Actually, that's not true. If you are a licensed professional trader, you have to pay professional data fees. If you have a 1,000 guys in one room, all 1,000 guys must pay the data fees. You can't pay it one time and distribute it to 1,000 traders. It does not work that way.
For example, core market data fees are about $10,000 a month for US Equities, then the per-user fees are roughly $200 a month additional (NYSE $125, AMEX $30, ANSDAQ $50). There are no tiered volume discounts from the Exchanges. If you want to see quotes and trades for Options, Futures and Indices add the burden of incremental and similarly significant costs for redistribution and usage, with more core market data Exchange charges and per-user monthly fees. When you add International Exchanges, then you're talking more and more moolah. Then there's news, etc...get the picture?
Just remember guys, look at the whole picture. Just the tax benefits alone (triple net, nof FICA, "one number reporting") will more than offset any data feed costs...and, at least with our guys, everyone gets free DDE links that can be used in Excel programs for data manipulation. As in any business, you pay for the tools you need to prosper. Don
IMO focusing on data fees, which are disguised as "Desk" or "Remote" fees is the wrong way to take accounting, since those are fixed costs that get rebated. Worry about commission structure first, and a support group in the form of good traders and a good atmosphere and the bottom line will take care of itself. I honestly believe that Bright is too expensive by today's commish standards if looked at from only a commish point of view, but it may not be when you take the whole picture into consideration. nitro
Hey Mr Don Does Bright allow options trading along with stock trading? I believe I never rec'd a response on that one. Thanks.
When I attended their 3-day intro, the response was that Bright discourages trading of options. The major advantage - leverage - is negated by the large leverage that Bright offers to traders. However, if you are able to answer some in-depth grilling about options to prove that you understand them inside and out, then they will let you trade options. From what Don said, there are only a few people that have "passed".
Here is the real reason. The margins suck on options. And most traders that trade them will never trade the same type of volume that they would with stock, especially if they are trading pairs. Bottom line is, Don's bottom line gets much fatter with churning of stock versus trading a few option contracts. This is why very few prop firms do options. Too much risk for too little reward from the firm's perspective.
Does Don qualify? No offense to any one individual, but this is absurd. There are option-traders at Goldman, Merrill, Citi, etc., that don't know gamma from vega, but Bright is selective? I can send a homeless individual to the LV office and he'll get $500k++ bp at $.0125/share if staked with $10k. The reason Don and Bob dissuade options trading? Inherently low volume. The churning biz model falls flat.
While there is probaly some truth to both of these statements, I strongly disagree that they don't like their traders trading options because the Bright principals want to churn their traders. I have traded options and equities for a long time and I have come to appreciate the advantages of both. The biggest problems with options in relation to trading the underlying directly is that when I want a 1:1 move in the options as I get in the underlying, I have to go with either 1) a deep in the money option, or 2) I have to do several ATM or OTM so that the delta's match. The problem with 1) is that the B/A spread on most of these options is at least .20 to .30. That means that you often give up a bigger spread than you want to, or you have to sit there forever and hope someone hits you, usually against momemtum. The problem with 2) is that while the B/A spread may be tight(er), there is no advantage to doing it over the underlying because when you are done matching the delta, you have used the same buying power than had you just done the underlying. In short, options traders trade options because they are multi-dimensional and offer than more than one way to profit (or lose to those that are of poor skill.) We have heard it from Don many times before as to his opinion (write or wrong) that options are meant to be sold, with the intent of capturing theta, and that in his opinion that is a game best left to people with killer commisions and no cancel fees on the floor of the exchanges. While we may disagree with that, there is no reason to believe that he is being dishonest when he says that. nitro