Bright Trading's new payout model

[Don Bright]

Quote from GGSAE:

Yup end of year. If it was month by month I'd probably shut my account down right now, lol! If it gets to the point only profitable traders r left....and for guys that don't make money get the boot.....well there's the new biz model!

End of year, and we're still working on it...


Don

 

[CQNC]

i thought we'd agreed you weren't sandbagging BT here, Maverick.
or was that just temporary, your friend still wants his deposit back?

Quote from Maverick74:

This is the best question that has not been answered yet. When does the 20% come out? If it's at the end of the year, that is much better then if it's on a month to month basis.

And I'm pretty sure Bright will not share in the losses.

 

[ScalperJoe]

Quote from Sun Light:

Let me try to understand this 80/20 better.
We are talking about the 1st account only. Let’s leave JVC out of it for now.
If I deposit 20k with BT .
Scene 1: 1st month, I made 10K profit. Does BT get to keep 2K profit? (immediately or eventually)?
Scene 2: 1st month, If I make a loss of 10K. Does BT absorb 2K loss?
What is it? 100% traders capital, Zero % BT’s loss or 20% BT’s profit?
Then it should be called 80-0-20. Yeah...I still think... "they got you by the balls"

Based on Don's comment that it's end of year, then your scenario would be as follows:

Scene 1: 1st month. If you made 10k, then you would have a liability to Bright for 2k, which could be added/deleted based on your following month's p&l. So Bright could also "lose" its cut of 20% if you lost any gains such that the end of year net was zero.

Scene 2: 1st month. If you make a LOSS of 10k, then my understanding of the model is that your capital contribution is simply reduced by 50% of your original 20k deposit, thus you have 10k left in your balance. No loss to Bright.

The question is: what happens if you want Bright to cut a check if you carry a net monthly gain, would they pay out 80% and book its own gains of 20% intrayear?

 

[Maverick74]

Quote from CQNC:

i thought we'd agreed you weren't sandbagging BT here, Maverick.
or was that just temporary, your friend still wants his deposit back?

That was a good and legitimate question and it does not just pertain to Bright. It's a GS issue!!!!! I wanted to know if GS is directing the protocol in which these payouts have to be dispersed. That is a major issue. If the clearing firms are going to start dictating all the terms of the prop deals then the prop firms are going to have all sorts of problems going forward.

Enough with the sandbagging shit, it's getting old hat. There are some very legitimate issues here that I personally would like to know myself because as others have pointed out, this is going to affect Merrill and Penson soon enough. This will not stop with GS.

 

[Maverick74]

Quote from ScalperJoe:



The question is: what happens if you want Bright to cut a check if you carry a net monthly gain, would they pay out 80% and book its own gains of 20% intrayear?

Another good question. I think what may end up happening is there could be a 12 month capital lockup. This is very common among true prop firms where one is being compensated for performance. In this situation prop firms usually pay the trader a draw on those future gains and then payout the performance at the end of the year. If you lose money then technically the firm is on the hook for the draw amount. I am guessing this is the only way that would work. So traders would have to leave their capital in the firm for 12 months unless they were closing the account or have the firm issue an advance on those profits through the draw. This creates another complication for those that need to pull money out from month to month although it's pretty easy to setup the draw structure.

 

[Don Bright]

Quote from Maverick74:

Another good question. I think what may end up happening is there could be a 12 month capital lockup. This is very common among true prop firms where one is being compensated for performance. In this situation prop firms usually pay the trader a draw on those future gains and then payout the performance at the end of the year. If you lose money then technically the firm is on the hook for the draw amount. I am guessing this is the only way that would work. So traders would have to leave their capital in the firm for 12 months unless they were closing the account or have the firm issue an advance on those profits through the draw. This creates another complication for those that need to pull money out from month to month although it's pretty easy to setup the draw structure.

No lockup of deposit. Draw profits once a week if you like as well.

Don

 

[Don Bright]

Quote from ScalperJoe:

Based on Don's comment that it's end of year, then your scenario would be as follows:

Scene 1: 1st month. If you made 10k, then you would have a liability to Bright for 2k, which could be added/deleted based on your following month's p&l. So Bright could also "lose" its cut of 20% if you lost any gains such that the end of year net was zero.

Scene 2: 1st month. If you make a LOSS of 10k, then my understanding of the model is that your capital contribution is simply reduced by 50% of your original 20k deposit, thus you have 10k left in your balance. No loss to Bright.

The question is: what happens if you want Bright to cut a check if you carry a net monthly gain, would they pay out 80% and book its own gains of 20% intrayear?

Boy, you guys are really giving me good ideas on how to screw traders around, LOL.

If a trader withdraws 8,000, we take 2,000. etc. all year long. At year end, we add up that along with the overall P&L to be sure the split is correct.

We know how some firms recalculate each month, and think it borderlines criminal activity.

Don

 

[Maverick74]

Quote from GGSAE:

Yup end of year. If it was month by month I'd probably shut my account down right now, lol!

Well, technically it is month to month. If you pull money out every month, then the cut gets taken out every month.

 

[Don Bright]

Quote from Maverick74:

Well, technically it is month to month. If you pull money out every month, then the cut gets taken out every month.

Just like your income taxes I guess, LOL. But, if you don't pull it out each month, then we just adjust at year end. I think the guys are worried about the monthly calculations, which we aren't doing.

Don

 

[Sun Light]

can somebody please comment on what is "CBSX market model" and how it may make difference?