00:33:56 · John Coogan
[00:33:56] S0: So Bloomberg had a breakdown of this back in December fifteenth of last year, and it's fascinating. Somehow somehow we missed it at the time. I'm I'm so glad it exists because they did some they did some great journalism here To kind of show you the full picture of what's going on, we can read through a little bit of this. First, let me tell you about CrowdStrike. Your business is AI. Their business is securing it. CrowdStrike secures AI and stops breaches. So Bloomberg says the pitch is enticing. Learn to trade like a Wall Street master of the universe. Pay a fee, typically starting below a $100, just $99 maybe, and manage thousands in fictional funds in simulated markets for stocks, currencies, or commodities. If you stick to the strict rules and meet your profit target, you can become a funded trader for the firm. That means you could receive payouts as of of... As as much of 90% of the ersatz profits you make. If you fail, you can keep trying by paying the fee again. More than 400 companies offer forms of these challenges up from about 10 just five years ago, according to FPFX Technologies, a Florida based software provider for the industry. So there's actually a SaaS company that's powering all of these different, like, prop firms that do the simulated trading because, of course, you need to take real market data and then create a a front end for the end customer, and they are effectively reselling a skinned version of that software, which is fascinating. Three of the biggest are FTMO Group, Funding Funding Pips Corp, and Alpha Capital Group. That's a great name. Alpha. You wanna go with Alpha Capital. That sounds serious. They have about 6,000,000 customers collectively. Personally,
00:35:47 · Jordi Hays, John Coogan, Jared Allen
[00:35:47] S2: would choose Sigma. Sigma. [00:35:49] S0: Two Sigma. No. Just Just one sigma. [00:35:52] S1: Lone sigma. [00:35:52] S0: That is the problem. If you've been following the drama two sigma, it makes sense because you never wanna start a firm with two sigmas. It's impossible. They're boring. You know this. Right? They're actually boring. The founders of two sigma are for for... Are two lone wolves that never works out. An alpha and a sigma, an alpha and a beta, but never two sigmas. That's not going to work. So, they do actually disclose that the trading is simulated. The companies describe what they offer as proprietary or prop trading, a finance term for managing a firm's own capital. Quote, Enhance your skills with modern prop trading firm. FTMO's website says, manage a trading account a trading account of significant size without risking your hard earned money, Funding Pip says. A global leader [00:36:41] S2: That's in such such a crazy Pip. Crazy. Crazy.
00:36:45 · John Coogan
[00:36:45] S0: Some customers complain that they've paid high fees while the chances of winning rewards are slim. Only 4% of users get any payout based on their trading according to f... According to FPFX. In social media posts, people describe themselves as prop firm customers claim to have lost thousands on fees. So, they've done these $100 a month challenges, a couple of them for a full year, and they never got a payout because they never won the challenge because it's very hard if you're just an average stay at home trader. What was your stay at home day trader? One of them, Sameem Sharif, 28, an accountant from London, estimates he's paid about $10,000 to simulated trading firm Pip Farm since last year. When you have a bad streak, it's easy to think, I'll just buy one more. Before you know, you've racked up a lot in losses. Sharif says he's lost trading challenges because the rules are so strict. Simulated trading customers are paid only if they adhere to certain conditions, which the companies say they spell out in advance. They vary from firm to firm, but most of them stipulate a profit target, daily loss limits, a minimum number of trading days, and leverage restrictions. Some require profits to be earned consistently rather than in one large trade. Trading around news events can be banned, and many don't allow positions to be held over weekends. PipFarm says Sharif failed dozens of challenges by exceeding the amount of losses a trader can sustain in a day. A pip is a price move in foreign exchange trading for for reference. When he eventually passed the hurdle, the company introduced a 1% risk per trade limit for him, he and the company say. That means a customer can't risk more than 1% of his capital in a single transaction. The company calls it a standard industry practice for traders with an unsustainable approach, a restriction Sharif says is unfair. Sharif and PipFarm say the company recently committed to making some payouts based on his successful trades. So you can't just find one stock, bet it, and win. You have to be diversified into over 100 positions, potentially, to actually deploy all your capital, I guess. Adam Khalil, a former operations employee at Singapore based PipFarm, says the majority of users breach the rules and end up repeatedly paying sign up fees. People lose one time.
