Bright Trading's new payout model

[Maverick74]

Quote from Don Bright:

I agree with starting with the OTC.

We can hopefully agree to disagree in that I honestly feel that exchange members, traders, and others who risk their money providing liquiditiy should at least be offered an equal playing field to those who don't.

A MM, DPM, whatever has certain "rights" but also have certain responsiblities to maintain markets etc. I have no problem with these guys. The fact that sub-pennies are being used is no big deal either....as long as everyone trades in the same denomination.

I never thought bullets were "bad" or illegal, simply a tool that we could use, again, no big deal. But if you were invited to a poker game, put up your money, and then were only dealt 4 cards instead of 5, or the guy sitting next to you could see the cards dealt and you couldn't.....well, you get my drift.

And I agree that "mom and pop" investors shouldn't care...as they shouldn't care about a transaction tax, but I think a pretty big part of our industry cares, don't you?

Of course "where you stand depends on where you sit" on these issues.

All the best Mav!

Don

Don, James Simmons was asked this question on CNBC and I thought his answer was fair. He said, trading is about speed and information. Those that are willing to pay for it and build the software and use their own resources to do that, should have an advantage. That is how trading works.

I really don't feel we are liquidity providers Don although I know that is the running joke when a trader tries to defend his value in the real world to the common public. The fact is we are leaches, all of us. And each leach is trying to get the money on the ground before the other guy. If you are willing to spend 30 million for the software and staff to do what Simmons does, then by all means write the check. But you can't fault other firms for spending massive amounts of money and hours of labor to get a leg up on the competition.

Now if the government was granting this advantage through connections to special firms, then I would be all for a level playing field. Of course Don, you and I both know many firms in this country have tremendous political benefits and that is certainly something to complain about. But not when firms risk their own capital to better their business and get a leg up on everyone else.

As far as bullets go, Don they were illegal. The SEC actually stated they were. There was nothing legal about me being able to sell all the stock I wanted on a downtick while John Q Public has a market order to sell that is not getting executed because you and I are hitting every bid all the way down and not letting an uptick happen. That is the most blatant and illegal practice I think ever to come to pass in trading.

 

[Maverick74]

Quote from Dustin:

The point is that nobody cares about the OTC market. Our markets are supposed to be the best in the world and many businesses rely on that consistency and reliability every day. The current structure is fine for normal trading days, but when the shit hits the fan there's nobody left to provide any sort of liq because they're all out of business. That matters to everyone, not just daytraders. Investors don't trust the markets <u>due to market structure</u>.

Dustin I'll take the other side of that. I would argue we need more flash crashes. In fact we need more crashes, more consequences. We seem to live in a riskless society. Can't pay your mortgage? No problem. Lost all your money in the stock market? No problem sue. The stock market is down today, no problem we'll print more money and prop it up. Can't pay your credit cards? No worries, just declare bankruptcy. Bank is about to go under? No problem, we'll bail them out with tax payer money.

Dustin, the biggest problem I see in our society is that nobody ever loses. One way or another we bail, print or subsidize every problem we have. We need flash crashes, stock market crashes, we need banks to go under.

The irony is this Dustin, the very thing you think we should avoid is the very reason the vix is going to 10 and putting every daytrader of stocks out of business due to the lack of volatility. By keeping the crashes in the system and the vix pumped, ironically you would make a much better living. Quiet poetic isn't it?

 

[Don Bright]

Quote from Maverick74:

Don, James Simmons was asked this question on CNBC and I thought his answer was fair. He said, trading is about speed and information. Those that are willing to pay for it and build the software and use their own resources to do that, should have an advantage. That is how trading works.

I really don't feel we are liquidity providers Don although I know that is the running joke when a trader tries to defend his value in the real world to the common public. The fact is we are leaches, all of us. And each leach is trying to get the money on the ground before the other guy. If you are willing to spend 30 million for the software and staff to do what Simmons does, then by all means write the check. But you can't fault other firms for spending massive amounts of money and hours of labor to get a leg up on the competition.

Now if the government was granting this advantage through connections to special firms, then I would be all for a level playing field. Of course Don, you and I both know many firms in this country have tremendous political benefits and that is certainly something to complain about. But not when firms risk their own capital to better their business and get a leg up on everyone else.

As far as bullets go, Don they were illegal. The SEC actually stated they were. There was nothing legal about me being able to sell all the stock I wanted on a downtick while John Q Public has a market order to sell that is not getting executed because you and I are hitting every bid all the way down and not letting an uptick happen. That is the most blatant and illegal practice I think ever to come to pass in trading.

I read bullets as simply "early exercised" puts giving me stock.
However- I think of some of this disparity (not speed, speed is and will always get "speedier")... similarly to "insider trading" - where some have access to the "information" (as you call it) and others don't. We've always rewarded those who work hard or pay for info (I have people who have spents zillions with programs to dissect thousands of news stories, looking for keywords etc. for years...they paid and worked hard for this edge that was open to everyone)....but when even I, as a broker dealer, cannot place sub-penny orders, well that just seems wrong to me, sorry.

I'll be in Chicago next month, I'll PM you the dates, we'll get together and chat - and I would welcome meeting some of your friends who are in the HFT business, as always, I'm willing to learn.

edit: regarding VIX, isn't the historical vol about 12 anyway? I totally understand the "daytraders" need or desire for higher vol, but we've done ok with lower VIX numbers in the past.

