Anybody making any real $$$???

Originally posted by Don Bright
Come on guys....let's not mis read my comments about trading vs. investing. If someone wants to hold a large number of shares for a longer time frame, that is fine...and since they are not trading much, they should stick to retail (pay $8 a month in commissions)...vs. going through the hassle to trade at this level.

Would it really matter to these people if they paid 72.50 or 72.70 on a stock they plan on holding for 3 months?? Of course not. Do they care about market access, lower costs, use of intra day capital,? Of course not...

I am agreeing with some of you...go for it, do it retail, make money....there are many ways to get ahead in this business, we just take the route we have been involved in for decades.....

If we want to "risk" a $mil or more for a few months in a certain stock, we can do that ourselves (believe me have :) ...) we wouldn't need a trader to do that for us....

Just "keeping the peace" ...
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Don,

Hmm.. I'm not sure if I understand your pointt here.

You wrote:"Would it really matter to these people if they paid 72.50 or 72.70 on a stock they plan on holding for 3 months?? Of course not. Do they care about market access, lower costs, use of intra day capital,? Of course not..."

Of course, they would care about capital! In a retail acct, the average trader most likely will NOT have the access to the same level of capital/leverage right. It's not like the "average" retail trader has $1M or $3M in his acct. If he did, then he probably wouldn't be trading but living in retirment or if he did trade it would be for fun. haha.

Isn't that's why the average trader supposedly come to Bright Trading for. So that they can access up to $1M acct with $25K down right? That's why he wanted to go prop trading in the first place since he doesn't have a $1M sitting around.

Guess what? Once he gets there, he then realize he's a basically only allowed to scalp and maybe occassional overnite. Which is fine if that suits him. Just because a trader wants to hold for a few weeks or months doesn't mean he should go retail or be considered an investor right? I mean look at SAC or other trading/hedge fund firms . They do hold for a few weeks in shares of hundreds of thousands. And they are definitely NOT retail, nor would they consider themselves "investors" aka Warren Buffet.

No wonder it's so difficult for the average prop trader to even make low six figures. He has to be almost a PERFECT scalper to consistently rake in that kind of money given those guidelines. That's quite a hurdle.

But it's all fair. People do whatever they like to do. In whatever time frame they like. And in whatever fashion they seem fit. But from a statistical standpoint, it seems like fighting noise to get money out of the market.

And, there's NOTHING wrong with scalping. And there are people who make quite a decent living at it. Look at the floor traders,etc.
So, from everything I've read on this board, I can come to the conclusion that for the vast majority of prop firms they really are in the scalping/maybe overnite niche. So, it's not like they like all trading styles as long as it makes money.

For the newbie, excellent scalping skills are not easily acquired. No wonder most of them blow up the first 3-6months. But doesn't matter, there are always more warm bodies in the street.

It's clear to me now. And like I said, there's nothing wrong with that as long as all parties are clear on that.

trader99
 
At least you're carrying on a civil discussion about the topic. Of course most people don't have a few million to trade with. We do have money for people to trade with, and we keep the business going by offering it to traders who reflect the "exchange trading model" of intradday (mostly) trading. We as a firm would not make any money by simply "loaning" someone else money to play the market, would we? Our average traders do make 6 figures, as do the floor traders, but again, this is an individual enterprise.

Everyone is welcome to borrow money from others with the expectation of higher returns (your Warren Buffet example), and why shouldn't they?

I meant nothing negative about saying to stay retail with longer term trading scenerio, it actually makes more sense, that's all. Why pay exchange dues and get licensed when you don't have to.

We do an excellent job providing a service to a very select group of individuals who happen to like trading at this level...we do one thing, and we do it well...nothing more, nothing less....fair enough?
 
Originally posted by Don Bright
Everyone is welcome to borrow money from others with the expectation of higher returns (your Warren Buffet example), and why shouldn't they?
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HUH? Warren Buffet does NOT borrow money for his multi-billion dollar funds/LP. Those are his investors. You are saying apples and oranges here.

