5% of traders that make money

makloda · Feb 20, 2007

CEO of Goldman Sachs: "I CAN ASSURE YOU, NONE OF THIS IS TRUE":

flytiger · Feb 20, 2007

The reason why it happens and continues to happen is the fines are meaningless. To quote an energy trader in Calif on bottling up power after getting long, "it's just economics". With perverted thinking like that, this stuff was mushrooming.

Bear got ripped for 160 big ones. that was huge. I look for much, much more.

lindq · Feb 20, 2007

Quote from henry76:

I'm no expert , but if someone has information that is worth maybe millions of dollers a year to someone else , it's a tough secret to keep.

Absolutely.

The next time you see a stock gap up on after-market news, check the trading activity leading into the close.

More often than not, you'll see a clear picture of information that was leaked to trading desks.

The SEC says they are focusing on such activiites. Baloney. They can't track every phone call, Blackberry msg, or note that is passed on the street.

NihabaAshi · Feb 20, 2007

Quote from HiFreekTrader:

...Some Wall Street insiders are pretty sure they know the secret. "Privileged information is the real currency that runs Wall Street," says Doug Atkin, the former CEO of Instinet who now runs the research boutique Majestic Research. "With what the traders at the big firms know, my 11-year-old son could make tons of money."

Here's a hypothetical example, gleaned from former Wall Street traders as well as outsiders who worked closely with them, of how some people think the Street exploits information. Say a fund company, call it Big Dog, wants to buy a million shares of Intel. A Big Dog trader calls a broker at a Wall Street firm - call it Megabux. The broker enters the order into the Megabux trading system. A dozen Megabux "sales traders" get the info on their computer screens. Their job is to find sellers for the shares. But first they call their top hedge fund clients, giving them the chance to buy some Intel before Big Dog pushes up the price. To cover their tracks, the hedge funds don't buy the Intel shares through Megabux, but they reward their benefactor with a lot of other big trades and by paying higher commissions than the mutual funds do...

I know for fact such occurs here in Canada.

Thus, I'm going to assume such occurs in the U.S. markets.

Quote from lindq:

Absolutely.

The next time you see a stock gap up on after-market news, check the trading activity leading into the close.

More often than not, you'll see a clear picture of information that was leaked to trading desks.

The SEC says they are focusing on such activiites. Baloney. They can't track every phone call, Blackberry msg, or note that is passed on the street.

Completely Agree.

Mark

Don Bright · Feb 20, 2007

Just to address the title of this thread...5% of traders who make money....

Hmm, now come on guys, let's get real with this. Even if only 5% of brand new traders make money (it's more than that, IMO)...so what? To think that 5% of traders make money is silly....if you don't make money, then you're not a trader any longer. I venture to say that more likely 90% of seasoned traders make money (there are always a few who "hang on" when they shouldn't, LOL).

Just FYI...

Don

henry76 · Feb 20, 2007

I'm not convinced it's more than 5% Don. Depending on what you call making money , maybe some get lucky , but consistently making money when brand new , that must be rare .

NasdaqTrader · Feb 20, 2007

Quote from phasmatis:

Not a chance in hell trading desks are front running retail. Every firm has Chinese firewalls. Prop desks aren't even allowed to talk to analysts or retail brokers. Every phone call is taped and cell phones are prohibited on trading desks. More conspiracy theory crap from guys that just can't trade.

Prop desks talk to institutional brokers don't they?

They can use email and instant messaging to give out info.,instead of cell phones.

StockApprentice · Feb 20, 2007

Front running can be quite profitable, no doubt. But it's not simply front-running. Do you think you could make money by 'back-running'? .. my thought... uh yeah.

Heck, I'd just like to know what some of the big players are doing period. That would be an edge worth a lot.... despite how that information is played.

Don Bright · Feb 20, 2007

Quote from StockApprentice:

Front running can be quite profitable, no doubt. But it's not simply front-running. Do you think you could make money by 'back-running'? .. my thought... uh yeah.

Heck, I'd just like to know what some of the big players are doing period. That would be an edge worth a lot.... despite how that information is played.

This is why we teach our people to trade on the same side as the Specialist - much better than trying to compete with them. We suggest getting rid of the ego and simply follow the people who make all the money.

FWIW,

Don

Wayne Gibbous · Feb 20, 2007

Quote from HiFreekTrader:

Say a fund company, call it Big Dog, wants to buy a million shares of Intel. A Big Dog trader calls a broker at a Wall Street firm - call it Megabux. The broker enters the order into the Megabux trading system. A dozen Megabux "sales traders" get the info on their computer screens. Their job is to find sellers for the shares. But first they call their top hedge fund clients, giving them the chance to buy some Intel before Big Dog pushes up the price. To cover their tracks, the hedge funds don't buy the Intel shares through Megabux, but they reward their benefactor with a lot of other big trades and by paying higher commissions than the mutual funds do.

This is news?

It's been detailed in books and Cramer's autobiographical "Buzz and Batch" series.

How'd you think a poor trader and terrible stock picker could get so much money?