Don: Thanks for stepping up and putting the Bright name behind this topic. Of course this affects your bottom line, and i'm sure that is a reason why you're on here helping to promote these issues. But i also believe that you and Bob see a bigger picture. One that equates these problems to a day trading pandemic. These issues will put a lot of prop traders out of business in the next 6 months if something is not done soon. M22au: Don is absolutely correct. Try entering a sub penny order on a non OTC stock. I get the msg 'violates Reg NMS Sub-Penny Rule' How can you compete if you can't even play the game? Windycity69: You are correct. This has been going on for some time, just not to the extent we are now seeing though. My volume has dropped 85% from March-December '09 because i can no longer get fills. If you want the stock, you need to pay the spread. That's not a problem with ultra liquid stocks, but start trading stocks with .03-.05 spreads and that takes a big bite in to your bottom line. Munnyhunnny: You are also correct. These BD's all have a little slice of the SEC in their pockets. Changes may never come, but the fact the someone is trying to promote awareness is the first step. For that, all of the prop traders on this board should be thankful. -Carlos
I wouldn't worry about flash trading. the chances of GS front-running some small traders of a prop firm are slim to none. Flash trading is a problem for the big traders or firms acting on behalf of big clients. As a retail trader, I am more concerned about: 1. My broker front-runs my orders, 2. My broker routes my orders to market makers who pay the brokers money, 3. My broker charges hidden fees, 4. Dark pools that destroy market transparency and liquidity. I hope the website lists the true concerns of retail traders.
I agree with all your concerns about retail trading. Some of the reasons for joining a Firm. The routing is the biggest issue IMO. Most of our people trade in 500-5000 share lots, but the automated guys might so smaller size. FWIW, Don
If not for the license (exam, preparation for the exam, exam fee, etc.), a prop firm would be the first choice of retail traders. Nobody would put up with brokers' front-running and routing tricks. The license requirement should be dropped for joining a prop firm, a trader doesn't need a license to trade. That's another issue that should be listed on the website.
The appearance isn't the only problem. The text of the securities transaction tax (STT) bill is for H.R. 1068. That bill is apparently dead, having been reintroduced as H.R. 4191. I think everyone (certainly all traders) should be familiar with what this bill would do. The text isn't too hard to read and understand.
good stuff. Isnt Goldman Sachs involved in a lawsuit with sub penny ? jumping in before us ? any update on that case? on another note Don, is Sigma X still being used by your traders ?
not all prop firms require traders to take the S7. it depends on the firm's SRO whether or not the tests are required. there are several great firms that just require a clean u4/fingerprint card etc but on the other side the series 7 isn't that bad. 1. buy a study book and read it to get the basics down 2. take several practice tests 3. memorize the material/vocab 4. focus mainly on options as that is the bulk of the test 5. should take 2 weeks or so to study for! not big deal at all.
The damn series 7 helps to your trading as much as a knowledge of anatomy. The tax preparer, for instance in NY, does not have to be licensed but someone who risks his own money has to memorize tones of stuff he will forget the next day after the exam, not to mention paying big bucks for books and exam. Why not to license people who buy lottery tickets ?
I agree, but its not that big of a deal. if you really help need with the S7 then Google your city + insurance/securities tutoring. Here in Phoenix, AZ there are about 5 different tutor companies that will help you pass it. A 5 day crash course + books + questions and one should be able to pass in about 2 weeks.
wow, i can't believe bright sponsor's this crap. and by crap, i don't mean sub-pennying, by crap i mean blaming sub-pennying on high frequency traders (flash trading was the other one). this dennis dick, i'm sorry, but it's obvious he's been listening to a little too much cnbc and forgot to think critically, and looks like the rest of you at bright have forgotten to use your brains as well. you realize don, letting this dennis dick guy slam high frequency trading is going to do more damage than good right? what exactly is the point of throwing algorithmic trading under the bus here? you realize that the transaction tax is being pushed forward to counter alleged abuses by short term speculators of which the term 'high frequency trader' and 'algorithmic trading' is synonymous? so when you guys put out bullshit like this, jumping on the bandwagon of placing the blame on the shoulders of high frequency traders, you're really ATTACKING traders, NOT defending them. thanks for nothing! so what happens when the sec goes after high frequency traders who are using the tools marketed to them? what happens to the new automated pairs program that bright just launched? you do realize that automated pair's trading is high frequency trading right? is nobody at bright thinking about that one? you think regulators will be able to distinguish between hft's who play by the rules and the ones that don't? with all the bad press that algorithmic trading is getting, the answer: no they won't, and if it keeps up, we'll see legislation that will impact ALL of us: NEGATIVELY. you have a problem with sub-pennying? you have a problem with flash orders? go after the people who market them. go after the regulators who look the other way. better yet, actually get competitive instead of bitching like little girls and figure out how to get access to those tools. BUT DON'T demonize and place blame on the traders who use these tools, ESPECIALLY when you're categorically assoiciated with them and running the same strategies, it WILL come back to bite. case in point, the meeting by the sec on the 15th is about what? is it about flash orders? no. is it about sub-pennying? no. it's about discussing the evils of high frequency trading! high frequency trading = you make a lot of trades, more than likely using algorithms, but NOT NECESSARILY. how many traders can be lumped in under that definition? the answer: a lot of us! so stop with the cnbc sounbyte bullshit and actually stand up for traders instead of blaming them. because blaming them is exactly what you're doing with this feeble minded propaganda horseshit that is defendtrading.com.