As usual, I'm always civil in my discussion and trying to pinpoint the very exact nature of things. Kind of like a detailed analysis/educated debate until the subject matter is resolved. And I believe I got the picture clear now unless someone thinks I'm missing something then feel free to add comments.

Anyhow, like I said Bright has the righ to do whatever it wants. And hopefully, both parties understand the intricacies and implications of what they are getting into then it's all good. It's free enterprise afterall.

trader99
 
When a company issues stock, it is actually borrowing money from these "investors" to run the company...just like any debenture, etc. I have started several smaller companies, issued IPO's, DPO's and the like...and no matter how we presented it, we were simply raising capital...no big deal.

I just want to be sure that you realize that I am not saying anything negative about any form of involvement in the market...my only concerns arise from the "bad people' out there who are taking advantage of the masses (the green = by, red= sell types). Sophisticated investors should be able to put there money wherever they like.....

I just took my Series 7 "continuing education today, and have all these stupid rules in my head about "customer accounts" "full disclosure" and all the rest....and that may be why this discussion seems so on topic....when I see all the nonsense that retail brokers go through to justify selling "stuff" to people it makes my head swim.....

Anyway, how about posting up some trading strategies ...I started a new thread trying to help people make some money ...you have any good ideas you want to share....??
 
Originally posted by Don Bright
When a company issues stock, it is actually borrowing money from these "investors" to run the company...just like any debenture, etc. I have started several smaller companies, issued IPO's, DPO's and the like...and no matter how we presented it, we were simply raising capital...no big deal.

I just want to be sure that you realize that I am not saying anything negative about any form of involvement in the market...my only concerns arise from the "bad people' out there who are taking advantage of the masses (the green = by, red= sell types). Sophisticated investors should be able to put there money wherever they like.....

I just took my Series 7 "continuing education today, and have all these stupid rules in my head about "customer accounts" "full disclosure" and all the rest....and that may be why this discussion seems so on topic....when I see all the nonsense that retail brokers go through to justify selling "stuff" to people it makes my head swim.....

Anyway, how about posting up some trading strategies ...I started a new thread trying to help people make some money ...you have any good ideas you want to share....??
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Don,

Uh-huh. Again, I'm confounded. What you are stating is just the obvious facts of how capital markets work. They exist for allocation of resources(in this case capital). All equity markets and debt markets are in sense to facilitate borrowing for corporations. So, in a sense, everytime a trader/investor buys a share of company IBM he's providing capital for the company's growth,etc. etc. blah blah. But that applies more so in the primary market(i.e. at IPOs). Most secondary market trading is just between traders among themselves and thus the company doesn't get a dime of that(though they enjoy the appreciation in shares prices or suffer the depreciation as well).
Just plain and simple how markets are set up.

Now, the point I made earlier about Warren Buffet and your comment about "borrowed" money,etc. is a different thing. The fact is that Buffett is NOT really "borrowing" money from the investors in his fund. If Berkshire Hathaway or Fidelity or Janus went under tomorrow that's it. Poof! It's all gone. No real recourse(obviously with enough lawyers one can always reclaim something. hehe). But besides, that's the risk of investment.

But I think you are confusing the equity market concept of raising capital and what I mentioned earlier about Buffet and other funds. That's Buffet does NOT OWE his investor anything. He doesn't have to pay interest like a loan. It's NOT a loan. So, it would be ERRONEOUS to say Buffet is "borrowing" in any classical sense of the word. As a general partner, he can do whatever he wants to do with the money given to him by his investors within the guidelines of his investment charter. That's it plain and simple.
Nothing more and nothing less.

Now, let's get to the HEART of the REAL matter I believe you are trying to say here which you have REPEATEDLY said elsewhere on this board. You and Hitman have this ongoing debate of Bright model vs the backed money model of Worldco(and whoever else there). WHICH In your sense is what you are calling "borrowed" vs your own money trading deal. Which you have repeated pound on the table for its superiority. I've solved that problem and it's very simple.

What Hitman via Worldco(or any number of other firms) provides is basically a CALL OPTION. So, the payoff is obviously ASYMMETRICAL. The most one can lose is your time(if you put nothing down, or very lil $ if you put something depending what payout level you want and Worldco's elaborate scheme).

