Bright Trade

[goldenarm]

Quote from Maverick74:

There is a reason why most stock firms have gone the way of the dinosaurs. Bright Trading is still in business today for better or worse because of pair trading.

Pair trading is too complex a strategy for beginning traders. Most stock firms have gone the way of the dinosaurs because prop daytrading is no longer a lucrative occupation and these firms failed to replenish the traders that left.

Bright is still in business because they have a huge marketing push and aggressively recruit newbies via their travelling road show. No other firm does this (except for another Las Vegas operation, www.bettertrades.com, but they focus on pushing their training). In addition, Bright's commission rates are the highest in the industry. That's why they're still around, NOT because of pair trading.

 

[goldenarm]

Quote from Maverick74:

There is a reason why most stock firms have gone the way of the dinosaurs. Bright Trading is still in business today for better or worse because of pair trading.

Pair trading is too complex a strategy for beginning traders. Most stock firms have gone the way of the dinosaurs because prop daytrading is no longer a lucrative occupation and these firms failed to replenish the traders that left at a fast enough rate to grow their trader base. Over the past five years, they just dwindled down to nothing.

Bright is still in business because they have a huge marketing push and aggressively recruit newbies via their travelling road show. They are very involved in advertising through local schools, magazines, internet forums, etc. This way they can continue to grow their trader base despite the industry's high attrition rate.

Bright has a great website domain name (stocktrading.com) although they don't know how to make money from it (have you seen their $50 website complete with typos? LOL). Despite their amateur marketing presence, no other prop firm comes close in marketing (except for another Las Vegas operation, www.bettertrades.com, but they focus on pushing their training).

In addition, Bright's commission rates are the highest in the industry. Coupled with a steady influx of newbies from their marketing efforts, their balance sheet is one of the healthiest in the the field. That's why they're still around, NOT because of pair trading.

 

[ratboy88]

Quote from goldenarm:

Pair trading is too complex a strategy for beginning traders. Most stock firms have gone the way of the dinosaurs because prop daytrading is no longer a lucrative occupation and these firms failed to replenish the traders that left at a fast enough rate to grow their trader base. Over the past five years, they just dwindled down to nothing.

Bright is still in business because they have a huge marketing push and aggressively recruit newbies via their travelling road show. They are very involved in advertising through local schools, magazines, internet forums, etc. This way they can continue to grow their trader base despite the industry's high attrition rate.

Bright has a great website domain name (stocktrading.com) although they don't know how to make money from it (have you seen their $50 website complete with typos? LOL). Despite their amateur marketing presence, no other prop firm comes close in marketing (except for another Las Vegas operation, www.bettertrades.com, but they focus on pushing their training).

In addition, Bright's commission rates are the highest in the industry. Coupled with a steady influx of newbies from their marketing efforts, their balance sheet is one of the healthiest in the the field. That's why they're still around, NOT because of pair trading.

the reason most stock firms went south is pennies.. NO IFS, ANDS, OR BUTS ABOUT IT. bright is still around because bob is worth 9 figures. dont kid yourself, they took some big hits on those offices that went dry.

 

[nlslax]

Quote from ratboy88:

the reason most stock firms went south is pennies.. NO IFS, ANDS, OR BUTS ABOUT IT. bright is still around because bob is worth 9 figures. dont kid yourself, they took some big hits on those offices that went dry.

Would you say that is the primary reason they stopped promoting the multi office idea, and took the listing of branch offices off of their website?

 

[Don Bright]

Quote from nlslax:

Would you say that is the primary reason they stopped promoting the multi office idea, and took the listing of branch offices off of their website?

Rather than speculate, why not just ask? I'm always glad to share when I can.

Back in the 1990's, it would cost us $20K per month for dedicated T-1 lines, etc. for connectivity, so the offices made sense. As technology improved, more and more traders wanted to trade from home with a $50 cable modem or DSL. So, as the leases came due (big expensive leases at that), we simply asked the traders whether they would like to trade from home or not, most did. I wish I could claim that this was "excellent business planning" on our part, it was just how things worked out.

(If anyone cares, offices: 2 in SoCal, 2 in NoCal, 3 in BC, Las Vegas, Chicago, Detroit, Herndon, Scottsdale....plus the affiliates who prefer to stay under the radar, LOL).

When SLK/GS was paying our office rents in NYC, we didn't mind staying there either...but (especially after 9/11)...when GS moved out of their Broadway offices, so did we....no need to pay exhorbitant rents when most guys traded from home.

"Pennies" ...hmm, well....as one door closes another opens...with tight spreads we could do more with pairs....and do "more units" lower volatility means more predictability....so easier and safer to trade. Not so much the "video game" keyboarding trying to scalp...and more "outside enveloping" capturing price improvement. The old "adapt or die" trading changes.


Thanks for the intrest.

Don

 

[Maverick74]

Did Don skip over all my posts? Hmm.

I guess there was nothing to refute.

 

[Maverick74]

Quote from ratboy88:

ok... this is starting to irritate me. mav... define churning? i want actually parameters. what pairco is doing, i dont consider churning.

OK, I'll try to define churning. When I traded in NY, my mentor told us that you want to keep your commissions to 35% or less of your gross. So if you made $1,000 gross today, you want to net at least $650. If more then 35% of your gross is going towards commissions, you are probably churning. Again, I don't have access to Don's numbers, but I would bet that most of his pair traders are paying more then 50% of their gross to commissions.

 

[ratboy88]

Quote from Maverick74:

OK, I'll try to define churning. When I traded in NY, my mentor told us that you want to keep your commissions to 35% or less of your gross. So if you made $1,000 gross today, you want to net at least $650. If more then 35% of your gross is going towards commissions, you are probably churning. Again, I don't have access to Don's numbers, but I would bet that most of his pair traders are paying more then 50% of their gross to commissions.

ok.. fair enough. but lets say you are paying half your gross in commish but still netting $700 a day, then i say let me churn. if they are paying 35% in commish vs their gross then that is a win win for all in my opinion.

 

[foible]

Quote from Maverick74:

Again, I don't have access to Don's numbers, but I would bet that most of his pair traders are paying more then 50% of their gross to commissions.

I'll try to find the post, but I remember Don saying that his most profitable traders average 0.02/share overall. Even at Bright's best rates, they must be giving a lot back in comissions.

 

[Maverick74]

Quote from foible:

I'll try to find the post, but I remember Don saying that his most profitable traders average 0.02/share overall. Even at Bright's best rates, they must be giving a lot back in commissions.

If that is true then they are definitely churning. Although that number seems very low. If their best guys are only making .02 a share, they are marginally profitable at best.