firm takes risk deposit legal or not ?

karth · Mar 27, 2009

makes sense, Thanks for the information.

Don Bright · Mar 27, 2009

Quote from propseeker:

i see. so, if i have 500k in my "acct" at bright, and someone blows that 10M out. my money is 100% segragated from that blowout and 100% safe rgt? what if it were a 20M blowout? what happens when the blowout is more than the money in the LLC acct? i'm not really seeing how this type of acct would be at all similar to an acct like IB or Schwab. were you just saying that they were similar because you can put money in and take money out?

We obviously keep much more than $10 million to protect the company and traders.....but, why would we allow anyone to lose that kind of money? We have excellent risk controls.
[
With $500K aren't you limited to $250K or $100K "protection" anyway. In eany event, most keep under $100k, and use our money to trade with...makes more sense to keep the other $400k in your mattress, LOL.

Of course we have many who keep $millions, and they don't seem to be too concerned.

All the best,

Don

Don Bright · Mar 27, 2009

Quote from krazyanyway:

Exactly. A trader should not be allowed to blow out any more than he deposited for trading purposes. If the firm has any type of decent risk control at all, there is no way a couple traders would blow the entire firm up, they would simply get shutdown by the system and their positions would be liquidated.

You have it right...it's our money, not investors, not shareholders, etc. and we keep a pretty good eye on it several ways. To protect the trader from themselves, if they are losing over 10% of their net account value, that pops up on risk control If anyone is excessiv overnight, without prior permission, that shows up.

We've had less than a handful of events in 17 years that even got into the negative more than a few grand.... and many of those traders we worked with until they positive again.

Don

chartman · Mar 29, 2009

All prop firms regardless of their setup provides more leverage than PDT allows. Also, all of them uses a 'sub' account for their traders. The money on deposit by a trader has no protection under SIPC. Your funds are only as safe as the prop firm.

ASusilovic · Mar 29, 2009

Quote from atticus:

Reuters March 26, 2009: US Treasury Secretary Geithner opens Bright account. Now has access to 40:1 intraday leverage and low desk fees.

LOL !

Don Bright · Mar 30, 2009

Quote from atticus:

Reuters March 26, 2009: US Treasury Secretary Geithner opens Bright account. Now has access to 40:1 intraday leverage and low desk fees.

LOL, must have missed that post while I was traveling last week.....

It's funny, the other day I heard the "latest" financial guru type on my local radio (read: Super snake oil into this).... he was quoting Buffett, Soros, Geithner, etc. about how they are conservative investors....alluding that what he was offering was, in some way, being either used or supported by these people (as if?).

This guy said that if you put up $$$ with his group that they would immediately give you 11% in cash to add to your "secure" investment....etc. My point is, that when I hear gov't officials or big money gusy names popping up,,, I tend to cringe.

Now, back to Geithner and Bright.... "we don't take on reckless cowboys' LOL. Sorry....

So, Atticus, we never hooked up here in Vegas last year.... PM me when you plan your next trip....

All the best,

Don

jetmacrotrader · Mar 31, 2009

Mr. Bright, you say that if a trading firm opens a brokerage account , recieves 4-1 leverage, and gives out the extra cash/leverage to traders to trade this is illegal in most states. where have you gotten that information from? I just want to make sure b/c im considering opening an account with firms that do this.

Don Bright · Mar 31, 2009

Quote from jetmacrotrader:

Mr. Bright, you say that if a trading firm opens a brokerage account , recieves 4-1 leverage, and gives out the extra cash/leverage to traders to trade this is illegal in most states. where have you gotten that information from? I just want to make sure b/c im considering opening an account with firms that do this.

I can't really comment on legal issues on the board here. Retail firms who try to circumvent the PDT rules have bees discussed here a lot over the years. Just do you due diligence, and hope for the best I guess.

Don