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Could anyone explain how Bright Trading works? exam necessary?
- Thread starter piyayo
- Start date
Youok, thanks for the info.
I guees all of those above (DTTW, WTS, Hold Brothers, FTG, BDT) are not members of Finra and my funds won´t be secure for this reason, right?
If you know it already you don't have to study.I would like to contact them because they use ver nice platforms but I don´t feel like wanting to study things that I already know.
Last time I looked into bright was about 6 years ago. They charge very high fees, higher than regular brokers (IB/lightspeed). The payout is 99%. The only other difference vs a regular broker (besides higher fees) is you can access massive leverage, upto 30:1 overnight.
How useful is it to have massive leverage? You can get 6.67:1 with portfolio margin. To actually use much more than that safely, you almost need a kind of holy grail strategy that has tiny drawdowns.
The other possibility is you want leverage between 2 and 6.67, but don't have enough capital to open a portfolio margin account.
So logically, their clients either
a) are severly undercapitalized
b) have a holy grail strategy with tiny drawdowns
Either way, if someone is with Bright and they are successful in growing their account quickly, the high fees will be a strong incentive to leave ASAP to reduce costs. Esp since holy grail type strategies tend to be very limited in capacity.
How many type (b) traders are out there, at the right phase of their growth where Bright makes sense? It's a very weird business model that doesn't really add up for me. They are supposedly reputable, but have a structure that seems to suggest what they actually do is churning gullible new traders for fees
How useful is it to have massive leverage? You can get 6.67:1 with portfolio margin. To actually use much more than that safely, you almost need a kind of holy grail strategy that has tiny drawdowns.
The other possibility is you want leverage between 2 and 6.67, but don't have enough capital to open a portfolio margin account.
So logically, their clients either
a) are severly undercapitalized
b) have a holy grail strategy with tiny drawdowns
Either way, if someone is with Bright and they are successful in growing their account quickly, the high fees will be a strong incentive to leave ASAP to reduce costs. Esp since holy grail type strategies tend to be very limited in capacity.
How many type (b) traders are out there, at the right phase of their growth where Bright makes sense? It's a very weird business model that doesn't really add up for me. They are supposedly reputable, but have a structure that seems to suggest what they actually do is churning gullible new traders for fees
What about massive leverage with their money? Also, some prop firms have infrastructure in place that is too expensive to replicate on your own. Aren’t you tradings automated or semi-automated? If so, does Bright offer anything worthwhile?How useful is it to have massive leverage? You can get 6.67:1 with portfolio margin.
What about massive leverage with their money? Also, some prop firms have infrastructure in place that is too expensive to replicate on your own. Aren’t you tradings automated or semi-automated? If so, does Bright offer anything worthwhile?
I'm not sure if you read my post fully.
Yes, what Bright offers is massive leverage. But think about what characteristics a strategy needs to have to benefit from massive leverage. It needs to have incredibly low variance. Yet they also have high fees.
High fees implies low frequency. Low frequency implies high variance. High variance implies low leverage.
Low frequency and low variance, maybe there are some spread strategies in that category, but I thought bright trades stocks not options/futures.
Correct.You are telling me that if you do significant volume they will not give you competitive rates?
What makes no sense?I don’t know, but makes no sense. The only way it would make sense if you had a strategy that does lots of volume but can barely cover fees.
Usually prop firms have better rates than retailers, better tech, and they pass through rebates. I can understand why they would up charge traders in training, but a trader who makes money has lots of options so they have an incentive to keep them.What makes no sense?
Also, 99% payout is ridiculously high, so maybe that’s the reason for higher fees.
I traded with them years ago and their philosophy was to discourage in and out constant trading. Let alone HFT. Even though they gave you leverage and commissions were some of the lowest in the industry.
Haven't a clue what the story nowadays but it seems no one else that has posted so far does either. Yet that hasn't stopped the speculation.
Haven't a clue what the story nowadays but it seems no one else that has posted so far does either. Yet that hasn't stopped the speculation.