201- 500 persons as a Sole Proprietorship trading company
Their headquarters can be found in New Delhi, Delhi
India Advantage Securities Ltd
India Advantage Securities Ltd. It is a service provider in Mumbai, for equities services, derivatives services, and commodities services.
New possibilities for the participation of investors and traders have emerged in Commodities. They have recognized that commodities hold a wide range of unexpected opportunity to evade business risks, and still provides attractive trading and investment prospects for traders as well as investors.
In this firm, individuals are focused, committed, and part of an empowered team, that adds value to achieve goals with honesty and integrity to enable continuous growth.
They are located at Om Plaza, Vasanji Lalji Road Opp. Kandivli Station, Kandivli (West), Kandivali West. Mumbai-400067, Maharashtra, India
Jaypee Capital Services Ltd.
A firm that has been moving towards infiltrating new markets and regulatory environments as they take steps to become a global securities firm. Their services presently include securities broking, currency broking, financial advisory services, depository custodial services, and corporations, and institutional investors in Indian and Global Markets. They are presently in the US which is the oldest market in the world, and this has given them the foresight to prepare for exploiting the market challenges and opportunities in the future. The Company has been known to think and execute big.
Jaypee Capital Services Ltd. was founded in 1994, offers Financial Services such as Commodity Markets, Equity Markets, Derivatives, Equity Research, client management, and Financial Markets and employs 201 to 500 employees.
It is a privately held firm and its headquarters are, located in New Delhi.
Kumar Share Brokers Limited
KSBL Securities Limited is professionally managed and provides single window convenience for all financial services. They are a member of the National Stock Exchange, Bombay Stock Exchange, Sebi approved portfolio manager through a network of branches and associates and Depository Participant of Central Depository Services. They offer futures trading in commodity derivatives and Multi Commodity Exchange and National Commodities and Derivatives Exchange; they also have an academy for financial learning- Kumar Academy of Financial Management (KAFM) they offer long term and short-term courses to accommodate persons from all different backgrounds.
They offer currency futures trading through membership with MCX Stock Exchange (MCX-SX) and United Stock Exchange, through their fully owned subsidiary company KSBL Commodity Brokers Private Ltd.
They plan to satisfy their clients and associates by informing them about the future.
They are located at G-55, 53rd Floor, Royal Palace Vikas Marg.
Laxmi Nagar Delhi 110 09
Mansukh Securities & Finance Ltd
Takes care of the investment and trading needs of their clients, Corporates and Business Partners HNI’s, etc. You can choose your pick from the various Trading and Investment solutions customized to fit with your needs. Their offices are, located in more than 100 cities across India, serving the investment needs of the many clients they have on their database.
You can open an account with them and get access to their mobile trading application today.
The Address: Mansukh House, Plot No. 6 Opp. Mother Dairy Plant,
Patparganj Road, Panday Nagar, Delhi 110092
Raptor Trading Group
Raptor Trading Group (Raptor’s) was founded in 2003 and they are the leaders in Multi-Asset Trading Solutions and the provision of Trading Connectivity.
Raptor’s Trading Systems’ solutions are used Globally by their clients. However, the core client’s focus is given to these firms, Hedge Fund Trading, Buy-Side, Sell-Side, Custodial Services, Portfolio Management, and Proprietary Trading.
Raptors’ unique ability to integrate with most major systems causes it to be an ideal solution that can be quickly implemented with a small cost and less disruption to clients.
The client needs to come first for Raptor and no solution is too complex to be used.
SMC Global was founded in India, in 1990, it is a leading and very diversified financial services companies in India. SMC offers services across brokerage (commodities and currency, across asset classes of equities including cash and derivatives) research, investment banking, financing, depository services, insurance broking, and clearing services and wealth management, real estate advisory services to corporate, high net worth individuals, and other retail clients and distribution of Third-party financial products.
You can become an SMC business partner who achieves goals and win awards and you’ll always have easy access to your portfolio.
TransMarket Group L.L.C
TransMarket Group L.L.C was founded in 1980, it is a privately held company global markets trading firm. They have been successful in trading by using their unique talent and the use of next-generation technology to capture opportunities around the globe and do risk management in Financial markets. Their business has been developed with discipline, hard work, and patience. They are constantly learning, and they relentlessly improve their expertise.
