Where Do Props Set Up Shop?

The "proof is in the pudding" - we have some of the best traders on the planet, both new and highly experienced. If the overall program that we offer was not superior, these highly skilled and profitable people would not be here. I am willing to compare our traders success with those anywhere DON YOUR QUOTE ABOVE YET I CAN HARDLY EVER REMEMBER READING 1 POST FROM A BRIGHT TRADER ON HERE OUT OF 10'S OF THOUSANDS I'VE READ. i've never seen a p@l shown by a bright trader on here. sure i've seen many people inquire about bright but i've seen few who trade for them. I FIND THIS PERLEXING AS THERE HEAD CHEERLEAER(YOU) ARE ON HERE ALL THE TIME SO OBVIOUSLY YOU SEE VALUE HERE. i have no reason to doubt your statment but please show us"the proofs in the pudding" as you say.you've never shown any proof of how many bright traders make 50,100k 200k or more or more importantly how many lose. industry avg's are horrid so i'd love to see your proof you talk of. since your rates are much higher than most and you talk of all the advantages of being a bright trader that makes it worth the extra commish please feel free to show us the"proof". i'm eagerly awaiting your "proof". again i know brights a good firm and i've never read a bad word about them so i want to see this "proof" so if its true i would like to trade for bright. i'll pay the extra commish if you can show me a way to make 500k a year

 

second that!

 

A couple of notes. First off, I responded to your PM Mr. Hedgeking - and I will make a similar comment here. Thanks for sending it.

Secondly, I will admit that there are firms with a very inexpensive commission structure, but they aren't really our "competition." These firms tend to cater to nasdaq scalpers, which is fine, just not a game that the majority of our traders involve themselves in.

We have a different business model, just like we don't "compete" with Swift trade - we actually have an office in the same building, a few feet from each other. The 2 or 3 firms that are still out there, have very similar pricing to ours. Now with most of these firms now part of a major listed company, the traders I speak with admit to "things being different."

Why so many coming to Bright? I guess it boils down to what I call "value added" - which we work really hard to provide to our traders (ongoing mentoring for those who need it, good interest rates and spreads, the RediPlus API which can be written to very easisly, and, of course, the liberal use of our capital).

FWIW, 2 major "competitors" are no longer in this part of the business, and these 2 firms have never been a concern to us as it pertains to pricing. Goldman is not the cheapest, but they make up for it in many ways - short stock, no paying to "locate" short stock (which I am still puzzled about, the fact that at least one firm does charge for this service), first class back office, and of course, the financial security.

As far as our traders being involved with ET, even though many came from this site initially, most have said they were "lurkers" and not posters. I prefer that they keep busy trading rather than posting, LOL. And, I don't think my regulators would like to see me posting up $$ results for people within my organization, even if it were done without names.

We share the strategies that our traders are engaging in to make $500K or more, but I do not share specifics, because every trader is entitled to their privacy. How all this information is put to use, is an individual thing. I have traders who make that much just doing opening only orders (but most of the top guys don't stop after the opens).

All the best,

Don

 

There's only a handful of bright traders that bother posting on elite trader at all, most just don't seem the point....

Posting trader's P&L w/o their permission...LOL, i think Don has a little more common sense than that...what do you think he's gonna do? Send out mass emails through the webmail server requesting bright traders to rally to the firm?

And even assuming some traders started posting here, there would be no credibility because you (and several others) would just assume these new identities were alter-egos of Don.

Listen, not every trader that loads up the Redi platform is a superstar. Of course there's individuals that failed, every firm would have a long list of traders that didn't last.

But i can vouch for him and say there are a lot of very talented and proficient traders in Bright Trading. I can think of several myself and i'm oblivious to 70-80% of people in Bright.

 

Well, I am absolutely not in BT, but to me, Don show up here means the other thing.
There are so many traders come up here for help, but truely, at least 75% of the responses have no depth, and Don shares them.
Back in the days that Don, Deeman and all the other big boys shared their experiences and knowledge here, ET were just like my homepage, but now..........................!
Anyway, to me, Don show up here doesn't mean BT, his words mean shareing, comparing and thinking.

 

To setup a prop shop, you don’t need talent – you need fish. You need guys who are smart enough to aspire to something, but dumb enough to throw their time at getting rich quick. Very often this is a function of youth and the ability to go do something else if trading at a prop firm fails, but even that is becoming less and less the case as rent in citiies like NYC are so high that cannot endure the unpaid learning curve at many firms.

But, to answer your question, here is what is required to obtain the pipeline of labor that you need to successfully operate a prop firm:

1. College-educated young people.
2. Rents in the city centre which are not oppressive.

And 3, is one that I’m adding, a PPP imbalance.

My theory is that prop firms of the future will be abroad where the population is educated, but underpaid in USD terms. Add them as LPOA’s to your US trading account, denominated in USD and they’ll churn away for 100 years if they can making 50USD per day.

Daytrading in the US is on its last leg.

 

I've answered the question about how to open a proper Broker Dealer a couple of times here on the board. This might help explain why the idea of Affiliates seems to be working well. We keep all the traders protected under the main company umbrella vs. starting a sub-LLC with the inherent risk involved.

1. Buy an exchange membership.
2. Hire a great Compliance Officer.
3. Find a reputable Clearing Firm that will clear your trades. For example, we Clear with Goldman Sachs who acquired Spear, Leeds, and Kellogg a couple years back (we've been with the same firm since 1978). They generally need about $10 million or so.
4. Obtain proper licensing in each State/Province you want to do business in.
5. Obtain proper management licensing.
6. Negotiate pricing, interest rates, volume minimums, etc. with the Clearing Firm.
7. Sign obligatory account guarantees.
8. Get audited financials, file FOCUS reports, etc.

There are a couple of optional paths, but that is usually how one ends up in a sub-llc.

I honestly wonder why some "hedge fund" people don't go through the hoops to become a broker dealer vs. paying the fees they pay.

Don

 

Does a BD have to buy a membership? Can't BD's stand alone if they have the clearing agreement with an exchange member (i.e. a BD who clears through Penson or GS)?

 

I think the only way you can get the risk based haircut or leverage is by being an exchange member. Not to mention clearing member rates vs. non-member rates.