tm answer this. how does a small clearing firm almost taken over by the sipc clear 60 billion shares in a month? all us stock market combined might do total clearing of 120-140 billion shares in a month.then you throw in the top clearers of gs.bsc,leh,mer and on and on and you're telling me some small firm does 1/2the clearing in the us? ok now that we disproved that lets look at commissions. usually when you have one of the most expensive products you try to stress why your product is worth more than the other. in order to justify your product at 2-3 times the price of a competitor you msut discredit the much lower priced competitor. as you're bashing the clearing firm charging too little or don bright's beating up the llc charging 75% less than him. I SAY WHO CARES. if i can get cheap clearing and save 12k amonth for 2 years over bright's commissions thats 240k. my clearing house is sipc insured so i could care less if they go under. i'll move to the next clearing firm. second don and you have painted all llc's as almost shady and can't stay in business. i disagree 100%. if a huge llc pays .0005 a share and charges rates of .0025 to its traders and does 300 mil shares a month thats 600k a month of profit before expenses.who the hell's going out of business on that. all the llc does is provide leverage which has no real cost and a few offices and maybe 10 employees to run it all as 50% are more of most llc's are remote. ok i put down 5-15k and i save 140k a year over a more outstanding broker. if my llc goes under i lose my 15k. AGAIN WHO CARES I SAVED 100'S OF THOUSANDS OF $'S.one last questions. many people on et's strategies to make money trading encompasses rapid fire in and out.who's to say its worse than intraday swing trading are pair trading? for those traders the evidence of lower commissions can't be debated
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becoming your own broker dealer
- Thread starter Sky123987
- Start date
...You know...I only try to give some reall true info and insight here and instead i get dumb ass guys like you who know nothing of the industry making up shit as they go along...where shall we start?
1) Have you ever heard of pink sheet/BB stocks??? Have you ever looked at the volumes some of these stocks trade??? Many of these stock certs come in hundred million share and even BILLION share increments...I once fined a trader becuase he traded almost 4oo million shares in oned day of some diamond stock ( we actually were short at one point the .00004 stock...
2) you have SIPC? LMFAO......Two things you should red carefully about SIPC before you say ' I Have SIPC"...You may not have SIPC at all....many firms tout " SIPC coverage up to 50 Million"...but you have to read the fine print.....how much in CASH will they cover? Some firms will only have the dditional coverage for equites but not for cash...Also....If you have your money in an LLC...SIPC will treat that as ONE accoutn...for example:
You and 200 traders each have 20k up with an LLC....400k total....if the firm the LLC was at went uder guess how much standared sipc would cover?? 100k in cash for the whole LLC account...since most traders don't hold positions you are mostly in cash.....some firms tout " ADDITIONAL SIPC UP TO 10 MILLION"...but how much additonal in cash????
1) Have you ever heard of pink sheet/BB stocks??? Have you ever looked at the volumes some of these stocks trade??? Many of these stock certs come in hundred million share and even BILLION share increments...I once fined a trader becuase he traded almost 4oo million shares in oned day of some diamond stock ( we actually were short at one point the .00004 stock...
2) you have SIPC? LMFAO......Two things you should red carefully about SIPC before you say ' I Have SIPC"...You may not have SIPC at all....many firms tout " SIPC coverage up to 50 Million"...but you have to read the fine print.....how much in CASH will they cover? Some firms will only have the dditional coverage for equites but not for cash...Also....If you have your money in an LLC...SIPC will treat that as ONE accoutn...for example:
You and 200 traders each have 20k up with an LLC....400k total....if the firm the LLC was at went uder guess how much standared sipc would cover?? 100k in cash for the whole LLC account...since most traders don't hold positions you are mostly in cash.....some firms tout " ADDITIONAL SIPC UP TO 10 MILLION"...but how much additonal in cash????
Quote from john12:
Szeven is correct don's model won't work for people trading big vol. don your traders pay .007 per share for trades less than 1 are 2k shares correct? so if i'm doing 500 shares per trade on 100k shares per day i'm paying $700 a day in commissions? for that i pay .001 a share are $100 a day in commissions. how the hell can i make up 12k a month difference in commissions?don you sat here for along time justifying your rates. how come echo are assent are 1/2 your rates? i can recall bright charging .01 cents a share back in 2001. you've barely lowered your rates in 7 years? others have cut there rates 90%. means you're making huge overides. if you can make people believe executing orders is worth 12k amonth god bless you
I hate to say this, but with the high volume traders we get from other firms, all I can really say is "do you really think they would leave to pay more? Sure, we may not be the cheapest, but when all things are considered, the overall deal attracts many high volume traders who need to use capital and want to take money when they like.
I have traders who trade 20million shares per month, and use $millions of our money and do quite well. There are a lot of mis-perceptions in this industry. Everyone should do their due diligence, we encourage it.
And, yes, I have told some people to "stay where you are if you're really getting that deal." And, yes, I get "low-balled" a lot, and since I know most of the players in the game, and their pricing, I can usually tell.
Heck, some firms even charge for short stock locates, and some don't allow any real use of capital, and some keep your money for 12 months, and some don't "pay" when they should, some keep a profit split, etc. It goes on and on. I get dozens of phone calls every week from new and existing traders, I've heard it all, I enjoy sharing, and I give my honest opinion to everyone. Some may not like what they hear, fortunately most do.