They hire on a rolling basis and they are constantly seeking new talent.
Trenchant Financial Technologies
Trenchant Financial Technologies India Private Ltd. (Trenchant) believes those in the financial sector makes the best living, they also believe in providing opportunities for the brightest minds in India, so they can make a good living just like the traders in the richest city in the world.
New York Stock Market is the largest and there are some of the best traders in India. Trenchant Financial technology is all about moving Wall Street Trading to India.
They will be providing support for world-class trading software, their programmers now provide support for world-class trading software.
Trenchant financial technologies Pvt ltd Chennai address is Block 7, Mount Poonamalle High Rd, Manapakkam, Chennai, Tamil Nadu 600089, India.
Banking Relationships and Prop Trading
A bank is just a company that is able to help other businesses to raise their financial capital, manage financial risks, and deal with foreign currency exchanges. Originally, trading has always be thought of to be with big banks, simply because they have to market to who they are providing services to. So, if a company decides to sell stocks using a certain bank, then whoever had purchased the stocks first are going to have issues when it comes to selling these shares to individual people if those people do not know the company well. So, the bank will then purchase the shares and then look for buyers. This helps to give market liquidity. A bank does not worry about the share value, they only care if they are able to sell stocks at higher prices than what they purchased it at. In order to do something like this, investment banks will have trader employees. The traders will start to think up strategies inside of the system to bring in more profit besides just providing liquidity. It was because of this that proprietary trading was created and become a big thing.
Prop trading really evolved when banks started reaching points where they had to employ multiple traders who only had the job of trading, and hopes of higher profits. It was these jobs that were considered to be internal hedge funds inside of the bank, which was handled away from average trading. A proprietary desk would often have high-risk value. Banks like Merrill Lynch, Goldman Sachs, and Deutsche Bank earned most of their profits and even losses from prop trading.
Certain regulations required that these prop trading desks be kept away from client activity as well as trading and this was done by using Chinese Walls, or a barrier that stopped the outflow of information. This prevented there from being any issues.
However, because of newer regulations such as the Volcker Rule, a lot of banks have shut down the proprietary trading desk. Yet, proprietary trading has not died out, it is just done within specialized hedge funds and trading firms. The trading done within firms is often done using specialized technology that uses very complex algorithms and quantitative models.
Prop Trading Strategy
Arbitrage is the biggest strategy that will be used in trading and normally it is used by banks. Basically, this is where a bank will take advantage of any discrepancies of pricing through sales or purchases of certain securities in order to create market-neutral profits. This particular trade will deal with risks like operational risks and even settlement risks. There are often a lot of different banks that will watch for these types of opportunities.
There are no 1 or more trading strategies when we talk about prop companies. Each trader has its own strategy.
One of the interesting facts is that there are different types of arbitrage but the most common one is merger or risk arbitrage. This started during the 1980s. This is when one company decides to purchase another company, and then the price of shares for the purchaser drop, and the price of shares for the other company will increase. Whenever the bank feels that a company buyout will happen, it will sell off any short shares left from the purchaser and then will purchase shares of a purchased company.
Large Bank Prop Trading
When a bank has client issues and there is a risk to the money of the investors, often times the trading desk will fall, similar to what took place during the 2008 financial crisis, is what has caused prop trading to decline.
The traders at these desks will often have a lot of education and trading experience. Computer programmers and even mathematicians are some of the traders that are wanted, even with automated strategies try to find market inefficiencies being a main part of trading now. The math or computer-based trading also called quantitative trading is actually growing and now a computer can complete tasks just more efficiently and faster than a human.
The prop traders for banks will be an employee of that bank, and will often have large salaries due to the fact that they are able to handle large capital amounts. Whenever a trader has great performance, then a bonus is often given. However, now that there are not a lot of prop trading jobs open, this is not something that most people will have experience in. Yet, the smaller businesses that are easily accessible are best for those who are looking to make a career out of trading within the market.
