Prop Shop

AAA

DEFINITION of 'Prop Shop'

A proprietary trading group that usually trades electronically at a physical facility. Prop shops supply their traders with the education and capital resources to engage in a large number of deals each day.

INVESTOPEDIA EXPLAINS 'Prop Shop'

The term "prop" is derived from a shortened form of proprietary. Prop shops are very similar to trading arcades. Both offer facilities where local traders can engage in electronic transactions and have access to the latest trading technology. However, there is a distinct difference in the trading operations between the two facilities. In a trading arcade, traders will transact for their own accounts. Prop shop traders trade for the firm's account using the shop's capital. By using the capital resources of the prop shop, traders gain access to more leverage than they would with an individual account.

RELATED TERMS
  1. No results found.
Related Articles
  1. Market Makers Vs. Electronic Communications ...
    Forex Education

    Market Makers Vs. Electronic Communications ...

  2. Direct Access Trading Systems
    Options & Futures

    Direct Access Trading Systems

  3. 10 Tips For Choosing An Online Broker
    Options & Futures

    10 Tips For Choosing An Online Broker

  4. The Global Electronic Stock Market
    Trading Systems & Software

    The Global Electronic Stock Market

comments powered by Disqus
Hot Definitions
  1. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  2. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  3. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  4. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  5. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  6. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
Trading Center