00:39:08 · John Coogan, Jordi Hays
They want to make the money back, so they buy another challenge, he says. So this is the I blew my account. Like, you zeroed your account. You you lost your $100. You gotta buy back in. It's like a casino with a with a ticket at at the door or something. It's crazy. [00:39:24] S2: It's so it's so fascinating. [00:39:28] S0: Okay. [00:39:28] S2: Yeah. Like, why would you just not [00:39:31] S0: Dollar cost average into the Russell 2,000? [00:39:35] S2: No. Why would you just not take the money? Why why why... I mean, I I understand it. [00:39:40] S0: It's because they The sold the dream [00:39:42] S2: dream of [00:39:43] S0: of you will be given a $100,000 to manage, and you could five x that, and we will give you a portion of those profits, and you could win $400,000. [00:39:52] S2: So [00:39:52] S0: the the pitch is definitely a $100 to try this. If you're good, you could make a $100,000 very quickly. [00:40:02] S2: Needless to say, all of these businesses should be banned from operating in their current form.
00:40:02 · Jordi Hays, John Coogan
[00:40:02] S2: Needless to say, all of these businesses should be banned from operating in their current form. [00:40:09] S0: Channeling the soccer and jetty deep down. No. It it seems rough at the very least, like, stronger FTC regulation around, like, how these are marketed, all the influencer workflows that are happening. Because it's very clear that the info products lead you to a sign up form that has a referral fee attached to it. So Yeah. So they will go put out those viral videos that are bleak, then it's it's buy my free trading course, then it becomes sign up. For this particular prop firm, I get $40 when you go in the door. And so lots of lots of odd stuff going on. Anyway, let me tell you about Shopify. Shopify is a commerce platform that grows with your business and lets you sell insights online, in store, on mobile, on social, on marketplaces, and now with AI agents. What's going on at the top of the App Store, Jordi? I know you watch the top of the App Store like a hawk. [00:41:01] S2: New camera called Chromograph Okay. Camera. Is it good? Rocketed to the top. [00:41:06] S0: Seems like it must be good. [00:41:07] S2: Created by Ryan Johnson. [00:41:10] S0: Oh, that's amazing. Yeah. [00:41:11] S2: He said, I recently badgered my cinematographer, Steve Yedlin, into making my ideal iPhone still camera app. It shoots raw, bypasses the iPhone's look processing, and instead uses the same image processing we use on our movies. Went super viral. Cool. This thing is, like, clearly printing. I think it's $13 to download it.
00:41:11 · Jordi Hays, John Coogan
[00:41:11] S2: He said, I recently badgered my cinematographer, Steve Yedlin, into making my ideal iPhone still camera app. It shoots raw, bypasses the iPhone's look processing, and instead uses the same image processing we use on our movies. Went super viral. Cool. This thing is, like, clearly printing. I think it's $13 to download it. [00:41:32] S0: Oh. Didn't pick this up. This looks pretty attractive. [00:41:35] S2: I picked it up. I haven't really been able to [00:41:37] S0: Okay. [00:41:38] S2: Properly use it yet. But... [00:41:40] S0: No. I've I've been really excited about the the the the prospect of taking raw photos with the iPhone camera and then having a different way to manipulate them, potentially some AI in there, but not AI image generation, like AI fine tuning all the knobs of, like, contrast and levels and color grading and all of that stuff. I don't know how much it does that. Yeah. There's some of the photos here from Brendan Hodges you can pull up. I took the app for a test run. Looks great to me. I I think these are cool. [00:42:12] S2: Yeah. It ends up looking like it was taken on a on a on a...