There are a lot of companies that will train new traders all about how the market works. The training quality that is provided will be different based on the company. Some will provide a new trader with specific strategies to be followed, while another may will not teach you any strategies and will expect the trader to make their own strategies that will be profitable. If a person is not that experienced and wants to work at a prop trading firm, then they need to ask about the type of training and if they provide any strategies. A new trader can progress much quicker if there is high-quality training.
The main point of proprietary trading is for a business to take their money and then turn it into even more money. So, these companies will provide a trader with capital and if money is made, then they will get money as well. However, there are some businesses that will only provide capital for day trading and this could be millions. Then there are some companies that will have the trader add their money as well. This can help the company to lower risks as that capital may be helping to handle losses that a trader may end up with. A trader who has a strong history and plenty of experience may not have to add their money. In general, a prop trading company will provide an increase in the capital than a trader would have access too. This provides a chance for the trader to have a steady income from trading.
Many small prop trading companies will not have salary pay. A trader will receive pay that is based on how they perform. They are not considered to be an employee and they are just contracted labor that is used to trade capital.
When it comes to how a trader like this is paid, they will get a certain amount of percentage of the profits that have been made. This could range from 100% all the way down to 50% of what comes from the market during the month. If a company only pays 50% of the profits will often have a cheap trading fee. A company that is paying 100% is making profits in other places and this is often paid through commissions and then charging you a fee in order to use the trading floor and capital.
Remember, the percentage of payout is not the only part that will need to be considered when it comes to picking a prop trading company. The increased fees may cause it to be difficult to create a profit, so a company that has low fees will allow an easier profit, and that means that up to 75% is going to profitable, unlike 100%.
Based on this model, months could pass by before traders would get a paycheck. It will take a lot of time to be profitable. The company can also provide a lot of capital but only after smaller amounts are used. There are only a handful of proprietary companies that will hire a trader to be employed and will provide salary pay until profits are made. The traders may also have to sign contracts that will keep them from taking the salary pay and then deciding to leave when profits start coming in.
Remote Trading or Floor Trading
Evan we talk about proprietary trading companies in India or the USA or proprietary trading firms in Bangalore or any spot on this planet, it is a good thing that in the last several years a lot of traders become remote traders who trade forex, stocks, or options from home.
Originally these trading companies were located within a physical office, but due to the updated infrastructure, it is very common for a prop trader to work at home. These people called remote traders and they are able to be at home and are often very experienced and have a long history as well as experience with risk control as well as discipline. When a person remote trades the trader may need to have a deposit to balance a loss that could happen because of system failures.
However, when a trader is floor trading there is less of a risk for companies due to the traders being physically monitored. Therefore, if there is a hardware or software failure there will be several people there to handle the issue.
A big benefit of prop trading is going to be the profits. For instance, when a person is a broker and they get a commission while the company gets 100% profits from the trading. When a person is a prop trader, the company or bank will often end up with maximum benefits that will come from these trades. Another type of benefit is businesses are able to stockpile securities that can be sold in the future. If a company purchases securities for the future, they can then sell the stocks to clients who will purchase these shares. The stocks can even be loaned to a client who wants to short sell.
A company can then become a main marker for the market. When a company only handles certain securities then it will be able to provide investors with liquidity. They can also purchase securities using their resources and eventually selling them off to investors during later dates. Yet, if the company purchases them in large quantities and over time, they happen to be worthless, then the company will have to handle internal losses. The company will only benefit if the security prices increase or if people purchase them at higher costs.
A prop trader can also have access to certain technology as well as specialized automated software. These trading platforms allow a trader to have access to various markets and even allow them to engage and process high-frequency trades. The trader can even develop a specific idea and then test it out as well as run demos on a computer. When it comes to a proprietary company, the trading platform will often be used in-house and only traders will use this. The company will then get all the benefits from having this software which is what a retail trader is lacking.
Proprietary trading is a really exciting field. These prop traders will be given capital that they can use to trade with just to help make solid returns on a daily basis. A trader that is on salary and positions like this will be hard to find and will often require a person to have a high education level as well as an extensive trading history that has been quite profitable. There are often many proprietary firms that can be found all around the globe and before joining, research should be done to learn the training programs and pay structure to gain high levels of success.
Prop trading firms in India are not different than any other prop company in the USA. Platforms, organization structures are the same. Only the capital can be a problem…