Don

 

[Maverick74]

Quote from Don Bright:

I read bullets as simply "early exercised" puts giving me stock.
However- I think of some of this disparity (not speed, speed is and will always get "speedier")... similarly to "insider trading" - where some have access to the "information" (as you call it) and others don't. We've always rewarded those who work hard or pay for info (I have people who have spents zillions with programs to dissect thousands of news stories, looking for keywords etc. for years...they paid and worked hard for this edge that was open to everyone)....but when even I, as a broker dealer, cannot place sub-penny orders, well that just seems wrong to me, sorry.

I'll be in Chicago next month, I'll PM you the dates, we'll get together and chat - and I would welcome meeting some of your friends who are in the HFT business, as always, I'm willing to learn.

edit: regarding VIX, isn't the historical vol about 12 anyway? I totally understand the "daytraders" need or desire for higher vol, but we've done ok with lower VIX numbers in the past.

Don

Regarding bullets, you would have made a good lawyer Don. Maybe you missed your calling in life. You have a way with words.

Let me know when you are in town, I owe you a dinner.

Let me ask you this Don, is it that you feel it's wrong that bothers you on on the sub penny issue, or the fact you can't make money on it. It just seems to me our ethics and values go out in the window as long as we are profiting from it. It always becomes an ethical issue when we are not making money from it.

You are killing me on the bullets though Don. Sometimes I guess we believe what we want to believe so we sleep better at night.

 

[Maverick74]

Quote from Don Bright:



edit: regarding VIX, isn't the historical vol about 12 anyway? I totally understand the "daytraders" need or desire for higher vol, but we've done ok with lower VIX numbers in the past.

Don

No Don, the historical average is in the mid 20's on the VIX. And the last time the VIX was at 12 I remember you guys closing down 10 of your offices all over the country. In fact almost all of them. I guess because "your traders" wanted to work from home.

 

[pairsarbtooo]

Quote from Don Bright:

I read bullets as simply "early exercised" puts giving me stock.
However- I think of some of this disparity (not speed, speed is and will always get "speedier")... similarly to "insider trading" - where some have access to the "information" (as you call it) and others don't. We've always rewarded those who work hard or pay for info (I have people who have spents zillions with programs to dissect thousands of news stories, looking for keywords etc. for years...they paid and worked hard for this edge that was open to everyone)....but when even I, as a broker dealer, cannot place sub-penny orders, well that just seems wrong to me, sorry.

I'll be in Chicago next month, I'll PM you the dates, we'll get together and chat - and I would welcome meeting some of your friends who are in the HFT business, as always, I'm willing to learn.

edit: regarding VIX, isn't the historical vol about 12 anyway? I totally understand the "daytraders" need or desire for higher vol, but we've done ok with lower VIX numbers in the past.

Don

Yes I have to agree. Don can't place sub penny orders. I am also licensed but with another prop firm and can't place sub penny orders.

Im curious...who gets to place sub penny orders? Is it time to change trading structure for me again, because i want in..

 

[erierambler]

Here's a link to Dennis Dick on Cnbc today

http://www.cnbc.com/id/15840232?video=1592091236&play=1

 

[tradingjournals]

Quote from Maverick74:

No Don, the historical average is in the mid 20's on the VIX. And the last time the VIX was at 12 I remember you guys closing down 10 of your offices all over the country. In fact almost all of them. I guess because "your traders" wanted to work from home.

Mav:

A retired fund manager I interacted with recently informed me that a prop firm is offering accounts with no deposits. Do you think it really is possible? What is the catch if any?

I visited ( http://www.vtradergroup.com ) ,and I have some questions. Could I ask them here or does it have to be in PMs?

 

[Maverick74]

Quote from tradingjournals:

Mav:

A retired fund manager I interacted with recently informed me that a prop firm is offering accounts with no deposits. Do you think it really is possible? What is the catch if any?

I visited ( http://www.vtradergroup.com ) ,and I have some questions. Could I ask them here or does it have to be in PMs?

Of course it's possible. There are many prop firms in Chicago that fully back traders. I think I have stated that already on this thread. But you better fit into the box they are looking for.

Firm questions should be directed to PM.

 

[Dustin]

Quote from Maverick74:

Dustin I'll take the other side of that. I would argue we need more flash crashes. In fact we need more crashes, more consequences. We seem to live in a riskless society. Can't pay your mortgage? No problem. Lost all your money in the stock market? No problem sue. The stock market is down today, no problem we'll print more money and prop it up. Can't pay your credit cards? No worries, just declare bankruptcy. Bank is about to go under? No problem, we'll bail them out with tax payer money.

Dustin, the biggest problem I see in our society is that nobody ever loses. One way or another we bail, print or subsidize every problem we have. We need flash crashes, stock market crashes, we need banks to go under.

The irony is this Dustin, the very thing you think we should avoid is the very reason the vix is going to 10 and putting every daytrader of stocks out of business due to the lack of volatility. By keeping the crashes in the system and the vix pumped, ironically you would make a much better living. Quiet poetic isn't it?

I'm not one for arguing for the sake of argument, so I'll just stand by my side.