That firm was AllTech, a retail brokerage owned by Harvey Houtkin, FYI. In Atlanta, and I think it may have been 1998. Harvey quickly got out of the brokerage biz and into the ECN business. And, I absolutely agree that capital use should be restricted to those who know how to use it. And, it cracks me up, that when they started making traders take the Series 7 exam (to hopefully stop retail firms from allowing the non licensed public investor from getting buried), they, at the same time, allowed 4 times retail margin for PDT accounts...makes no sense to me, never has. Oh well, onward and upward (will we close at another "all time record high") - this time the SPX? Don
Thanks for the info Don. Based on your belief/boxes run. On average... how many do you guestimate take place on the NYSE on a daily basis? Thanks NX
regulation is bad.....SEC is bad.......PDT is bad........speculation is as old as prostitution..........you can't kill it.......even 99% of all mutual funds are market timing speculators......but hey even most prostitutes use condoms these days......and i think most prop firm owners need to wake up to the ethical issues regarding: fully disclosing risks, providing training at least in terms of risk management, and enforcing risk management (make the trader earning every dollar of buying power by proving he has a solid grasp of risk management)........just because a prop firm can make way more money if a trader overtrades.......doesn't mean they should allow the trader to overtrade.......and ultimately blow up.
Absolutely agree, and all this is covered during our New Trader Orientation. Even with tight controls, we have the occassional guy who just flips out (pretty rare in a licensed professional, but it does happen from time to time). We set our radar at 10% down or 20% up in each trader's account. At that time we evaluate who they are, who the manager is, and make the appropriate calls. FWIW, Don
I was trading at All Tech back then. Barton killed 5 at All Tech and had killed 4 at Momentum minutes earlier. And whereas his losses may have pushed him over the edge Barton was a troubled guy. In addition to killing his 2nd wife and 2 kids the day of the shootings he was a suspect in the murder of his 1st wife and mother in law. Back then, even prior to the early 2000 crash I saw a lot of people blow out trying to trade the high flyers. In any event giving rookie traders too much rope (i.e. leverage) to hang themselves is a problem.
Friday 30 July 1999 Gunman kills 12 after watching shares plummet By Ben Fenton in Washington 12 dead in shooting rampage [29 Jul '99] - Access Atlanta AN irate investor shot dead at least nine people in stockbrokers' offices in Atlanta, Georgia, last night after killing his wife and two children. Hours later he was cornered by police 30 miles from the city in his green getaway van and shot himself. Mark Barton, 44, a chemist, had gone on the rampage with two large-calibre handguns after apparently losing money on the Internet. A witness said he told the brokers as he walked in wearing shorts: "I hope this doesn't ruin your trading day." He then opened fire. Twelve other people were injured, seven with gunshot wounds and the others as they tried to escape. Mayor Bill Campbell, of Atlanta, said that Barton had been involved in day-trading, a form of stockbroking in which self-taught investors buy and sell stocks and shares on the Internet. The shooting, the latest in a long series of mass killings in America, coincided with a sharp drop on the New York stock exchange. Police said that Barton's family were found dead in a flat in the suburb of Stockbridge, about 15 miles south of the city, by people hoping to rent the property. A note had been left at the scene. Police believe that the killings could have taken place several days ago. Barton was said to have no criminal record. But six years ago his former wife Debra and her mother, Eloise Spivey, were found hacked to death at a camping site in Alabama. Two months before the deaths he had taken out a £400,000 life insurance policy on Debra, to whom he had been married for 15 years. Despite strong suspicions by the police, he was never charged and took custody of their children, Matthew, now 10, and eight-year-old Shelly. The scene of yesterday's shootings was an office complex called the Georgia Security Centre in the Buckhead financial district of Atlanta. First Barton, 6ft 4in tall, walked into the offices of Alltech Investments at 3500 Piedmont Road, where he shot four people. Mayor Campbell said: "Witnesses said those who have identified Mr Barton say that he went in, was standing around and then saw the market going down and started shooting. "We have no idea that he had even sustained losses. We have been told that he had fairly substantial swings up and down in his day-trading." Police with guns drawn escorted terrified workers out floor by floor as they scoured the building for the killer. Dozens of ambulances pulled up outside the building and hospitals were put on the highest alert. Witnesses described seeing bodies on the floor of offices and paramedics giving assistance to badly injured people lying in pools of blood. Harvey Houtkin, the chief executive of Alltech Investments, said that Barton shot the office manager and secretary at point-blank range. Mr Houtkin, who is based in New Jersey, said that he had been speaking on the telephone to a customer who had been in the office at the time of the shooting. "I was told this guy was just shooting at people as they were sitting there. I am having a hard time coming to grips with what's happening here. You normally just hear it on the news. I was told he had gone into an office and there were sounds of the argument. The door of that office flew open, this man