haircut charge

Don Bright · Mar 31, 2007

Quote from rallymode:

Yes. My comedy reference was in the context of Don implying that Bright loans money out at 2% when in fact you are doing nothing but getting into a pair at 2% debit. All this credit interest/debit interest lingo is nothing but a scheme to lure people in. Not even sure why mav brought up the conversion/reversal example. How in the world are you going to exploit it when you have a pair on?

Yes, allowing people to multiply their profit potential with 6 times their equity with no haircut, allowing conversions (or pairs or mergers) surely sounds exploitative, LOL.

Anyway, the hundreds of traders who enjoy use of capital, and who are only concerned about their own bottom line, seem to be pretty happy that at least some firms allow them to achieve higher results. Not for everyone, as trading itself is not for everyone, but nonetheless only available at a handful of places.

You want exploitative, check the retail brokers who steal your short stock interest, geez.

Again, the offer of a live discussion on Paltalk or wherever is always welcome. I'll be happy to bring some of my extreme "haircut users" along for the chat, just let me know so we can publicize it properly to be sure that everyone has their say. Always good for another magazine article on successful trading.

I'm sure my top performers would love to hear how they're being exploited, LOL.

(Mav? You in for a discussion of leverage, might be helpful to the traders on the board?).

Anyway, our people understand the business and what they're doing.

All the best,

Don

yip1997 · Apr 1, 2007

Don,

It is a good idea. I think you and Mav should talk about credit, debit charge, haircut, and leverage for both stocks and options. Use examples of pair trading, and option spreads to illustrate the points.

When you use an example, please break down the credit we will receive, the debit charge and the haircut charge.

Don Bright · Apr 1, 2007

Quote from yip1997:

Don,

It is a good idea. I think you and Mav should talk about credit, debit charge, haircut, and leverage for both stocks and options. Use examples of pair trading, and option spreads to illustrate the points.

When you use an example, please break down the credit we will receive, the debit charge and the haircut charge.

I'm certainly happy to oblige. I'll chat with Mav about it.

As to your questions, I have answered from Bright's perspective already, but here goes once again.

(Approx rates, based on current conditions).

You receive about 5% on your cash balance and your short stock sales, pretty good since retail doesn't pay anthing on SS sales.

You pay about 6.5% for money used from Goldman (this is the approx 1.5% "differential" I spoke of).

You are allowed to use 6 times your equity with no haircut (risk) charge.

Using from 6-12 times your equity adds a 2% per year h/c charge. This means that you can use 12 times your equity for 1% per year plus or minus whatever you have on the Goldman 1.5% differential.

I'm putting together some major talking points for our traders concerning NMS, order routing (Sigma, SigmaX, dark pools of liquidity, etc.), and perhaps when I get that treatise done, I can share that with other current events in another Paltalk discussion.

You can all PM me with any specifics you want discussed.

And...for all you NYC types, I'm bringing Rob Friesen from PairCo with me to my new Great Neck office in May - and I will be holding a free workshop - with (seriously) limited space for non Bright traders. Please PM me if you're interested. I will do my best to make room

Don

rallymode · Apr 1, 2007

Quote from Don Bright:

Yes, allowing people to multiply their profit potential with 6 times their equity with no haircut, allowing conversions (or pairs or mergers) surely sounds exploitative, LOL.

You know you may actually bring Bright more biz if you stopped pimping it on every corner.

Don Bright · Apr 1, 2007

Quote from rallymode:

You know you may actually bring Bright more biz if you stopped pimping it on every corner.

What you call "pimping" generally arises from setting facts straight. I realize that we get quite enough exposure and awareness without my participation on boards and blogs, but I enjoy the discussions (and a lot of this gives me content for my magazine articles).

All the best,

Don

GGSAE · Apr 1, 2007

Quote from rallymode:

You know you may actually bring Bright more biz if you stopped pimping it on every corner.

You haven't added a single worthwhile contribution to this thread....why don't you go post in chit chat instead of ruining a meaningful discussion.

kinggyppo · Apr 1, 2007

Don, I am always amazed at your patience and forbearance. Good luck with your trading!

Don Bright · Apr 2, 2007

Quote from kinggyppo:

Don, I am always amazed at your patience and forbearance. Good luck with your trading!

ET = Good therapy for my anger management class, LOL.

Thanks to all for the PM's - I'll get to them all.

Don

yip1997 · Apr 2, 2007

Quote from Don Bright:

I'm certainly happy to oblige. I'll chat with Mav about it.

As to your questions, I have answered from Bright's perspective already, but here goes once again.

(Approx rates, based on current conditions).

You receive about 5% on your cash balance and your short stock sales, pretty good since retail doesn't pay anthing on SS sales.

You pay about 6.5% for money used from Goldman (this is the approx 1.5% "differential" I spoke of).

You are allowed to use 6 times your equity with no haircut (risk) charge.

Using from 6-12 times your equity adds a 2% per year h/c charge. This means that you can use 12 times your equity for 1% per year plus or minus whatever you have on the Goldman 1.5% differential.

I'm putting together some major talking points for our traders concerning NMS, order routing (Sigma, SigmaX, dark pools of liquidity, etc.), and perhaps when I get that treatise done, I can share that with other current events in another Paltalk discussion.

You can all PM me with any specifics you want discussed.

And...for all you NYC types, I'm bringing Rob Friesen from PairCo with me to my new Great Neck office in May - and I will be holding a free workshop - with (seriously) limited space for non Bright traders. Please PM me if you're interested. I will do my best to make room

Don

Don,

Any plan to the Boston office? Where is your Boston office?

Don Bright · Apr 2, 2007

Quote from yip1997:

Don,

Any plan to the Boston office? Where is your Boston office?

I'll be in Boston, doing a presentation on May 10th...invite everyone you know. Downtown on Federal Way. Send me a PM, with a contact number, and I'll have the affiliate call you.

Don