Bright Trading's new payout model

[CQNC]

I think Mav is doing/trying one helluva sandbagging job on DB for some reason, probably to draw in more traders to his biz, or has some motive for tearing DB apart here, because any moron can figure out what DB is explaining is not that complicated, the math is correct, if not fair. Everyone pays the standard overnight rate on capital, everyone pays the money market rate, everyone pays the margin rates near prime. Any idiot can do the math on what it's costing and what their break-even points are.

DB isn't wrong on this one. You're trading with his capital, you're paying him for the privilege, and you better be profitable or go trade for Mav instead where I'm sure his deal is much better.

DB probably has a lot of money and time invested with accountants and lawyers that I am sure are (including myself) better-qualified to advise him as to the best path and structure for his business than Mav (despite his ego fooling him otherwise, I'm sure) and most of the membership of ET.

Considering the rules of the game are changing for everyone, Mav should probably STFU and worry about his own business instead of everyone else's.

And no, that's not me sticking up for DB, DB can handle himself. This is me telling Mav to stop talking shit and start backing it up or MHOB. It's getting tiring reading his updates, as I'm sure is everyone else.

Quote from Maverick74:

I know you've gone over this a few times but when you said 1/4 your normal haircut charges that implies 12% annual interest. I see that is only on 30 to 1 leverage. Can you double check my math on this.

If someone has a 20k account and you give them 600k in leverage (30 to 1) at 12% interest, that's about 600k a year in interest charges right? Assuming they held that amount of capital every night for a year. And that means they need to make 3000% a year to break even on their trading? I think my math is off somewhere so can you walk me through it.

Now on the 15 times leverage for 4%, say you have a 20k account which would give you 300k in capital. At 4% interest, you would need to earn 60% on your trading to breakeven right?

 

[Maverick74]

Quote from CQNC:

I think Mav is doing/trying one helluva sandbagging job on DB for some reason, probably to draw in more traders to his biz, or has some motive for tearing DB apart here, because any moron can figure out what DB is explaining is not that complicated, the math is correct, if not fair. Everyone pays the standard overnight rate on capital, everyone pays the money market rate, everyone pays the margin rates near prime. Any idiot can do the math on what it's costing and what their break-even points are.

DB isn't wrong on this one. You're trading with his capital, you're paying him for the privilege, and you better be profitable or go trade for Mav instead where I'm sure his deal is much better.

DB probably has a lot of money and time invested with accountants and lawyers that I am sure are (including myself) better-qualified to advise him as to the best path and structure for his business than Mav (despite his ego fooling him otherwise, I'm sure) and most of the membership of ET.

Considering the rules of the game are changing for everyone, Mav should probably STFU and worry about his own business instead of everyone else's.

And no, that's not me sticking up for DB, DB can handle himself. This is me telling Mav to stop talking shit and start backing it up or MHOB. It's getting tiring reading his updates, as I'm sure is everyone else.

Chill out guy. No one is sandbagging Don here. My questions are valid and most of them deal with the prop industry as a whole, not just Bright Trading. I have a buddy that paid 1k to attend his training and is considering his firm. I'm trying to clarify a few of the things I told him to correct them if I was wrong. I thought the questions would benefit other traders so I posted them on this thread vs asking Don in private. Don can handle himself just fine, he doesn't need you to come on here and act like ass on his behalf.

Bright Trading and my firm are not even competitors. We don't really cater to the ET community because of our capital requirements. We have totally different business models and Don knows this and this is specifically why he throws a bone out to my firm and speaks so highly of us.

Every question I've brought up on this thread is completely valid and important to discuss. If you don't like this thread, why are you reading it? I just never understood the idea behind someone complaining about a thread they don't have to read.

So if you want to attack me, go ahead. I'm going to keep it civil and act like an adult. You have a right to act how you want to so go right ahead.

 

[DHOHHI]

Quote from CQNC:

I think Mav is doing/trying one helluva sandbagging job on DB for some reason, probably to draw in more traders to his biz, or has some motive for tearing DB apart here, because any moron can figure out what DB is explaining is not that complicated, the math is correct, if not fair. Everyone pays the standard overnight rate on capital, everyone pays the money market rate, everyone pays the margin rates near prime. Any idiot can do the math on what it's costing and what their break-even points are.

DB isn't wrong on this one. You're trading with his capital, you're paying him for the privilege, and you better be profitable or go trade for Mav instead where I'm sure his deal is much better.

DB probably has a lot of money and time invested with accountants and lawyers that I am sure are (including myself) better-qualified to advise him as to the best path and structure for his business than Mav (despite his ego fooling him otherwise, I'm sure) and most of the membership of ET.

Considering the rules of the game are changing for everyone, Mav should probably STFU and worry about his own business instead of everyone else's.

And no, that's not me sticking up for DB, DB can handle himself. This is me telling Mav to stop talking shit and start backing it up or MHOB. It's getting tiring reading his updates, as I'm sure is everyone else.

Gotta agree with you. Not sure what he doesn't comprehend.

And when Don suggested they talk offline here was Mav's reply:

"Don I'll chat with you when I have some downtime. Really busy with a lot of stuff though."

Busy being obsessed with this thread perhaps. LOL.

 

[Don Bright]

Quote from Maverick74:

Can you double check my math on this.

If someone has a 20k account and you give them 600k in leverage (30 to 1) at 12% interest, that's about 600k a year in interest charges right? you would need to earn 60% on your trading to breakeven right?