Overall, I am proud of what we have grown, and geez, I think we must be doing "something" right around here, LOL.
We can't please everyone, but we have some of the most successful and serious traders on the planet.
All the best,
Don
Quote from Szeven:
I would love to know what the rate are for a company that does 10 billion shares a month. That would help me understand this all a lot more.
Of course no firm that I know of does that much, and if they did (maybe Goldman), it would make sense to self clear. And, then they have to factor in all the overhead.
Sure, there are economies of scale, but nowhere near what some of the people on ET think. We know exactly what our average price (that we charge) is, and we know our "hard" costs, and heck we keep the tightest ship, overhead wise, of any Firm that I have ever run into. Margins are slim from the commission standpoint. I wish everyone paid anywhere near what we are "rumored" to charge here on ET, LOL.
We trade billions each year, not every month, and our rates are negotiated with Goldman every year, along with other variables that affect our traders. We are all business people, traders and firms. We all have many things to consider in our venture(s).
The other couple of "major" firms are simply corporations with employees running the ship. They have shareholders, not using any of their own money. They may just try to keep "in the black" just to keep their own jobs. We (as a family) only make money if the Firm makes money. No big "salaries" around here, just ask my nieces and nephews, LOL. We do 90% of everything within family at this point. Compliance Officer, her sister, and one accounting type (basically an "in-law" as well).
Don
edit: After readng TM's note about pink sheet stocks, etc. Yes, the number of shares doesn't really mean much in a situation like that.
Quote from Don Bright:
I hate to say this, but with the high volume traders we get from other firms, all I can really say is "do you really think they would leave to pay more? Sure, we may not be the cheapest, but when all things are considered, the overall deal attracts many high volume traders who need to use capital and want to take money when they like.
You occasionally point out that over half your traders have been with Bright for over 7 years. That being the case, you must not be getting many 'high volume' (or lower volume) traders from other firms.
Spin it however you'd like, but vast majority of successful, high volume traders would find your commission rates totally unacceptable. You've been spinning it otherwise for years, but facts are facts. What what it's worth, I average 25-35M shares per month (mostly higher priced NYSE stocks) and am just telling it like it is.
Quote from EricP:
You occasionally point out that over half your traders have been with Bright for over 7 years. That being the case, you must not be getting many 'high volume' (or lower volume) traders from other firms.
Spin it however you'd like, but vast majority of successful, high volume traders would find your commission rates totally unacceptable. You've been spinning it otherwise for years, but facts are facts. What what it's worth, I average 25-35M shares per month (mostly higher priced NYSE stocks) and am just telling it like it is.
that is great...nobody is saying you shouldn't make the best deal possible...when buying a car and all the other dealers are quoting 35k for a car but another dealer advertises a special for just 28k, of course you will check it out....you need to read the fine print, make sure it comes with air and car seats and then make your best choice.....the point i was making was that it may not be the best business model for the dealer to always be the cheapest.....sometimes it works and sometimes it does not.
Quote from john12:
tm answer this. how does a small clearing firm almost taken over by the sipc clear 60 billion shares in a month? all us stock market combined might do total clearing of 120-140 billion shares in a month.then you throw in the top clearers of gs.bsc,leh,mer and on and on and you're telling me some small firm does 1/2the clearing in the us?
One more thing to realize is that for every share traded there are two sides....ex: Bright trader BUYS 1m GOOG...( Goldman will clear the reciept of stock and the payment of $$ to THE OPPOSITE side of the trade, say, Genesis Securities, (penson)who must now deliver the shares through DTC and recieve $$ through DTC...the end result?
One trade for 1000 shares will be reflcted as clearing 1000 shares by both GS and PENSON...
Quote from TM_Direct:
that is great...nobody is saying you shouldn't make the best deal possible...when buying a car and all the other dealers are quoting 35k for a car but another dealer advertises a special for just 28k, of course you will check it out....you need to read the fine print, make sure it comes with air and car seats and then make your best choice.....the point i was making was that it may not be the best business model for the dealer to always be the cheapest.....sometimes it works and sometimes it does not.
I think any serious trader already knows that. But, it might be helpful for the extremely green newbies that don't know any better.
Similarly, you might find that same 35k car, with all the same bells and whistles, being sold at another dealer for $44k. And that dealer might tell you that he's had clients paying those same elevated prices for years, and are happy to do so. Maybe that dealer offers coffee and donuts to the clients waiting to have their car serviced, so you have to look at the 'full package' to see if the added price is worth it. The donuts might be warm and tasty to some, but for me, I'll stick with buying my donuts on my own, and saving money on every car I purchase. In the long run, I know I'll come out <b>way</b> ahead.
.....until something goes wrong and you go back to the dealer and see a for sale sign LOL....Listen, you are correct in everything you say...but as I said earlier....look at all the BROKERS in the tab above....how many have gone under???? Look at E*trde...5.00 trades compared to Merrill, Fidelity et al....and yet E* trade may be under water right now...lots of volume but no profits
Quote from TM_Direct:
.....until something goes wrong and you go back to the dealer and see a for sale sign LOL....Listen, you are correct in everything you say...but as I said earlier....look at all the BROKERS in the tab above....how many have gone under???? Look at E*trde...5.00 trades compared to Merrill, Fidelity et al....and yet E* trade may be under water right now...lots of volume but no profits
I don't believe ETFC's problems are related to their brokerage. It was their mortgage division.