Bright Trading's new payout model

[Shreddog]

Quote from ScottSam:

Wouldn't most high volume guys (2M shares and up monthly) be much better off with an 80/20 split and 0.20/1000 commish anyway ?


Comparing 0.003/100% and 0.0002/80%

2M monthly volume : anything under 28k monthly profits and you're better off with 0.0002/80%.

4M monthly volume (let's mark it down to 0.002 for the 100% model): anything under 36k monthly profits and you're better off with 0.0002/80%.

6M monthly volume : the b/e point is over 52k.

You can imagine that as volume goes up, so does the breakeven point.
Most traders doing that kind of volume aren't over those b/e points.

So most (90%) traders doing over 1M volume per month are way better off with a 80% payout and 0.20/1000 model.

Some problems with your analysis:
1) His commission has not changed with the 80/20 payout change. You pay the same at the new 80% payout as you did at 100%. There's no "choice" - you either take 80/20 at the old commission rate or leave it. Don has yet to correct me on this statement, so I must assume that's true.

2) Don's rates are .005 for the first 1000, .003 for the rest on any given ticket. A lot of high volume automated traders don't trade more than 1000 shrs/order and therefore would be paying .005 all the time.

3) Perhaps his rates are lower for higher volume traders, he says they are but he doesn't divulge his breakpoints. Regardless, high volume traders can get better rates and keep 100% of the profits retail as Don has already conceded.

 

[NKNY]

Quote from yobo:

one question no one asked is how can this sub account/jvc program be no risk and all profits?

Don seems to make it sound like they open a second account for you and out of the goodness of their heart they will trade your money, no risk of course and split the profits.


Does this sound about right? Just curious. There are no free lunches and this so called JVC program seems a bit sketchy especially when you hear the words "no risk." There must be a rub somewhere.

No there is a 50 % profit split on the JVC account but you have no risk I believe for the first 10k or 5 k

 

[Don Bright]

Let's try this again. Trader has "normal" trading account. Trader may (about 170 have) open a second account with no downside risk. They run an automated program (let it run in the background)...do the homework, set parameters, listen in to mentoring meetings, work with my brother etc. - and keep half the profits. Commissions are automatically lower than standard, and every $10K made, you take out half....each time you take out $10K, your commish goes down. You can use all this help and mentoring to run the same program in your "normal" account too.

Seems to be well received and working. You must qualify, know computers, excel etc. - pass the JVC manager interviews that we put together.

Not a "free lunch" - no "hangers on" - you gotta do some work, but hey, it takes work to make money.

Don

Quote from yobo:

one question no one asked is how can this sub account/jvc program be no risk and all profits?

Don seems to make it sound like they open a second account for you and out of the goodness of their heart they will trade your money, no risk of course and split the profits.


Does this sound about right? Just curious. There are no free lunches and this so called JVC program seems a bit sketchy especially when you hear the words "no risk." There must be a rub somewhere.

 

[Midas]

Quote from yobo:

one question no one asked is how can this sub account/jvc program be no risk and all profits?

Don seems to make it sound like they open a second account for you and out of the goodness of their heart they will trade your money, no risk of course and split the profits.


Does this sound about right? Just curious. There are no free lunches and this so called JVC program seems a bit sketchy especially when you hear the words "no risk." There must be a rub somewhere.

It is a traditional prop deal with 50-50 split. They have a stat arb group that is very profitable that trains these traders. What is sketchy about that?

 

[yobo]

How is it risk free? Do you have to maintain a certain balance? Why not just deposit 5k with you into the house account and you trade it and split the profits? Treat it like a CD and offer investors a guaranteed rate of return....

 

[businessstaxes]

The risk is the trader who lose the firm's money or don't make profit for the firm gets fired. and these true prop firms mostly have HFT are automated trading systems these firms are always looking for people with programming 70% of trades in the exchange is automated....as for traders(clerks)(customer service) on salary they are order takers of clients.

Quote from NKNY:

No there is a 50 % profit split on the JVC account but you have no risk I believe for the first 10k or 5 k

 

[Midas]

Quote from yobo:

How is it risk free? Do you have to maintain a certain balance? Why not just deposit 5k with you into the house account and you trade it and split the profits? Treat it like a CD and offer investors a guaranteed rate of return....

Say you have 20k in your regular trading account. Then assume you blow up in the JVC (50 - 50 split) account. Bright takes the loss not you. You do not lose any of your deposit.

It is a true prop. account. The only catch is that you need to be a member of the firm and use the stat arb strategy and automation that they use.

 

[Don Bright]

Quote from businessstaxes:

The risk is the trader who lose the firm's money or don't make profit for the firm gets fired. and these true prop firms mostly have HFT are automated trading systems these firms are always looking for people with programming 70% of trades in the exchange is automated....as for traders(clerks)(customer service) on salary they are order takers of clients.

If the trader loses too much in the JVC account, they simply continue to trade their "normal" account - hopefully taking some fo the "good stuff" from their JVC trading to help make money.

It seems so simple to us, but as I am seeing from all the questions it may not be to everyone - so thanks everyone for asking the questions, hopefully more of you will take part.
Don

 

[risktaker]

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.

Why can't Bright tell Goldman to go screw themselves, anyway?

Either clear themselves or use somebody else?

Are you saying that Bright's business model is entirely dependent on Goldman's wishes?

 

[yobo]

I'm sorry I'm not clear on this but let me summarize my understanding. I open a bright account for 20k and elect to open a second account. Bright gives me 5k of risk capital to learn their automated strategies for openings and pairs. Therefore if I lose the 5k, it's bright's loss and I still have the 20k in my trading account?

Quote from Don Bright:

Let's try this again. Trader has "normal" trading account. Trader may (about 170 have) open a second account with no downside risk. They run an automated program (let it run in the background)...do the homework, set parameters, listen in to mentoring meetings, work with my brother etc. - and keep half the profits. Commissions are automatically lower than standard, and every $10K made, you take out half....each time you take out $10K, your commish goes down. You can use all this help and mentoring to run the same program in your "normal" account too.

Seems to be well received and working. You must qualify, know computers, excel etc. - pass the JVC manager interviews that we put together.

Not a "free lunch" - no "hangers on" - you gotta do some work, but hey, it takes work to make money.

Don