Institute Trader Benefits
What advantages are there to joining the Institute as an Institute Trader rather than going it alone?
1. Brokerage with No Conflict of Interest
Zero Percent Rebate Agreements; – By simply operating within the Institute community you will be exposed to the best brokerage services globally available to Retail Traders and operate in an environment with no conflict of interest. At the Institute we run a large community of independent Retail Traders globally. The Brokers that we contract have to abide by the contracts we ask them to sign and not the other way around. This means they must eliminate all conflict of interest between the Institute Community and the Brokerage Company itself. This includes signing “Zero Percent Rebate Agreements” meaning that the Institute receives no commission or spread rebates from Brokers that we use anywhere in the world. We do this purposefully to eliminate the main conflict of interest which is so prevalent in the Trading Education industry.
From our own industry research we have found that 95% of self-proclaimed “Trading Educators” and “Trading Education” companies possess what are termed as “Introducing Broker Agreements” with their “Preferred Retail Brokers.” Typically “Trading Educators” that have these contracts in place receive between 25%-50% rebates on all commissions and spreads that their students pay to their “Preferred Brokers” when trading. Commission and Spread Rebates are paid from the Retail Brokers back to the Trading Educators typically on a monthly basis. This means conflict of interest is prevalent. Both the Broker AND the “Trading Educator” in this instance maximize their revenues by “steering” / “forcing” / “teaching” their “students” / to trade as frequently as possible and in the largest volume possible. Therefore they are incentivized to ensure that their clients / introductions are taught so called “Trading Strategies” that ensure their students trade as frequently as possible in the largest size (volume) possible. The Brokers and the Educators are essentially working together to maximize commission and spread revenues for themselves. Unless a Trading Educator can show you a “Zero Percent Rebate Agreement” with their “Preferred Broker,” meaning they can prove to you that they are not incentivized by commission or spread rebates, you must assume they are getting paid by the Broker.
All of the Institutes contracts with the Brokers we use are available to view on online in the Accounts Section of the Institute website https://www.itpm.com/trading-accounts/ – You will find that all of our contracts are either “Zero Percent Rebate” or the student is compensated back a percentage of the commission that they pay the Broker each month. The Institute receives literally zero in return for introducing a student to a Brokerage platform. We purposefully force Brokers to write “zero” in the contract so Conflict of Interest is eliminated.
Introducing Broker Agreements are so prevalent in the Trading Education Industry it is almost impossible to avoid them and avoid an “Educator” without this conflict of interest. These self-proclaimed “Educators” don’t teach you how to trade properly. They teach you how to pay them regularly! They will manipulate you from start to finish to suit their own objective of maximizing commission and spread revenues.
At the Institute we eliminate this conflict of interest by making our Brokers sign “Zero Percent Rebate Agreements.” We do not work with any Broker globally unless they do this. Details of our contracts are available for download at the Accounts Section of the Institute website. We make our contracts public because we have purposefully eliminated this conflict of interest and have nothing to hide. Can your current Trading “Educator” same the same? https://www.itpm.com/trading-accounts/
OTC Hedging Requirements; – When dealing on a Retail Brokerage trading platform (in all geographies globally) Brokers deal in Over The Counter (OTC) derivative contracts. The price of these contracts is derived from the price of the real underlying asset in the market. The price you see on the screen (Brokers Platform) is the price of a derivative contract (derived) not necessarily the price of the real underlying instrument. So for example with Contracts for Difference (CFD) in the UK, Europe and Asia, Australia, New Zealand and South Africa, if we wanted to purchase “Apple stock” (AAPL) on the Brokers platform on CFD, we wouldn’t actually be buying Apple stock. We would be buying a contract directly from the Broker and the price of this contract is supposed to exactly mirror the price of Apple stock (AAPL). The Broker in order to make this transaction occur provides liquidity to the client by shorting the contract to the client. This means the Broker now has an equal and opposite position to the client. The Broker now has two choices. Either hedge the position by purchasing the real (physical) stock in Apple in the underlying market or to not hedge it and to run the position against the client. This mechanism clearly creates a conflict of interest in that it is in the Brokers interest that the client loses. Additionally the spreads of derivative contracts like CFD’s are much larger than the real market spread.
In the United States and Canada this is less common in the large cap stock market (equities) instruments. Typically in the U.S. and Canada, OTC transactions only occur in mid cap (less than $5Bln market cap) and small cap stocks (less than $1Bln market cap) when trading cash equities. However in the options market the vast majority of options contracts / prices made, even on listed options in large caps are OTC contracts / prices on the broker’s platforms. This is exactly the same mechanism as our CFD example above, just with a different instrument (Options). Therefore, the same conflict of interest exists in the U.S. and Canada as it does in the U.K. Europe and Asia Pacific.
