Trading the "Bright" way...

Discussion in 'Professional Trading' started by Don Bright, Jul 16, 2002.

  1. Well, it seems that there are those with a little extra time on their hands, and for some reason or another want to re-ignite some "Bright bashing." This is the price we pay for success, and I am not overly concerned ...except when it causes potential problems for new traders.

    Let me, once again, outline our business model, briefly, and why we seek only those who have confidence in their trading abilities and their ability to run a business.

    Trading is a business, and before you get too involved with any firm, you should check carefully all the financials and other pertinent data about the firm. Be sure the "owners" have a lot of money in the firm to protect the traders. Ask for a "Focus Report" (filed by all pro firms).

    By not having "employee" traders, we can offer benefits like "k-1" reporting for taxes (exempt from FICA), and by having the traders put up a nominal amount of money (just transferrring it from one account to another), we can offer a 100% payout and low fees. Traders who fall for the "prop" (no cash" thing end up actually losing much more money than we ask them to simply put up (hopefully never lose).

    This section of the board is set up for Self Employment, and that is exactly what we assist in...self confident trading for those that take this whole thing seriously.

    Thanks for the support from those who understand....

  2. Lars


    Don -

    Sorry if this is a naive question - but I am confused by how a prop trader who puts up nothing stands to lose more then you ask them to put up.

    How does it work when a new customer puts up money to join Bright? If I put up 25,000 and lose 15,000 and decide to leave Bright, how much do I leave with. Do I cover the whole loss? I know I am assuming a worst case scenario where a trader has a bad stretch and loses money, but that is a reality for most new traders.

  3. 1. (straight example from a trader I know). Was trading with a "prop" firm in NYC, paying 1.5 cents per share and doing about 2 million shares per month, and splitting profits 80/20 (80% to the trader, pretty good).

    The difference between .75 and 1.5 cents on 2 million shares per month is about $15,000 per month paid in extra fees to the firm. So even if they get 80%, they get 80% of a much smaller number. Pretty basic.

    2. When you are trading well, you don't mind risking a little...remember this is Your business, not some flunky job where you have to do as you're told. This way you get to keep the whole amount of profits.

    I know that some firms have better examples than the above, but the same idea still holds true.



    "1. (straight example from a trader I know). Was trading with a "prop" firm in NYC, paying 1.5 cents per share and doing about 2 million shares per month, and splitting profits 80/20 (80% to the trader, pretty good)."

    This guy deserves whatever he gets for being dumb enough to accept a deal like that. This isn't 1999, when firms could charge obscene fees and get away with it. This guy obviously did not do his homework and is getting screwed royally.
  5. Sorry, but I WANT my firm, if I am a prop trader, to have a piece of my trading P&L. That way our interests are aligned. The firm and I both make and lose together. Your way, you really don't care as long as I stay in business. What about the additional 20% you use in your example. (The commission part is bogus. Almost every firm will give you rates that are similiar.) ? I just trade larger. As long as the stocks I trade have enough volume to handle it, then I can have the same effective payout as a 100% guy by trading 25% bigger.

    Bright is a brokerage house, selling its JBO. If I want 100%, then I would be a customer. 4:1 intraday. To get 100% and be subject to the risk of other traders, the risk of regulatory issues such as NX discussed on another thread and other issues does not outweigh an additional buying power "sold" to me by a prop firm that pays 100%. IMHO.

    I AM a customer by the way.
  6. I looked into Don Bright a bit on the bright trading web site and it seems to me that he made a bunch of money as a floor trader and decided he wanted to own a brokerage firm. Nothing wrong with that, I have nothing against him, and never met him personally.

    There is one consistent thing here that is the crux of the debate. It is all about volume. It isn't about how much money is made on the money at risk. It isn't about annual profit/loss generated by individual traders. firms that give extremely high payouts and require deposits to cover losses obviously do not have a monetary interest in how good the p/l of their traders is. I don't see how that issue can be avoided. Until it is addressed in clear and accurate terms the debate will continue. Everything I have heard up to this point has just been avoiding the issue by changing the subject onto not paying FICA ( so you get less social security when you retire ) or paying lower commissions per share than other firms, or half a dozen other side issues.

    Sorry Don, don't get mad at me, I'm just a guy out there in the world calling it like I see it. If I am wrong then you can correct me in this public forum and be done with it.
  7. Why would anyone want to pay fees plus give away a percentage?

    I can see the logic to sharing P&L to a point (makes some sense). But don't kid yourself that your firm isn't charging you as well.

    Anyway, there is always room for successful traders who want to be in charge of their own destiny.

    BTW, how can you place $3million in Opening Only orders with a 4:1 margin...doesn't this limit your ability to take advantage of one of the most lucrative strategies available.

    Trade where you like...and good luck.

  8. I play the game of trying to steal the opening along with the specialist. But, only in my core group of stocks. I make the assumption that any order i put in can and will be filled. I want nothing to do with having so many orders in that if I got filled it would be a panic situation. What if your entire firm got filled on all of its orders. I'd love to be a fly on the wall in that situation. Encouraging traders to take more risk than they can afford is an interesting concept. I guess a trader need to check a company's financials to see if they can handle a lights out fill.
  9. CalTrader

    CalTrader Guest

    Don, why dont you address a few of these points made by others with respect to :
    (1) Mentoring/ supporting new traders: How do you do this ?
    Do you ever refuse potential new traders based upon your asessment of them and their busness plan - regardless of their capital ?
    (2) What about these points regarding your equipment feeds ? What is the standard equipment available to a trader in your offices and what is the record of downtime versus uptime of your networks /systems ? What are your plans to enhance the platform over the next 18 months ?
    (3) What is the suceess ratio of the people you bring on board ? That is how many traders are still in business after 1 year and how many of those that survive the first year continue trading with you - or are you really set up to help people get started ?
  10. Sure:
    1. We have meetings after the close 2 days a week in our office to help all new traders. We have "mentor" progarms in several cities. We offer, completely free advanced training to all of our traders here in Vegas every month.
    1a. We have "suggested strongly" that some find a different career. We have refused to accept business plans.
    2.All traders are provided with a dual screen Redi, with excellent uptime records. Redi is constantly upgrading. We have new platforms for remotes as well. Neovest is an option available to all.
    3. About half make it the first year, and after 1 year about 70+% are profitable.
    I challenge any firm with independent traders to beat that, by the way.
    Most stay with us, our retention rate is excellent.

    Another point: Since trading is an individual business, everyone should treat it that way...we cannot "make a good trader" (nor can anyone).

    What we do is provide quality education, workplace, pricing, and all the need to provide the talent, dediation, focus, and discipline.
    #10     Jul 19, 2002