How much would it cost to open a Prop Firm Office (ie. Bright Trading Affiliate)

Quote from Slave2Market:

In regards to stock trading, there really aren't any short term edges left where a prop trader can push big volume. I would bet that most profitable remote prop traders (the few that are still around) generate the majority of their profits from longer term trades e.g. hours to days versus the good ole days of seconds to minutes. It takes more money to make money in the current market environment and you have to take more risk to make that money. I'm defining risk in terms of market exposure time and capital allocated to each position. Finding enough profitable traders to fill an office would be a very difficult task. I live in Tampa and I can't even round up a few real traders to talk shop! :D
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Just for fun, from our top 20 trader list. Reviewed with class** this week.

10 million shares per month guys - place hundreds of opening orders. Go home flat. Making over a $million per year.

One came to class again this week. Makes about $120K doing 90% opens. Goes home flat.

About 5 do opens and pairs. Only trade about 1-2 million shares.

3 do specialized "stuff" - won't divulge. But go home nearly flat daily. About 500k shares or so.

5 just make good money, and I have no idea exactly what they're doing, LOL.

Several are actually adding to revenue with some pretty good programming of rebate type trading.

However, Mr. Cool Dude. Truth about offices. We keep our Chicago office above the CBOE, has about 8-10 guys registered there, and maybe another 10 or so as "Chicago Remote" under same Manager. Our Langley location in Canada, and here in Vegas.

No need for brick and mortar, just costs the traders more. We get together via webex, skype, goto meeting etc.

Things change, Firms have to adapt or die, very basic concept.

FWIW,

Don

** Good class this time around. Smaller (22), but about 5 already in process with licences etc. And 4 more studying at this point. Felt good about what we did this time. Had our top guys involved a bit more, with a "live" guy who is just a trader visiting. Students liked that.
 
Quote from ElectricSavant:

What? don't you guys appreciate ET? ☺

ES
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You know I do, and especially you Mr. ES.

I know some think I'm always trying to be a cheerleader, or marketing something, but when so many seem so jaded about the business we love....trading. I love when my opens work, I love when my simple rules make me money each day, I hate to lose.

We have "evolved" as the current term seems to be, into a Firm of top notch people. We are actually going to be a bit more selective with our new people. By next year, we're raising our capital requirements, not lowering them in the hopes of dragging in new, non dedicated traders.

I'm really motivated by our last couple of groups (classes etc.) - traders willing to dedicate a full year of their time and money to actually make this work. People not looking for a free ride, or a hand out, or a sure thing. Dedication is still the single most important part of trading. We can show you what's working, provide the capital and the tools. BUT, the trader has to really do the work as well.

Don't mean to "soapbox" on you, but I know you understand what I'm saying. No Firm is going to let you just come in, pay you to risk the Firms money, and if they do, or appear to, they are probably involved in something you don't see.

Anyway, hope to garner a few more traders this year, and yes, a "few" more good traders. Not throwing out the big net, as perhaps in the past. We want people who will dedicate their efforts to their career.

Thanks ES, for all the support over the last decade or so. Really appreciated.

Don
 
Don,

Your participation in ET and the support that you give traders is unsurpassed.

I personally would apply to your organization and spend a year there to get better, but I would require that I do it in Las Vegas where you and Bob are (I stilll want that ride in the Packard). Actually Wifey would not mind living in Nevada as she prefers the warmer climate over Denver and would move there in a heartbeat. but there are many complications to that that I can not discuss here.

anyways...

Good Trading to You and your Team.

ES

P.S. wow..heard Jamie Diamond talk today....And wow I felt that dark, dark deep feeling that trader must feel right now. I have been there and done that...it is a nighmare. Thank the Lord for forgetfullness.

Quote from Don Bright:

You know I do, and especially you Mr. ES.

I know some think I'm always trying to be a cheerleader, or marketing something, but when so many seem so jaded about the business we love....trading. I love when my opens work, I love when my simple rules make me money each day, I hate to lose.

We have "evolved" as the current term seems to be, into a Firm of top notch people. We are actually going to be a bit more selective with our new people. By next year, we're raising our capital requirements, not lowering them in the hopes of dragging in new, non dedicated traders.

I'm really motivated by our last couple of groups (classes etc.) - traders willing to dedicate a full year of their time and money to actually make this work. People not looking for a free ride, or a hand out, or a sure thing. Dedication is still the single most important part of trading. We can show you what's working, provide the capital and the tools. BUT, the trader has to really do the work as well.