came out and went on a shooting spree around the rest of the office. Dealing with the stock market is hard enough, but this is something else." John Cabrer, who works in an office next door, told an Atlanta television station saw three people who appeared to be dead and four others who were wounded. "I tried to revive one of them, but then I realised he was gone, so I went to the man who was still conscious on the floor and I called his wife for him." After the first killings, Barton ran across the road to number 3525 Piedmont, the offices of Momentum Securities Inc, which claims to be the largest electronic day trading operator in America. He was still carrying both guns. Charles Carter, who also works in a nearby office, said he saw a middle-aged man lying on his side with blood streaming from a wound in his side. "There were paramedics tending other people on the ground, but they weren't looking at him, so I suppose that they figured he was already past helping." Another witness, Chris Carter, said that as police escorted him out, he saw a man's body on the floor. "They weren't attending to him, which led me to believe he was dead." Scott Belazi, who works on the third floor of the building, said: "The police got us out of there. We saw a bunch of blood in the leasing office." Early today several of the wounded were critical. Last month a psychiatrist in Michigan was killed by his former patient, who also shot a 45-year-old woman and injured four other people. He killed himself. In April a 71-year-old man raked the first floor of the Mormon history library in Salt Lake City with a .22 pistol, killing two people before police shot him. Three months earlier one person was killed and another wounded when a man walked into a Salt Lake City office with a grocery sack of bullets and fired.
Spooky stuff, first of all blowing out an account or two is obviously no reason to go all berzerker; at the end of the day its only money, and there is nothing wrong with bagging groceries, etc. Look at Nick Leeson or many others who lost zillions. Sad. Here is a link to the guy at wikipedia, he's smiling what a freakin psycho. :eek: http://en.wikipedia.org/wiki/Mark_O._Barton
I came by this post and wanted to clear up some things about negative views of Allston Trading being included in your list of firms above. I know many new traders use this site to search for any background information about prospective employers, including Allston. Especially since we are not a typical "prop shop" we get plenty of non financial industry applicants that browse through these forums to find out more information about us, many of which turn out to be significant long-time contributors to our firm. We have a highly rigorous interviewing/hiring process and hire a very small minority of applicants that we get. I would have to assume that the "stack of resumes" that you have might include a very very small number of former Allston employees. In fact, we have a non-compete agreement that strictly prohibits former employees from engaging in any kind of algorithmic trading upon leaving Allston. In short, my point is that Allston is not a run-down prop shop that this thread is targeting. Prospective applicants or Maverick74 can contact me directly or reply to this post for further, ACCURATE, information.
I know where you are coming from. I think it does partially depend on the individual personality. But in my opinion, when you are doing well with a current style, you are in the best position to experiment and evolve, financially and psychologically. That's how I approached it and I encountered absurd resistance. It's a lot harder if you wait till your current style/market/edge has become inferior. We all saw what happened to the tape-reading edge. All the firms waited till the last second, even though the signs were in the air for years. Look at Swift. As shady and problematic that firm is, they were always invested in a profit split with the trader. That is a key reason why there are so opportunistic in exploring new markets and exploiting innefficiences. While the US "prop" firms were fighting each other over a dying edge, Swift guys were making bank with Millenium. And Swift benefited greatly from it. I'm not knocking Bright. But I will say this much. If Don and Bob have so much confidence in their training & education, why are not they running true prop models. Bright is already selective in their traders. Yes, it will take upfront investment and time, but if you really believe in your traders and your firm, then you will benefit better from profit split. The commission override model is a closeminded approach that conflicts with the trader's best interests. There is no incentive to explore other markets, sometimes other styles. I remember trying to get direct access to Millenium as well as a certain lucrative regional exchange. My group leader was supportive but the heads of the firm were so closeminded. I tried to reason by saying that these extra routes will make the traders in our group more money. That fell on deaf ears since more profit to the trader does not mean more profit to the firm. They could not even make the connection that extra egdes will improve trader longevity, hence more future commissions and more cushion to step up size.
Back about 5 years ago or so, I spoke with a prop firm in NJ (don't remember the name). It was the worst offer imaginable. They wanted a $25k deposit and you get 4:1 leverage for daytrading, which is of course the amount you need to daytrade retail with the same buying power. It gets better...my profit split would be 50%. Who in the world would open an account with them where they take 50% of my profits and I end up putting up all the money and getting only 4:1 leverage. What a bunch of idiots.