At the Institute we purposefully eliminate this conflict of interest ensuring that the Broker is required to hedge all Over The Counter (OTC) exposures i.e. they are not taking the other side of Institute Traders trades / positions without hedging out the exposure AND allowing the Institute access to all Institute Traders data on their platform in real time via a single log in. This ensures that the Institute Community and therefore all Institute Traders are protected from Brokerage companies that are incentivized to make Retail Traders lose money. We do this very simply by only offering our corporate contracts to Brokers that already implement firmwide hedging of OTC transactions as company policy. The Institute does not even offer contracts to Brokers that do not have this rule implemented by default as a firmwide policy. Brokers that hedge all OTC positions globally as a firmwide policy are in the significant minority globally. Institute Traders are protected by the Institute and this policy as we eliminate conflict of interest from the Brokers on ALL OTC transactions so our traders globally are safe in the knowledge that the Broker is not incentivized for them to lose. Within the Institutes infrastructure, whether an Institute Trader makes or loses money on a Retail Brokers platform makes no difference to the Broker themselves because they hedge their exposures automatically and can therefore not make or lose themselves on a position taken by an Institute Trader. This means the Broker is less likely to “misprice” or “misquote” instruments, they are less likely to have “technology problems” with their platforms when traders want to execute and they are less likely to go “stop hunting” on derivative contracts when the underlying instrument never trades at the traders stop. This policy eliminates greed and eliminates asymmetric risk in favor of the Broker and increases the probability that you as a Retail Trader will become consistently profitable over the long term.
Economies of Scale;– Due to the very nature of our business and the size of the Institute community, the Institute holds a lot of consumer power over Brokerage companies. Community Size definitely matters! This gives the Institute a great advantage with the Economies of Scale we possess. This becomes particularly relevant when we see that the Brokers are doing things they shouldn’t be doing. We have full “Read Only” access to all Institute Traders accounts and can see all the data of all Institute Traders in real time on a “Read Only” basis. Our team of experienced risk managers and data analysts can spot intentional Broker discrepancies whilst they happen in real time. Bad Broker behavior is punished at the Institute. Institute Traders are alerted to issues by our back office and simply close their accounts and move to another Broker on a wholesale basis if bad Broker behaviors are identified and not remedied immediately. We also close our own positions and trading accounts and pull money out of our own Brokerage company accounts in these circumstances. The Brokers know that this is always a prevalent threat to their business, so Institute Traders business is prioritized by the Broker.
Institute Traders as a Community are treated at the same level as Institutional Investors / Traders (Investment Banks, Hedge Funds and Pension Funds) by our contracted Retail Brokerage companies because we are a Corporation / Corporate Client of the Brokers ourselves and you as an Institute Trader, trading as part of our Corporate infrastructure are treated as a trader at the Corporation i.e. not in the same way as a random Retail Trader that just happened to open an account with the same Broker. Additionally the Institutes combined pooled Equity is extremely large by any Retail Trading platform standards. Our Brokers bend over backwards to do business with us because they do not want to lose our trading accounts. Every Institute Trader leverages off this infrastructure on a regular basis especially when they want to get something done quickly or get something done that may be out of the ordinary by contacting our back office.
2. 24 Hour Platform Support from Anywhere in the world.
As an Institute Trader wherever you are located globally you can contact your own independent back office support desk at the Institute 24 hours a day, whenever you are experiencing platform issues. Our experienced team of risk managers and traders will help you structure your trades, access instruments if you cannot find them, place your trades and open and manage cases on your behalf with the Broker if there are numerical discrepancies in your trading account. You will have a fully dedicated team behind you that are incentivized to ensure you maximize your P/L and stand the best chance of making money consistently over the long term.
3. Risk Monitoring and Interventions
Professional Traders at Hedge Funds and Investment Banks have Risk Managers that oversee firmwide and individual traders risk in real time. Unfortunately in the Retail Trading world you don’t have this safety-net. Until now! At the Institute, we access Institute Traders trading data on a “Read Only” basis, in real time several times per day. Our back office monitors everything that every trader in the Institute Community is doing and we aim to protect your downside. If we see you implementing our teachings poorly and doing things that we did not teach you to do in the PTM and PFTM Video Series’ we will implement an intervention. Interventions occur if you are struggling to implement the teachings of our educational Video Series’ and they are designed to stop you making any of the stupid mistakes that Retail Traders typically make and to stop you “blowing up” your trading account. These processes must be in place in order to help Amateur / Retail Traders that are still learning and beginning on their journey to consistent profitability to see where they might be going wrong and to protect their downside.
Please Note: Interventions differ significantly from our Three Month Trader Mentoring Programmes. Interventions cover only risk management if you are struggling, losing money and stalling / struggling to get into positive territory. Interventions on the whole provide the Institute Community with a “safety net.” This also ensures that the downside to the aggregate statistics of the community as a whole are protected AND each individual is protected.
4. Independent Track Record Verification and Confirmation by the Institute
At the Institute we manage your Track Record for you. The cost of doing this independently yourself with an auditor on an annual basis would run into the tens of thousands of dollars. At the Institute we do this for you for free, just for being part of the Institute Community as an Institute Trader. On request, you receive a comprehensive Monthly report with all relevant details of your trading performance in a Professional format. Your performance is measured in the same way as a Professional Hedge Fund Manager as a risk adjusted performance with an in depth statistical analysis. Your performance is also compared to the Hedge Fund Return Index (HFRI). Each Month your Track Record will be independently audited by us and sent to you on email for you to keep. We also keep this on record so if you ever lose your track record, you can message us and we can provide you with all the necessary documentation. Additionally if you ever apply for jobs within the Industry at Hedge Funds, Investment Banks or Proprietary Trading firms, the Institute acts as your third party auditor / verification source for your Track Record and we will confirm with your new employer with references that your Track Record is 100% legitimate. This is an extremely valuable resource for all Institute Traders.
