We have several entities, of course, but the only one that matters to traders is the one that they become a member of, and that is BT, LLC. ...and that is the Balance Sheet we share with everyone. Don
Thanks. My point then is that as a trader at Bright I am not at risk to the operating expenses such as the tens of leases you are saddled with. My only risk in the LLC is a blowout of more than your 10 million and the trader's money who blew up. That is good. Or, are the leases and operating expenses in the trader's LLC?
PAX (CME 112) is solid there are multiple examples of prop division/self clearing firms ---Kingstree, Refco, Gelber, Advantage . . . and so on
Actually, thanks for pointing this out...this will help other's when they review the "other guys"...as we know, many a "sub-llc" was squashed by things like leases and blowouts. We, of course, pay all of comittments, whether they be for leases or anything else. We keep the "Corporate Liabilities" completely seperate from the Traders LLC. SIPC is like $100K, we keep a Minimum of $10mil to protect our traders from one another.... There was a lot of "dishonoroble" things done over the last few years, and we all know that the "bad guys" usually just set up some other LLC, or tie in with someone who's record is still tolerable...it really is too bad. Thanks for the good questions...take note everyone! Don
If you are worried about an FCM backing a prop firm just compare rates and risk. If they have a good risk system a prop trader should not be able to bring the firm down.
SIPC is 100k for each account. If Bright has a total of $10 million to cover its traders and if you have 300 traders total, then that only comes out to a 33k coverage for each trader. Am I right?
Well, if we have more than 1 or 2 traders that even get close to losing a paltry $100K, that would be impossible. Most of our traders never even risk their own capital...these are serious professionals, not retail risky types. And, besides, we have much more than $10Mil, we just guarntee that as a minimum.. Don
Forgot to say to REG that I do appreciate his "am I right" (reminding me of Bill O'reilly)... so I guess I should have suggested the probabilities a little more strongly.... something like, "why would (much more than 300) xxx traders all lose money at the same time"..."show me where I'm wrong".... Just having some fun... All good questions... Don
hey don, you'll be glad to know that rob speaks well of you also I just started looking into this prop trading last week and after making tons of calls and e-mails, I talked to rob last week and said that I was looking at echo,bright ,assent and a few others and He said that the first 3 were the only ones to look at. I noticed on your web site that you were a market maker and I was wondering if you could answer a question for me, I have asked this on many boards and nobody can answer it Does a market marker for a firm only trade one stock, say NGEN or IPIX, does one guy get a stock at a table and only trade that stock in and out all day? Like the guy who trades for brut, cinn, and the others, does he have more than one stock to trade at a time? They have tapes on everything but so far I can't find a good tape on how the market makers really work, I have a level 2 tape that tells some of things they do, but no one that i know puts out a tape on how they trade, like what indicators does a mm look at, what times of day do they really trade in, I know theres tapes like pristines micro-trader that gives pretty good time frames but I just wanted to know some better tricks thanks
Don't twist my words, Don. I never said that all 300 traders will lose money all at the same time. I am just referring to the probability of 3 or 4 of your biggest traders blowing out at the same time (remember GE/HON?) and how individual accounts are protected if this should happen. It was an honest and sincere question, and you chose to be sarcastic about it. As Bill O'Reilly always says - "The spin stops here", so stop spinning.