Schonfeld Vs. Assent + When Will Assent get Sold?

Just to add a note, I traded on lightspeed for 4 years and now im on Anvil. Both are excellent platforms but I think if I had both available to choose from, Id pick Anvil.

 

RARE INTERVIEW WITH SS HIMSELF




Dave: Welcome, Steven, thank you for joining me today.

Steven: Hello Dave.

Dave: Let's start the very beginning. What first sparked your interest in the market?

Steven: Well, I was a teenager when I first got interested. We had a stock market class in high school and I had always been into strategies, like gambling at the casinos, race tracks, or poker. I felt that the market was a bigger and better game. After college, I became a stockbroker at around 23 years old.

Dave: I know you were one of the top brokers, at Pru Bache, for about seven years. You must have been making a serious salary and bonus. What made you want to go out on your own?

Steven: Growing up, I always felt that I was very entrepreneurial. When working at the brokerage, I got to build up my capital base, but part of my goal in life was I wanted to be an owner and see the other side and do actual trading in the market. The electronic method of trading stocks had just recently been introduced in the ‘80s, and things were becoming more electronic overall. Computer power to assess and analyze market data was coming into its early stages. Since I always loved reading percentages and statistics, I saw a natural fit with trading. In addition to that, after the crash of ‘87 I felt that proprietary trading could be pretty big for the next few years and I gave that a shot.

Dave: You really got started at the ground floor of proprietary trading?

Steven: Yes.

Dave: What’s the difference between a proprietary firm, a professional firm and a retail direct access firm?

Steven: A proprietary trading firm backs its traders 100% with its own capital. Retail trading firms house customers who are trading their own personal capital. At Schonfeld Group, we support both types of traders. Professional trading is a broad term that generally defines any trader, whether proprietary or retail who earns his or her living as a trader. Schonfeld Group aims to be a place where both types of professional traders can have a successful, profitable career.

Dave: Did Level II data exist back then?

Steven: We did mostly New York stocks, but there was also level II at the time for over-the-counter stocks.

Dave: Did Schonfeld grow steadily through the 1990s, or did growth fluctuate at times?

Steven: Very steadily. From 1988 on for years we grew very steadily. We always tried to make it not too fast, not too slow, but moderately strong growth.

Dave: At your peak, how many traders worked for Schonfeld?

Steven: I think it was about 1100 proprietary traders. We have had about 4000-4500 traders come through the doors in the last 17 years.

Dave: Is it strictly in the office trading, or are there remote traders as well?

Steven: We have remote and also office. We are looking to grow our remote trading. It is setup for the traders to be in office for a while, at least 6-7 months and then go back to trade out of their home or another office.

Dave: You basically start everyone out in the office for a couple months?

Steven: For the most part, yes. But if someone has some sort of a track record they can by all means start out remote.

Dave: I am personally friends with several of your traders during the late 1990’s. Some of the stories they tell are simply amazing. Are you able to share any of these stories?

Steven: From 1999, 2000, and the first quarter of 2000, which was 2 1/4 years of trading. In that period, the trader compensation, how much I paid my traders was $685 million. That’s the best way I can illustrate those times.

Dave: Wow, that is truly mind boggling! Were you guys the first proprietary firm of the modern era?

Steven: As far as I know, yes.

Dave: I know we witnessed a shake-up in trading firms after 2000, but now there seems to be a new boom starting. Do you think this relates to anything in particular?

Steven: I guess part of it is from the number of years of trading. Through time, weaker firms fell apart from the tough trading and there were very few firms left. Now new players are going back in. Possibly, there is a bull market, or at least one coming in the next few years, people are preparing for it. The newer crop of people are trying to get in now that weren’t around back then.

Dave: Is there a difference between a daytrader today, and a daytrader in the late 90s?

Steven: Not that different. Maybe some are more computer literate, maybe more mathematical.

Dave: How about strategy and tactics. How have they changed?

Steven: In relation to strategy, it’s a whole new ball game. There use to be tons of volatility and many volatile stocks. Nowadays, you have to really have to narrow in on the really volatile stocks of the day, instead of trading the same stock over and over again.

Dave: How do your traders locate these volatile “stocks of the day”?

