What do you mean just like income tax? I don't pay taxes every month when I take profits out. What do you mean by monthly calculations? It seems like it's very straightforward. A guy makes 10k this month and takes it out, you take out 2k. Isn't that a monthly calculation? What are these criminal calculations that you refered to?
Bright Trading's new payout model
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What do you mean just like income tax? I don't pay taxes every month when I take profits out. What do you mean by monthly calculations? It seems like it's very straightforward. A guy makes 10k this month and takes it out, you take out 2k. Isn't that a monthly calculation? What are these criminal calculations that you refered to?
What many firms do with "splits" is say you make 10K in January, take out 2k, give you 8K. Then you lose 10K in Feb, and the trader eats all the losses etc. That's what I mean by calculations.
And, all of our traders are fine at this point. As I have said, we'll hopefully work all this out.
And, you should pay your quarterly taxes Mav, LOL. My point was aimed more at the people with a "paycheck" having withholding etc.
How do you guys do your split? Do you do it monthly or annually? Just curious.
Don
Would it be easier if simply 20% of all profits made are simply blocked from being withdrawn so whether you withdraw monthly, weekly or completely randomly you always know how much is available for withdrawal and how much is blocked?
Question is, can you use those blocked funds (20% of accumulated profits) for other purposes before the end of the year when it is taken from your account?
[EDIT: Ignore this one, I missed the previous posts covering this point already]
Question is, can you use those blocked funds (20% of accumulated profits) for other purposes before the end of the year when it is taken from your account?
[EDIT: Ignore this one, I missed the previous posts covering this point already]
If a trader makes 10k and gets 8k, gives 2k to the firm. Then next month trader loses 10k. It's the firm that eats the 10k Don, not the trader. I have friends that work at just about every prop firm here in Chicago and that is the standard model and it's not criminal. In fact, if anything, it's unfair to the firm. They take all the risk.
True, now the trader has a high water mark he has to get to in order to get paid out again, but it's the firm that is absorbing the risk, not the trader. Unless there is something I am not understanding here.
Our payout is taken end of year.
Edit: I'm refering to a true prop model. Maybe that is where we diverge here. The trader has no risk in the example I am giving.
Currently, CBSX firm members do not require a series 7 license to trade, only the standard FBI background check and U4 filing.
SEC requires a one year lock-up on capital contributions, as many of the CBSX firms are highly levered. That's why firms can get traders started for much less of a capital contribution (around 5k) while still offering plenty of buying power, as the firm gets portfolio margin which they can allocate to their traders.
With all the regulatory changes/issues, who knows what will happen next!
exactly how much are CBSX firms 'highly levered' and what are you basing this statement on?
propseeker:
Go to the SEC.gov site and pull up the .pdf of the most recent "focus report" under the search engine. You simply have to type in the name of the firm.
Here is the link for your convenience:
http://sec.gov/search/search.htm
If the firm doesn't have the latest focus report on the SEC site, then you can ask them for it directly. CBSX firms only require 100k in net capital as per SEC, a drop in the bucket for Bright, lol!
Thanks ScalperJoe.
Comparing Focus report, BT stands way way way above compare to others.
It is just matter of time when this 80-20 issue will start affecting other firms under FINRA. Not sure of the CBSX model. But why would they stay away from such regulation in the long run? Ultimately they are also answerable to somebody.
BTs and other props of the world has to evolve/adopt with different business model.
On the positive note, because BT got affected earlier, it will give them head start.
Comparing Focus report, BT stands way way way above compare to others.
It is just matter of time when this 80-20 issue will start affecting other firms under FINRA. Not sure of the CBSX model. But why would they stay away from such regulation in the long run? Ultimately they are also answerable to somebody.
BTs and other props of the world has to evolve/adopt with different business model.
On the positive note, because BT got affected earlier, it will give them head start.
Quote from Sun Light:
Thanks ScalperJoe.
Comparing Focus report, BT stands way way way above compare to others.
It is just matter of time when this 80-20 issue will start affecting other firms under FINRA. Not sure of the CBSX model. But why would they stay away from such regulation in the long run? Ultimately they are also answerable to somebody.
BTs and other props of the world has to evolve/adopt with different business model.
On the positive note, because BT got affected earlier, it will give them head start.
You're probably correct, "why would they stay away from such regulation in the long run?" I would not be surprised if there is eventually some type of uniform standard among all the prop firms who currently require capital contributions from its traders.
Perhaps the SEC only wants the "true" model to survive, where the prop firm pays an initial salary, offers training without charging, and then traders use firm capital and share in the profits, whereby the firm absorbs any losses.
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