5. Community Intelligence
The Institute has hundreds of Institute Traders globally from all different walks of life, all from different levels of the traditional education system, different ages, races, genders life objectives, hopes and goals. However one thing unites everyone within the Institute community and that is a desire to conquer the financial markets by becoming consistently profitable and good at trading. The diversity of individuals within our global community of traders is key to this. The level of educational knowledge required to become an Institute Trader and diversity of our community ensures that we always have a well-educated and well informed community and everyone brings something different to the table. This eliminates group think and consensus positioning in Institute Portfolios and across the community. Everyone in the community is self-reliant and contributes back to the community.
By being part of this Community, Institute Traders can leverage off the intelligence of the Community as long as they are participating in the Community and adding value back to the Community. As an Institute Trader you will be communicating with high level educated Retail Traders from around the world and will be able to build a network of likeminded and similarly talented individuals with the common goal of standing the best chance of or maintaining consistent profitability. Once you pass your PTM Exam and you have opened your trading account to become an Institute Trader, and you will be assessed by our back office over a three-month probationary period (60 trading days) as part of a due diligence process. This is so that we can assess your potential contribution to the Institute Community and is a qualification process to maintain the quality of the Institute Community. Institute Traders do not get automatic access to the Institute Community and must prove that they are motivated to actually self-implementing what they have learnt in our education with real money. This is so we avoid Community “leeches” / “bottom feeders” who think that once they become an Institute Trader they can join the community, not contribute back to the community and “leech” / “bottom feed” off experienced traders for ideas and trades in order to make easy money. This policy also protects our talented traders and Community as a whole from group think and consensus positioning. You will be shown how this qualification process works once your account application to Become an Institute Trader is successful and you have funded your account. Once you have proven that you are self-implementing, you will then be invited to the Institute Community of traders. Once you are on the other side, you will be able to communicate with other Institute Traders. If after the 60 days due diligence period you have not qualified for Institute Community access, you will be contacted and told why. You will then be assessed on a rolling 60 days period basis until you qualify.
Students on the Institutes Three Month Trader Mentoring Programme automatically qualify for Institute Community access because they are in continuous contact with our Senior Trading Mentors. They have fully committed to implementation with a Mentor over a 60-day period. Therefore they receive instant Community access.
At the Institute, we also hold regular social meetings / engagements in each of our geographical locations around the world organized by regional captains / chapter heads who kindly volunteer to get the local community of Institute Traders together. As an Institute Trader you will meet in person other Institute Traders in your local region on a regular basis and globally if you choose to do so. Being plugged into this network is a major advantage that Institute Traders have relative to other / regular Retail Traders globally.
6. Institute Capital on Power of Attorney (POA)
The Institute provides capital on Power of Attorney (POA) contract to some of its most successful Institute Traders that have the objective to do so and once they have proven themselves within the Institutes Infrastructure to be consistently profitable. If you want to trade with the Institutes capital see the FAQ Document “Institute Online Educational Courses” and the question “My objective is to trade with Institute money at the Institute. How does this work? How can the Institute help me with this after I purchase the online PTM and / or PFTM courses?” for more information.
As an Institute Trader, you will have access to the Institutes capital once you have proven to become consistently profitable using your own capital. If this is your objective, then you will be invited on Power of Attorney (POA) to trade Institute Capital and you will be able to charge us a Quarterly Performance Fee of 25% on your profits. Access to Institute capital is one of the major advantages of becoming an Institute Trader.
7. Hedge Fund Placement
The Institute places some it’s most successful Institute Traders (if they have the objective to do so) at leading and up and coming Hedge Funds globally. This happens once an Institute Trader has proven themselves within the Institutes Infrastructure to be consistently profitable over a minimum 9-12 month period and if your objective is to seek employment at a Hedge Fund. At the Institute, we have access to over 600 Hedge Funds on speed dial and over 30 live contracts with Hedge Funds globally to refer talented traders on a consultancy basis. If your career objective is to eventually become a Professional Trader at a Hedge Fund see the see the FAQ Document “Institute Online Educational Courses” and the question “My objective is to become a Professional Trader at either a Hedge Fund or an Investment Bank. How does this work?” for more information.
8. Application to Become an Institute Trader
Above are just a few of the main advantages that Institute Traders have when joining the Institute as an Institute Trader. There are many more hidden advantages that are not necessarily immediately tangible. If you want to know more, please go to the accounts section of the Institute website and as long you have passed your PTM and / or PFTM examination(s) you can apply to become an Institute Trader https://www.itpm.com/trading-accounts/
Additionally in the Application stage you will be provided with an account manager that will help you through the completion of the paperwork for your brokerage account so that the process takes a shorter amount of time and to avoid any mistakes occurring.