Dark storm cloud brewing on payout rules

[Maverick74]

Quote from Don Bright:

I may have to invite you to chat with a group sometime to explain your points. They like being exempt from FICA (15%), they like being taxed on triple net, and they like the fact that they don't "work" for anyone.

Trust me, I know what you're saying, but the whole idea of losing the "floor trading business model" is being fought tooth and nail. The minimal amount of initial funding is generally a moot point, especially after a few months of good trading.

edit: after one or two withdrawals, they have no initial capital up anyway.

Don

Don, it's simply a function of dollars. Let's take a guy named Gary. Gary is an independent trader at Bright and he made 500k last year net after all taxes and deductions.

Under the W-2 model, Gary will also make 500k net after taxes. He will have as much freedom before as he does now. He's not working for the government Don. He is trading. He is still going to be pair trading. Still doing what he does. Getting paid what he gets paid. Seriously, there is nothing to fear here.

The ones who are going to lose in this deal unfortunately are the bad and mediocre traders. As no one will "hire" them and they are more then likely under capitalized.

But you as a firm owner and your "top" traders, nothing will change. The fica tax issue is moot as it's all about net net, what you take home.

 

[Don Bright]

Not fighting you of course, you know I respect your opinions.

W-2 means the Firm can tell you what to trade, when to show up at work, how many shares to trade, and all the rest. Of course there are "top traders" who get slack, but there are also W-2 traders who make minimum wage with small bonuses. I'm not saying that's a bad model (especially in Chicago where everyoone should go if they can,, to learn on the floor, or upstairs firms).... but for many, it just isn't a viable option. Again, IMO.

Don

 

[Don Bright]

Quote from Maverick74:

Don, it's simply a function of dollars. Let's take a guy named Gary. Gary is an independent trader at Bright and he made 500k last year net after all taxes and deductions.

Under the W-2 model, Gary will also make 500k net after taxes. He will have as much freedom before as he does now. He's not working for the government Don. He is trading. He is still going to be pair trading. Still doing what he does. Getting paid what he gets paid. Seriously, there is nothing to fear here.

The ones who are going to lose in this deal unfortunately are the bad and mediocre traders. As no one will "hire" them and they are more then likely under capitalized.

But you as a firm owner and your "top" traders, nothing will change. The fica tax issue is moot as it's all about net net, what you take home.

How is FICA 'moot'? I'm not understanding. I, myself, due to changes have been maxing out FICA and I hate it. See above about independence as well.

I guess we're typing over each other, my friend.

And, we never know which new trader will become "top" (as you say, not sure why the quotes?), and the independent, money up, is the only way to get from point A to point B ("top"). Believe me, I have been fooled many times with how well (or not well) new people have done.


Don

 

[Maverick74]

Quote from Don Bright:

Not fighting you of course, you know I respect your opinions.

W-2 means the Firm can tell you what to trade, when to show up at work, how many shares to trade, and all the rest. Of course there are "top traders" who get slack, but there are also W-2 traders who make minimum wage with small bonuses. I'm not saying that's a bad model (especially in Chicago where everyoone should go if they can,, to learn on the floor, or upstairs firms).... but for many, it just isn't a viable option. Again, IMO.

Don

Don, you are describing sweat shops in 1915 from an Upton Sinclair book. Nobody is making minimum wage. Think about it Don. Would you pay a "top trader" minimum wage? Why would they work for you over DRW? They wouldn't. Trust me, you'll pay them what they are worth. And no, you will not tell them what to trade or how to trade as they are, as you put it, "top traders". Don none of these firms in Chicago have that kind of control over traders. And none of them get small bonuses. Again, guys get paid what they are worth. Because, Don, if you don't pay them what they are "worth", they will go somewhere else. It's a pretty efficient market Don, believe me. It really is. What you are describing simply does not exist nor will it because the market place will not allow it to exist.

 

[Maverick74]

Quote from Don Bright:

How is FICA 'moot'? I'm not understanding. I, myself, due to changes have been maxing out FICA and I hate it. See above about independence as well.

I guess we're typing over each other, my friend.

And, we never know which new trader will become "top" (as you say, not sure why the quotes?), and the independent, money up, is the only way to get from point A to point B ("top"). Believe me, I have been fooled many times with how well (or not well) new people have done.


Don

Don, all the trader cares about is what he takes home. If after taxes, he still takes home 500k, he should not worry about the FICA tax. You can offer "those top traders" who you already have more capital so they can make the extra 7.5% they have to pay on FICA to compensate that. Not that hard. It's all about numbers Don. You know that better then most.

 

[Don Bright]

Quote from Maverick74:

Don, you are describing sweat shops in 1915 from an Upton Sinclair book. Nobody is making minimum wage. Think about it Don. Would you pay a "top trader" minimum wage? Why would they work for you over DRW? They wouldn't. Trust me, you'll pay them what they are worth. And no, you will not tell them what to trade or how to trade as they are, as you put it, "top traders". Don none of these firms in Chicago have that kind of control over traders. And none of them get small bonuses. Again, guys get paid what they are worth. Because, Don, if you don't pay them what they are "worth", they will go somewhere else. It's a pretty efficient market Don, believe me. It really is. What you are describing simply does not exist nor will it because the market place will not allow it to exist.

