Quote from Newatthis:
Let me get this straight. What you said a few posts ago, that you are following the clearing firm model, are you saying that all you are is a glorified clearing firm for day traders? Are you guys just doing Goldman's dirty work by catering to the small day trader they never would? If you are not just a clearing firm offering various products to your traders including leverage under the guise of net capital why do you pay 100%? Seems to me that you are trapped in the world of hurt these day traders have created. Your firm is forced to payout 100%, to lower commissions to a level that has made some firms close shop and the traders more or less still are making money. It doesn't seem worth the regulatory risk as well as the financial risk you and your brother take to make whatever it is you make.
Maybe the Braun's did the right thing by getting out. Their issue is the method of exit.
I hope you don't actually respect their exit strategy (some traders might not like that method)...lol.......but at the same time, please don't think that anyone "forced" us to payout 100%)... We simply adapted our business model as the market dictated. And, don't worry, we and our traders are doing fine, thank you.
If you re-read, I said that we DO follow the Clearinig Firm model. Providing capital usage, clearing, execution, etc., with one added benefit...our traders don't have to buy an exchange membership nor do they have to qualify with a Clearing Firm (or get a B/D). I don't thing "glorified clearing firm" is an accurate description. I think that 'Professional Trading Firm" is just fine, thank you. Whenever a trader wants to invest millions in seat memberships, bank qualifications, regulatory issues, etc. .... I say "go for it." Heck, it seems that everybody and his brother has, at one time or another, decided to try their luck at being an "Introdcuing Broker" for another firm (ala some of the Firms "pass in the night.")....heck, what would call them ..?? "Glorified Multi-Level Marketing Shops" (Oh yeah, I guess they are).....
We have always chosen not to have the "employee type" trader, who ends up holding the bag for amounts far in excess of whatever initial capital contribution we may ask for. If that worked well for the trader And the Firm, we could do it ....as you have seen many times, it is bad for the Firms, and MUCH WORSE for the traders....I have run sample numbers here on the board multiple times. We don't want "employee types" we don't want to raise overhead and costs with a zillion back office types, we simply provide an excellent opportunity for those who are serious traders.
I think you understand the whole situation better than you let on, and if you can think of a better way to do business than we have over the decades....please let me know. My brother and I can always "steer the supertanker" (reference JeffGus comment above, LOL) in a different direction.
In a day where every nonsense gambit permeates the air...I realize that it's still hard to believe that we work really hard to provide a good and valuable service. And if we were to ever "bail out"....we'd do it with our own money, not the traders, not the investors (since we don't have nor need any)....but we plan on being here for a long, long time.
Again, thanks to all for letting me help explain how all this works to the new people. Due diligence is the name of the game.
All the best....and good luck, New!
Don