What Bright Trading and in some sense what other retail traders face is SYMMETRICAL risk. That's like going long the underlying security like going long or short a stock(or futures) outright.

That's it. END OF DEBATE. So, it's up to the customers whether they want to take 1) ASYMMETRICAL risk or 2) SYMMETRICAL risk.

If you read Market Wizards carefully, you'll find that the reasons why many of those supertraders eventually decided set up managed futures fund or hedge funds is because they don't want to take symmetrical risk anymore. Obviously, they will not get the full 100%(aka Bright) but they face the risk profile of a call option, which to many is more sleepable once you have net worth in the tens of millions or hundreds of millions. Because a few bad moves, then game is over you buddy! Look at Victor Neiderhoffer. haha.

DONE. End of subject. Hope Hitman comes on here to remark at my solution to your 2 debates.

trader99
 
Don:

I hope you realizing i'm NOT in any remote sense of the word attacking you aka Hitman style. LOL. I'm just trying to clarify the various issues as so it were with a fine tooth comb. By doing that one realize the multi-facet nature of anything.

It has been personally enlightening to see the issues as clearly as now. Quite worth the journey.

Cheers to you and your calmness in deep debates!

trader99
 
"When a company issues stock, it is actually borrowing money from these "investors" to run the company...just like any debenture, etc. I have started several smaller companies, issued IPO's, DPO's and the like...and no matter how we presented it, we were simply raising capital...no big deal"


the term borrowing infers that there is an obligation to pay the money back.this is certainly not the case in when a company issues equity. there is no obligation to ever pay it back.if the equity buyer is lucky and the company prospers he will share the wealth but there are no guarantees.
 
Originally posted by vhehn
"When a company issues stock, it is actually borrowing money from these "investors" to run the company...just like any debenture, etc. I have started several smaller companies, issued IPO's, DPO's and the like...and no matter how we presented it, we were simply raising capital...no big deal"


the term borrowing infers that there is an obligation to pay the money back.this is certainly not the case in when a company issues equity. there is no obligation to ever pay it back.if the equity buyer is lucky and the company prospers he will share the wealth but there are no guarantees.
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vhehn:

That was my POINT exactly to Don and his usage of the term "borrow" which I said is NOT what it's about. It's more liek allocation of resources in hopes to share in the success/failures of the enterprise. Bondholders get interest coupon payments and hopefully principal back. Equity are OWNERS and they share the entire risk.

trader99
 
Originally posted by Don Bright
We as a firm would not make any money by simply "loaning" someone else money to play the market, would we? Our average traders do make 6 figures, as do the floor traders, but again, this is an individual enterprise.
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Let me understand this Don. You are stating on a public message board that your AVERAGE trader is not only making money, but he is doing 6 figures. That is either incredible, or false advertising. Hopefully the SEC will take a look at Bright Trading and their tactics. Because if the ave. trader does make six figures, all my friends out of school will be eager to sign up with you. And if this is a lie, all my friends out of school, will be putting a petition together to investigate the tactics of Bright Trading.
 
...Let me understand this Don. You are stating on a public message board that your AVERAGE trader is not only making money, but he is doing 6 figures. That is either incredible, or false advertising. ...
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It is certaily neither. Just like the "average" American family has soemthing like 2.5 kids. Needless to say, you can't have "half" a kid.

What people really want to know is the frequency distribution of traders at Bright, e.g. (hypothetical, after comissions using four bins)

Down > 25K 10%
Down 0 - 25K 20%
Up 0 - 25K 20%
Up > 25K 50%

Then, of that last 50% you would want to further break it down.

Short of that, knowing what the Mode statistic of what a Bright traders makes would be a closer aproximation to what we mean by "average" in the English sense.

You have to remember that these statistics are somewhat misleading anyway, as traders at a prop firm are "self selecting," that is, the ones that bomb aren't counted in the statistic, and hence the ones that stay, stay because they are making money (asnd hence skew the statistic.)

nitro
 
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