bright vs. echo

BrownianMotion · Nov 20, 2005

Quote from Casey30:

If they are that great, why don't you still trade there?

I didn't say they are "that great." I said (restated for your convenience): "If these are the only two choices, then Bright hands down."

I don't trade there solely because Bright's rates were much higher than what I could get elsewhere.

Szeven · Nov 20, 2005

Quote from joeyata1:

i don't like to be negaitve but your note seems very fishey. here you are saying you make $700k a year trading 400k shares a day and yet you're a prop guy making less than 100% and looking for 750k bp. makes no sense at all. if you made that kind of money you could put 200k down and make100% of payout and pay .002 or so with that type vol.

Depends what he means by gross p/l. With my style of trading i gross 20-30k a month easy, but with fees and payout i only see about 25% of that money in my actual pocket. And that is on 750k bp.

thecycle · Nov 20, 2005

Depends what he means by gross p/l. With my style of trading i gross 20-30k a month easy, but with fees and payout i only see about 25% of that money in my actual pocket. And that is on 750k bp.

exactly...i guess he needs to look up the words "gross" and "net" in the dictionary...with payout and commissions, i only see about 150k a year...i heard that echo can give you 75 to 1 leverage intraday with 100% payout and fees not too much higher than im paying now (2.5 per thou)...just trying to find out what they offer specifically...

Don Bright · Nov 21, 2005

Quote from TradeCobalt:

Don,

I want to come back to Bright and will once you offer a good deal on futures. I can not scale by high frequency trading with just equity.

What is your time line on futures?

Looking forward to that day!

TC

We're trading a great deal of eMini's now...just give me a call.

Don

ChitownECHO · Nov 22, 2005

Quote from Stevedm:

If you only have 20-30k to trade with Bright is the way to go. If you have 100k+ to start with then definately go with Echo trade.

I was also mislead by Rob because when I talked to him intially on the phone he said they allowed 10-20:1 trading but didnt mentioned that it had to be 5:1 overnight. Though I have been profitable the last three months there I have to admit I have had times I missed the ability to hold positions I wasnt able to hold at Echo Trade.

Thats hurt my pairs trading style alot.

Don and Bob know me and So do Ed and the boys at Echo. I have nothing to hide just being honest.

Steve M [/B]

I completely disagree with these statements. I don't leave $100k at ECHO and I get what I need intraday and overnight. As for the overnights, the outline was in the paperwork I signed when I joined the firm. Noone ever tried to hide anything from me here. Whatever firm you choose, I'm sure you'll be fine. Both firms are talked about alot in these forums. Just make sure you go straight to the source for your info. Don't rely on only these posts for your info.

Cre8UrF8 · Nov 26, 2005

Both Echo and Bright are JBO's, which need a minimum of $1 million in assets and because of net capital requirements are limited to a little over 6:1 leverage. So if they only had $1 million in assets they would get about $6million in buying power for its traders. However shorts cancel out longs when it comes to buying power for JBO's. So if a trader has a pair, $10 million long KO and $10 million short PEP, they wouldn't bee beyond their buying power or net capital limitations? Because the long and short positions offset, they would have no effect on their buying power or net capital requirement?

Is this correct?

ChitownECHO · Nov 27, 2005

Quote from Cre8UrF8:

Both Echo and Bright are JBO's, which need a minimum of $1 million in assets and because of net capital requirements are limited to a little over 6:1 leverage. So if they only had $1 million in assets they would get about $6million in buying power for its traders. However shorts cancel out longs when it comes to buying power for JBO's. So if a trader has a pair, $10 million long KO and $10 million short PEP, they wouldn't bee beyond their buying power or net capital limitations? Because the long and short positions offset, they would have no effect on their buying power or net capital requirement?

Is this correct?

For the BP in general, you hit it right on the head.

As for the long vs short...not quite. You have the right idea though. They only cancel each other out if they are convertible securities...ie...long BRK/A and short BRK/B. Now, if Trader A is long 100 IBM and Trader B is short 100 IBM, THEN they cancel each other out and the net cap is unaffected.

zdreg · Nov 27, 2005

jbos get the buying power based upn the assets of their partner. if echco has eg 1m in assets their exposure could be 100 m based upon the assets of their partner.

Both Echo and Bright are JBO's, which need a minimum of $1 million in assets and because of net capital requirements are limited to a little over 6:1 leverage. So if they only had $1 million in assets they would get about $6million in buying power for its traders. However shorts cancel out longs when it comes to buying power for JBO's. So if a trader has a pair, $10 million long KO and $10 million short PEP, they wouldn't bee beyond their buying power or net capital limitations? Because the long and short positions offset, they would have no effect on their buying power or net capital requirement?

Is this correct?

Arnie · Nov 27, 2005

wth are jbo's?

Don Bright · Nov 28, 2005

Quote from Cre8UrF8:

Both Echo and Bright are JBO's, which need a minimum of $1 million in assets and because of net capital requirements are limited to a little over 6:1 leverage. So if they only had $1 million in assets they would get about $6million in buying power for its traders. However shorts cancel out longs when it comes to buying power for JBO's. So if a trader has a pair, $10 million long KO and $10 million short PEP, they wouldn't bee beyond their buying power or net capital limitations? Because the long and short positions offset, they would have no effect on their buying power or net capital requirement?

Is this correct?

Correct UP TO the part about offsets...they Do Not offset.
From my compliance officer:

"Haircut is 15% of greater of long or short position. Haircut on other side is 15% of position after it has been reduced by 25% of larger side. so if you have both long and short positions of $10,000, haircut would be $1,500 on long and $1,125 on short .15(10,000-2,500) total of 2625 "

15% means the same as 6.67 x equity for net capital requirements.

So, basically, if we have $100 million in net capital (not traders money), then approximately $450-$600 million in trading capital is developed.

(Don't hold me to this exactly, but I think it explains the concept).

Hope this helps...

Don