Don't mean to "soapbox" on you, but I know you understand what I'm saying. No Firm is going to let you just come in, pay you to risk the Firms money, and if they do, or appear to, they are probably involved in something you don't see.

Anyway, hope to garner a few more traders this year, and yes, a "few" more good traders. Not throwing out the big net, as perhaps in the past. We want people who will dedicate their efforts to their career.

Thanks ES, for all the support over the last decade or so. Really appreciated.

Don
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Quote from ElectricSavant:


ES

P.S. wow..heard Jamie Diamond talk today....And wow I felt that dark, dark deep feeling that trader must feel right now. I have been there and done that...it is a nighmare. Thank the Lord for forgetfullness.
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We all knew Bruno Iksil would screw up eventually...!

Iksil may have amassed a $100 billion position in contracts on Series 9 of the Markit CDX North America Investment Grade Index, counterparts at hedge funds and rival banks said in April. They based their estimates on the trades and price movements they witnessed as well as their understanding of the size and structure of the markets. The positions amounted to tens of billions of dollars, under the firm’s own math, a person familiar with its view said at the time.

The trade on the index probably wasn’t a one-way bet, the market participants said. Iksil may have offset it by buying protection on the same index with contracts that expire about seven months from now, the people said. That strategy would pay JPMorgan the difference between the long-dated contracts and the short-dated ones, and the trade would gain when the gap narrows. The hedge would end in December unless another trade is made to replace it.
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http://www.bloomberg.com/news/2012-05-11/jpmorgan-loses-2-billion-as-mistakes-trounce-hedges.html

But I think JPM will get out of it OK...
 
Quote from joshuatree123:

Don Bright is the only person on this board who tells the truth, gives it to you straight and offers the fairest deal around out of any other prop operation out there. He'll give you his phone number, talk to you directly and give you straight out answers.

Don does his very best to help you succeed and he wants you to succeed. If you fail, then Don fails.
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Not really...

If I fail... I FAIL... If Don fails, I still fail...! :D

I don't mean to pick on Don obviously but that's the way things are in what's left of this industry... I suspected it..., ....that's how it was where I used to work as well. Office went under a while later after I left... So... just wanted to get some other perspectives.

As these deals work I'd be the only guy putting up any money... Risk is all mine.

The only positive thing about props these days is that your office would get a commission rebate... That's about it. If you're doing any profit sharing with the H.O. then that small advantage is gone in a big way...

That's about it as I see it...
 
Quote from joshuatree123:

Don Bright is the only person on this board who tells the truth, gives it to you straight and offers the fairest deal around out of any other prop operation out there. He'll give you his phone number, talk to you directly and give you straight out answers.

Don does his very best to help you succeed and he wants you to succeed. If you fail, then Don fails.
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Thanks for that, really appreciated. Can't do magic, can't make everyone into a great trader, only the trader can do that. We provide the guidance and the tools and the capital.

Thanks again...

Don
 
Quote from CoolTraderDude:

Not really...

If I fail... I FAIL... If Don fails, I still fail...! :D

I don't mean to pick on Don obviously but that's the way things are in what's left of this industry... I suspected it..., ....that's how it was where I used to work as well. Office went under a while later after I left... So... just wanted to get some other perspectives.

As these deals work I'd be the only guy putting up any money... Risk is all mine.

The only positive thing about props these days is that your office would get a commission rebate... That's about it. If you're doing any profit sharing with the H.O. then that small advantage is gone in a big way...

That's about it as I see it...
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Don't understand all the gloomy talk.

Have ten profitable guys (and/or gals) with profitable strategies and you have a profitable quasi-hedge fund.

I like the Tradeworx business model.

Basically, it's a prop lite firm doing proprietary trading and not commission trading.

Looks like that's the next stage in this prop lite trading evolution.
 
Quote from SteveNYC:

Basically, it's a prop lite firm doing proprietary trading and not commission trading.

Looks like that's the next stage in this prop lite trading evolution. [/B]
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I agree. The biggest issue is capital. We have clients that have gotten together to trade under one umbrella. It enables them to get health insurance together and share ideas with profit as the only end goal. It's very important you know who your partners are and that the business is well capitalized.

Bob
 
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