So hard to figure then, why they "forced" GS to get rid of their Prop Firm business ....just to start a fund with outside investors.
In any event, I think we have this whole thing under control going forward.
Don
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Bright Trading's new payout model
- Thread starter Maverick74
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So hard to figure then, why they "forced" GS to get rid of their Prop Firm business ....just to start a fund with outside investors.
In any event, I think we have this whole thing under control going forward.
Don
From what I know not many have such model. That is like Utopia.Quote from ScalperJoe:
YPerhaps 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.
Schonfeld is the only other company I know they had true prop model, but the latest at them is not that good either. Retail trading is fine, but it is difficult to "grow" as a trader. I don't mean just the profit, but overall.
Quote from Sun Light:
From what I know not many have such model. That is like Utopia.
Schonfeld is the only other company I know they had true prop model, but the latest at them is not that good either. Retail trading is fine, but it is difficult to "grow" as a trader. I don't mean just the profit, but overall.
Actually, hedge funds do not require traders to contribute capital, that's the risk of the outside investors who are "accredited" and can absorb the risk of loss.
Regarding Don's comment above, I don't think there is anyone on this planet that can "force" the mighty Goldman into "getting rid" of anything. As long as there is appetite for risk, commissions to be generated, and a fiat monetary system, trading with leverage will survive, LOL!
yes, but traders are restricted to a range of tolerable loss on their accounts with the fund, and their compensation is "adjusted" according to their performance, so that loss is limited to protect the fund and it's investors first, the trader second, and if he's in the negative, or takes a major hit during his contract, he's getting canned and no christmas bonus.
personally, i'd put up $200K of my own money to secure my loss downside to the fund on my contract with a billion dollar hedge fund if my upside was ten times that or more. it's perfectly acceptable to my logic that i'm responsible for making or breaking the fund for my part of the total. why shouldn't i be held accountable, and conversely, i'm expect to be well compensated for every dime above and beyond my "salary" and any capital i contribute to the fund as a member.
personally, i'd put up $200K of my own money to secure my loss downside to the fund on my contract with a billion dollar hedge fund if my upside was ten times that or more. it's perfectly acceptable to my logic that i'm responsible for making or breaking the fund for my part of the total. why shouldn't i be held accountable, and conversely, i'm expect to be well compensated for every dime above and beyond my "salary" and any capital i contribute to the fund as a member.
Quote from ScalperJoe:
Actually, hedge funds do not require traders to contribute capital, that's the risk of the outside investors who are "accredited" and can absorb the risk of loss.
Regarding Don's comment above, I don't think there is anyone on this planet that can "force" the mighty Goldman into "getting rid" of anything. As long as there is appetite for risk, commissions to be generated, and a fiat monetary system, trading with leverage will survive, LOL!
second that.
goldman owns the treasury, i'm sure they've already figured workarounds the volcker to make sure, or more likely, ensure goldman makes even more money for the government and itself in the long run.
after all, this is america, not canada we're talking about here.
goldman owns the treasury, i'm sure they've already figured workarounds the volcker to make sure, or more likely, ensure goldman makes even more money for the government and itself in the long run.
after all, this is america, not canada we're talking about here.
Quote from ScalperJoe:
Actually, hedge funds do not require traders to contribute capital, that's the risk of the outside investors who are "accredited" and can absorb the risk of loss.
Regarding Don's comment above, I don't think there is anyone on this planet that can "force" the mighty Goldman into "getting rid" of anything. As long as there is appetite for risk, commissions to be generated, and a fiat monetary system, trading with leverage will survive, LOL!
Quote from Sun Light:
From what I know not many have such model. That is like Utopia.
Schonfeld is the only other company I know they had true prop model, but the latest at them is not that good either. Retail trading is fine, but it is difficult to "grow" as a trader. I don't mean just the profit, but overall.
Here in Chicago there are probably close to 40 "true" prop firms. It's not utopia, it's the norm here. In fact, it's harder to find a deposit prop firm here then a "true" prop firm.
because GS is a bank and a bank should not be gambling billions and exposing economy to systemic risks ie several rogue traders taking bad bets and destroying the entire banking system. Whatever, makes no difference. GS still has their market making business which is trade & make money first, provide liquidity/serve client second.
Do y'all get it now? GS retains it's market making sigma/redi biz by differentiating markt maker and prop trader tho they are essentially doing similar things.
"Specialists were allowed to trade their own accounts with access to all order flow in exchange for taking market making risk being the buyer and seller of last resort". May crash showed these "market makers" are not last resort and not really market makers are they.. "We provide liquidity unless markets crash".
Do y'all get it now? GS retains it's market making sigma/redi biz by differentiating markt maker and prop trader tho they are essentially doing similar things.
"Specialists were allowed to trade their own accounts with access to all order flow in exchange for taking market making risk being the buyer and seller of last resort". May crash showed these "market makers" are not last resort and not really market makers are they.. "We provide liquidity unless markets crash".
Quote from Don Bright:
So hard to figure then, why they "forced" GS to get rid of their Prop Firm business ....just to start a fund with outside investors.
In any event, I think we have this whole thing under control going forward.
Don
This is a moot point. With all the recent issues of defining a market maker (Shumer, HFT, GS), which is how these firms get JBO leverage, seems regulators finally trying to differentiate what a retail trader and a market maker really is. In any event, these firms discussed in the thread use JBO leverage. JBO leverage is what the specialists and OTC market makers were given decades ago to be liquidity of last resort back in the days. Obviously cap up prop traders are not market makers but the loophole has gone on for a long time.
Whatever regulations they pass is irrelevant. Maybe some JBO firms go out of biz, who knows. But there are so many other leveraging strategies out there, that firms use such as equity derivatives that leverage firms 32:1. The business has always been about change and evolution.
Whatever regulations they pass is irrelevant. Maybe some JBO firms go out of biz, who knows. But there are so many other leveraging strategies out there, that firms use such as equity derivatives that leverage firms 32:1. The business has always been about change and evolution.
Quote from ScalperJoe:
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.
Quote from Lights:
because GS is a bank and a bank should not be gambling billions and exposing economy to systemic risks ie several rogue traders taking bad bets and destroying the entire banking system. Whatever, makes no difference. GS still has their market making business which is trade & make money first, provide liquidity/serve client second.
Do y'all get it now? GS retains it's market making sigma/redi biz by differentiating markt maker and prop trader tho they are essentially doing similar things.
"Specialists were allowed to trade their own accounts with access to all order flow in exchange for taking market making risk being the buyer and seller of last resort". May crash showed these "market makers" are not last resort and not really market makers are they.. "We provide liquidity unless markets crash".
Don't get me wrong, I totally understand why GS is doing what they're doing from their side....and that 20 months ago (approx) they quickly "became a bank" when the financial debacle started...they are still some of the smartest, best connected people on the Street. Love them or hate them, don't bet against them.
The liquidity provider smoke screen (LRP's etc.) is subect to the same nightmare form the HFT as everyone else...a different, but hightly relevant point for sure.
Our last Retreat, Aug 1, we had a great follow up presentation from Dennis, our trader who has been doing such a good job of analyzing and lobbying in an effort to level the playing fields again...very optimistic, showed us how such things as "tape reading" (don't laugh, he had great examples) has come back into use big time - setting tickers and tapes to 4 decimial places etc., actually using some of this to our advantage again.
In any event, we're doing our best to keep all our people up to speed, not an easy task...and all is good...but I realize that I am an eternal optimist overall...I like to think "prgrmatic" too...we'll see how all this pans out. Been keeping Bob and I pretty busy, LOL.
Enjoy the weekend everyone...
Don
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