Bright Trading's new payout model

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Quote from Maverick74:

I'm curious why Don has not commented yet on Bright Trading moving to an 80% payout model. Not by his choice, but Goldman's.
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I'm not involved with the management side of the industry so this is pure speculation, but bets are these will be common models due the regulatory pressure Robert Green has been hinting at.
 
Quote from Fractal:

I'm not involved with the management side of the industry so this is pure speculation, but bets are these will be common models due the regulatory pressure Robert Green has been hinting at.
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Well, if that's true it will wipe out 90% of the prop firms especially those that clear Goldman. Why give 20% of your profits to Bright when you put up your own capital when you can get full backing and give up 25% to 50% of your profits. I'm guessing Don is going to seriously consider moving his clearing to Merrill.
 
Quote from Maverick74:

I'm curious why Don has not commented yet on Bright Trading moving to an 80% payout model. Not by his choice, but Goldman's.
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Pls elaborate.
 
Quote from cstfx:

Pls elaborate.
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Bright Trading is going to have to give up the 100% payout model. All firms clearing Goldman have to. At most they can give the trader 80% of their profits.
 
Quote from Maverick74:

Bright Trading is going to have to give up the 100% payout model. All firms clearing Goldman have to. At most they can give the trader 80% of their profits.
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seems like a bunch of Bull to me
 
Quote from Maverick74:

It's not bull. We clear GS in one of our JBO's. It's happening.
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Maverick, is there any benefit to the trader to give away 20% of their payout, such as reduced commissions? Better service? ??

Or, is this a move toward making GS uncompetitive?

Thank you,
 
Quote from slacker:

Maverick, is there any benefit to the trader to give away 20% of their payout, such as reduced commissions? Better service? ??

Or, is this a move toward making GS uncompetitive?

Thank you,
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I honestly think it's two things. One, GS is not interested in clearing the mom and pop type prop firms anymore. And two, GS is probably under a lot of pressure to streamline their business due to concerns over regulatory scrutiny.

GS clearing fees are already sky high and GS is not going to get the 20%, Bright will. So GS will not offer anything better then what they are already offering now. Now, will Bright lower their fees? Well, they will be under intense pressure to do that. However that is something they certainly do not want to do. Most these prop traders are not making money, so Don stands little to gain by getting their p&l and then having to give up the sure money he gets from commissions.
 
Quote from Maverick74:

Bright Trading is going to have to give up the 100% payout model. All firms clearing Goldman have to. At most they can give the trader 80% of their profits.
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so where did the 80% figure come from, why not 90, 95 or 98?
 
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