Steven: We provide all of our traders with a proprietary technology we’ve developed called SchonSite. It’s a filtering tool that uses Schonfeld Group’s own proprietary variables to help our retail and proprietary traders research and identify stocks and trends that will support the strategies they’re using.

Dave: Are traders today holding the trade longer then they did back in the 1990’s, or is the time frame pretty much the same?

Steven: When we talk about holding time, we have an enormous amount of studies of all the trades that have been done in our firm, and it really depends on the stock. Scalping can be within seconds, and yet some scalpers are holding for 5 to 15 minutes today.

Dave: I know Schonfeld has put a lot of effort behind training traders, can you tell me a bit about your training program?

Steven: The program is very different for a new trader than it is for an experienced trader. What we have is statistics, studies, report cards, video broadcasting, and, a quant group who gives out enormous amounts of information about strategies.

Dave: Do you prefer someone who is new and knows nothing, or do you prefer someone who is experienced?

Steven: Really, I would take both.

Dave: Does the banning of bullets change your trading tactics at all?

Steven: Not materially, or too involved, but there were some scalpers that got affected more than other traders.

Dave: Do you have an opinion on the new threshold rule?

Steven: There are a lot of variables and its too early to tell how it will effect traders.

Dave: What is your view of the day trading industry as of today?

Steven: I still think we are in the doldrums. Volatility is unbelievably low, and in low volatility its tough to make a lot of money. On the other hand, its also tough to lose a lot of money. Unfortunately, many traders aren’t making what they use to make in the past. The most important thing right now is to stay in the game and work on honing their skills like control, discipline, and strategies.

Dave: What do you think is responsible for this low volatility?

Steven: Volatility is low because of a lack of retail volume in the market as a percentage of overall volume. Also, the influx of competing black boxes in the market is resulting in fewer big swings.

Dave: Judging from what I witnessed at the 2005 NYC traders expo, some of the larger, full service firms like Fidelity are courting the lagging retail market. Seems like someone is predicting retail coming back in a big way. What’s your opinion?

Steven: I think the retail market will grow slowly until there is another bull market. Then we will see it take off in a much bigger way.

Dave: If retail comes back, leading to an increase in volatility, do you foresee a new ‘golden era” in daytrading?

Steven: More like a silver era. I think we will see another good chapter for active trading, though not as golden as before. Retail will come back with the next bull market. However, the black boxes that trade against retail volume are here to stay. This is a big change in the environment since the last golden era of active trading.

Dave: I can’t wait for those days again! We are out of time. Thank you for joining me today, Steven.

Steven: Thank you, Dave.

 

Enjoyed this very much, thank you.

 

Hi Sun, If you trade on Anvil, how do you feel about Assent short list inventory?

Thanks

 

It sucks, but there is a program called stock locate that we use to request things that are unavailable. Usually the response is instant unless its a stock thats really hard to borrow. That can take some time and usually cost more to borrow. Many stocks have no charge, but the less shares that are available on the street, the more it costs (ie. low floats that are active). What I have found odd is that there have been times when stocks like GM had to be requested. Now this takes a matter of seconds to get the stock and there is no charge, but why the hell does a stock with millions of shares in the float need to be requested. They have the shares, its just not loaded into everyone system. You can also make up a short list that will load these unavailable stocks into your system everyday. So if you have stocks you know your likely to trade (ie. GM) but are usually not available they are automatically made available to you premarket. When I was on Lightspeed (e-trade pro at the time) this was the situation as well. Many people had permanent short list for stocks they knew they were likely to trade.

I would say this is not a major issue that someone should consider if they are deciding to trade with Assent. (IMO of course) Its more of an inconvenience. As I have said, if the stock is not shortable in the system, it usually takes as much time as it takes to type the share amount you want and the symbol to have it available. If there is a charge 90% of the time its $10 per 1000 for the day.

 

I dunno if they are getting sold at all. They have partners in the offices that have a financial stake, an if you ve been to a NYC offices lately, you would notice that most every station is used.

 

Assent is not being sold. Anvil is a clone of lightspeed and there are 5 firms for the day trader all with the same capabilities(software/fee's).

 

From looking at their site, do they not offer charts with the software?

Does anyone here trade at the Atlanta branch?

 

Anvil comes with basic charts. Anvil will link to external charting software.

 

Assents website is horrendous. I dont think its been updated in years. Anvil has charts built in and e-signal is also provided.