Top traders simply do not want to work for someone, in my experience anyway. Remember, Bob and I were both independent floor traders, never ever "employees" so maybe we're a bit bias. Why would a top trader not simply want all the money he can make? You know the W-2 firms keep a percentage, why give away $millions in lieu of risking a few bucks up front?

As my friends at FNYS hire a few people per year, we can give opportunity to many more. OF course, MANY will not make it, such is capitalism at it's core... entreprenurism at it's core.

Again, I suggest everyone get a job in Chicago before coming to Bright Trading, as many have...saves our monitoring, mentoring, and hand holding, LOL.

edit: Not sweat shops, just business models, you know they're out there. Maybe not "minimum" wage, but no firm is going to pay big bucks on a "pig in a poke" right? I know you wouldn't, neither would I.

Don

 

[Maverick74]

Quote from Don Bright:

Top traders simply do not want to work for someone, in my experience anyway. Remember, Bob and I were both independent floor traders, never ever "employees" so maybe we're a bit bias. Why would a top trader not simply want all the money he can make? You know the W-2 firms keep a percentage, why give away $millions in lieu of risking a few bucks up front?

As my friends at FNYS hire a few people per year, we can give opportunity to many more. OF course, MANY will not make it, such is capitalism at it's core... entreprenurism at it's core.

Again, I suggest everyone get a job in Chicago before coming to Bright Trading, as many have...saves our monitoring, mentoring, and hand holding, LOL. [

Don

Here is why Don. The average trader in Chicago who works for himself, might make anywhere from nothing to maybe 500k a year if, if, he is really a solid trader. He is happy right because he is keeping 100% of his money. A good trader who works for a good firm starts at about 500k and goes up into the millions. That is his take home after his cut. So yes, while in theory he might get angry because the firm is taking out a split, the reality is, he is making 4 to 5 times what that first guy is making who is thrilled as beans he is keeping 100% of his profits.

Don, If i asked you a question. Would you rather get 100% of 100k or 50% of 10 million. Which would you choose? Be honest.

 

[Don Bright]

Quote from Maverick74:

Don, all the trader cares about is what he takes home. If after taxes, he still takes home 500k, he should not worry about the FICA tax. You can offer "those top traders" who you already have more capital so they can make the extra 7.5% they have to pay on FICA to compensate that. Not that hard. It's all about numbers Don. You know that better then most.

Numbers, yes, good numbers. 7.5% of $500k is more than many families make, right. And especially young(er) guys like you know you may not even see that SS money back, right?

Again, it's more about the independence. Several of our guys have gone on to start their own firms, one is doing that right now. Many have made enough money that they don't need our capital, so I have helped them plan their retail accounts. Some come back for the safety or the comaraderie, but some don't.

We have had people leave for greener pastures just to come back because, without the interaction, they seem to lose their "mojo" (discipline usually) they enjoyed as part of one of our trading groups.

Back to you.... nothing much to disagree on, IMO. Just different mind sets of some traders.


Don

 

[Don Bright]

Quote from Maverick74:

Here is why Don. The average trader in Chicago who works for himself, might make anywhere from nothing to maybe 500k a year if, if, he is really a solid trader. He is happy right because he is keeping 100% of his money. A good trader who works for a good firm starts at about 500k and goes up into the millions. That is his take home after his cut. So yes, while in theory he might get angry because the firm is taking out a split, the reality is, he is making 4 to 5 times what that first guy is making who is thrilled as beans he is keeping 100% of his profits.

Don, If i asked you a question. Would you rather get 100% of 100k or 50% of 10 million. Which would you choose? Be honest.

Why can't they make the $millions as independent traders? Heck, that's where we started... admittedly, my brother has made much more, but we both started out independent and stayed that way. A guy with $1million with us cans certainly use that same capital the guy in Chicago can, right?

But, again, you're talking about the cream of the crop of Chicago traders. An overall small number. The majority who don't produce well enough to keep the Chicago firm happy won't last long enough to become profitable as well.

Once again, just different ways to get to the goal.

Don

 

[Maverick74]

Quote from Don Bright:

Numbers, yes, good numbers. 7.5% of $500k is more than many families make, right. And especially young(er) guys like you know you may not even see that SS money back, right?

Again, it's more about the independence. Several of our guys have gone on to start their own firms, one is doing that right now. Many have made enough money that they don't need our capital, so I have helped them plan their retail accounts. Some come back for the safety or the comaraderie, but some don't.

We have had people leave for greener pastures just to come back because, without the interaction, they seem to lose their "mojo" (discipline usually) they enjoyed as part of one of our trading groups.

Back to you.... nothing much to disagree on, IMO. Just different mind sets of some traders.


Don

Don, this isn't communism. All these rich traders can go out on their own and trade retail and keep 100% of their profits and have no boss and scream from the rooftops, "I'm free!". That is their choice. That doesn't change.