$600K x 12% = $72K per year not $600K

But actually even less since. Once again...

6 times = zero so $120K = zero.
6-10 = 2% next $80k = $1600 total per year.
10-15 = 4% etc. Scaling up. $100K = $4k for a total of $5,600 per year on 15 times equity. And, that's where we start to slow people down, but some do use 30 or more IF they're making money with it.

To the others - I don't even know what John offers his people so I don't know for sure even if he is trying to "make a better deal" or not - ok if he is, I just don't know.

To all the PM's and emails - Thanks, I always appreciate the support - it goes a long way....and I'll get back to you when I get back in the office - give me a coujple of days to get caught up - and, I really don't think Mav is hassling me, and I'm pretty sure his business model is much different.

Don

 

[Maverick74]

Quote from Don Bright:

$600K x 12% = $72K per year ?

But actually even less since. Once again...

6 times = zero so $120K = zero.
6-10 = 2% next ?$80k = $1600 total per year.
10-15 = 4% etc. Scaling up. $100K = $4k for a total of $5,600 per year on 15 times equity. And, that's where we start to slow people down, but some do use 30 or more IF they're making money with it.

Don

Thanks Don. I had a typo in there. I guess the other guys didn't catch it. Not surprising. So in your example on a 20k account, the trader would have to make about 25% a year to breakeven.

I guess these guys don't realize that every firm actually calculates their haircut differently. Haircut by the way is different then credit and debit interest. A lot of guys don't understand that either. No two firms calculate their capital charges the same way.

Don I take it then most your traders actually use less then 15 to 1 leverage then? You always throw out the phrase "use millions of our capital" with 20k accounts. I must have misunderstood that. My bad.

 

[Don Bright]

Quote from Maverick74:

Thanks Don. I had a typo in there. I guess the other guys didn't catch it. Not surprising. So in your example on a 20k account, the trader would have to make about 25% a year to breakeven.

I guess these guys don't realize that every firm actually calculates their haircut differently. Haircut by the way is different then credit and debit interest. A lot of guys don't understand that either. No two firms calculate their capital charges the same way.

Don I take it then most your traders actually use less then 15 to 1 leverage then? You always throw out the phrase "use millions of our capital" with 20k accounts. I must have misunderstood that. My bad.

Many do for the openings, "a good chunk" do during the day with their basket programs - a "few" do overnight - but most are pretty smart guys who understand risk reward, and keep things in the reasonable zone. We know that "cowboys" don't generally last too long, LOL. The capital is there if they "earn" the right to use it, understand the costs and the risk reward etc.

I think we can put all this to rest now...we have been really fortunate by having good traders and working with them and the newer people to get better. No "blue sky" from me, it's tough, and takes work to do well in this business - regardless of all the details.

Gotta catch a car back to the San Diego airport - didn't make the finals in the tournament (free JVC, LOL), but made pretty good money in my "normal" playing. LOL.

Don

 

[Szeven]

I personally have enjoyed Mav's posts. Don is very experienced both in the industry and with words, so it takes someone of equal stature to really get a good discussion going. With all the Bright fanboy's and determined haters on ET, this civil discussion has shed some light on information that all prospective and current traders should be happy is out in the open! Thanks to both of you!

 

[byteme]

Quote from Maverick74:

Thanks Don. I had a typo in there. I guess the other guys didn't catch it. Not surprising. So in your example on a 20k account, the trader would have to make about 25% a year to breakeven.

28% on the 20k deposit yes but...

1.87% on the 300k leveraged amount for the year.

If the initial deposit were 50k it would require 0% for the same leveraged amount.

Just thinking aloud here.

 

[CQNC]

OK, I will. I don't think my calling you out makes me childish. I think that's what you're claiming to do to DB, isn't it? Quid Pro Quo.

THIS is why you're sandbagging DB. The truth comes out in the strangest ways.

Sorry, I don't buy your explanation. You're full of shit. You know all this, you claim to be (one of) the most experience, knowleg...blah. blah, blah...traders here, so DB's model should not concern you.

If your "buddy" had a problem with DB, it's probably because he couldn't make the cut, and he isn't smart enough to work through it himself so he has you doing his dirty work.

I can read and reply to any post you or anyone else can, I don't need your permission or endorsement, and I don't have to agree with your or DB or anyone else, and neither do you I.

I'm taking The First on this one, so until you post something intelligent concerning DB's model, yeah, I'm pretty much ignorning it, as should most of us on ET. DB's wasted enough of his time explaining how it works here. Most of us figured it out 30 pages ago...

Quote from Maverick74:

I have a buddy that paid 1k to attend his training and is considering his firm. I'm trying to clarify a few of the things I told him to correct them if I was wrong. I thought the questions would benefit other traders so I posted them on this thread vs asking Don in private.

So if you want to attack me, go ahead. I'm going to keep it civil and act like an adult. You have a right to act how you want to so go right ahead.

 

[Maverick74]

Quote from byteme:

28% on the 20k deposit yes but...

1.87% on the 300k leveraged amount for the year.

If the initial deposit were 50k it would require 0% for the same leveraged amount.

Just thinking aloud here.

I would only look at the expense as it relates to my capital. This is important because a trader has to determine if his strategy is robust enough to overcome the vig.

I'm not sure what you meant by the 50k deposit requiring 0%. It doesn't matter what the numerator is in terms of vig.