Proprietary trading is a term used to describe the activity of a firm where its traders actively deal with financial instruments with its own money to make profits. There is minimum customers` involvement and so commission-based income from trading is marginal. Proprietary trading groups or firms as such are organizations whereby its owners, employees and/or contractors trade in the name of accounts owned by the group. They exclusively use the funds of the group for all of their trading activity.

Most established proprietary trading groups and firms can be accessed through the proprietary trading firm directory. Examples of the top proprietary trading firms are the Fisher Proprietary Trading Group, RBC Proprietary Trading Group, Goldman Sachs Proprietary Trading ,WTS Proprietary Trading Group, Assent Proprietary Trading, GMP Proprietary Trading, JP Morgan Proprietary Trading, Madoff Proprietary Trading, Proprietary Trading Llc, Quantitative Propriety Trading, TJM Proprietary Trading and Tudor Proprietary Trading. Investment Banks are also involved in proprietary trading. In fact, most of the largest investment banks make the bulk of their profits from trading activities. Examples of banks that are involved are Barclays Proprietary Trading and Deutsche Bank Proprietary Trading.

Proprietary trading groups and firms trade in the more common financial instruments such as stocks, options, bonds, futures contracts, options, commodities and currencies. They derive profits from the market more than from commissions or fees. Even though they have high risk appetite, proprietary trading groups and firms have a preference for day trading. This is so because proprietary trading groups and firms do not want unnecessary exposure as the risk of holding a position overnight can be high. They fear that the opening price for the next day may change significantly from the previous day`s closing price.

For those interested in setting up their own proprietary trading firms, they can get professional advice from many industry consultants and investment banks. These days they can also access `ready to go` trading rooms with confidentiality, support staff, systems and security for a quick start-up. The process is not too cumbersome. After forming a LLC with likeminded- financiers as partners, they can raise hard capital through shares and promissory notes. This money will act as the operating capital for them to begin trading.