Need Prop Firm for Overnights - Mostly

I think I can describe what goes on over at Bright better then Don can. LOL. What I think Don is trying to say is, in order to get overnight leverage, you need to hold a book of positions that are dollar neutral to spread out the risk. So the GE/SPY example is poor. Ideally you would be long say 20 different stocks and short the SPY against them so what happened in SHLD doesn't blow out your account. Don should have explained it this way. So hopefully that clears things up. Don, if you have any more questions about Bright Trading, I'll be happy to answer them! :)
 
Quote from Maverick74:

How about we use this example. Short 2k shares of SHLD (two days ago), Long 700 SPY. This trade is about dollar neutral with 100k on each side roughly. Sears gaps up 5 pts on the open, SPY opens flat. Trader blows out 50% of his account on his first day of trading. Any questions? :)

Next step, go next door and fire off 10 rounds of ammunition with an AK47 to let off some steam. :D
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Here is another trade for Don Bright. Short 100k worth of AAPL. Long 100k worth of SPY. Come in tomorrow. Account gone. Walk over to the shooting range. Spend half the day there. :)
 
Quote from Maverick74:

Here is another trade for Don Bright. Short 100k worth of AAPL. Long 100k worth of SPY. Come in tomorrow. Account gone. Walk over to the shooting range. Spend half the day there. :)
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Our traders don't get involved in AAPL or GOOG, or most of the high priced, high risk stocks.

And, sure, "stuff happens" - but most of the traders are good at risk control. That's what makes them good.

Don
 
Quote from Don Bright:

Our traders don't get involved in AAPL or GOOG, or most of the high priced, high risk stocks.

And, sure, "stuff happens" - but most of the traders are good at risk control. That's what makes them good.

Don
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Yes, but I was just commenting on your single stock example. It was not a good one. Being that ANY stock, including GE, can gap overnight. And if one is leveraged even 10 to 1, a 10% gap blows you out. Being long or short SPY does absolutely nothing for your hedge over night. Having index hedges smooths out volatility only over longer time frames, but not gaps. Ten percent moves happen daily in this market on news overnight. You can't manage news risk Don. That's the first thing I would tell your traders in their "boot camp" training.
 
Quote from Don Bright:

Our traders don't get involved in AAPL or GOOG, or most of the high priced, high risk stocks.

And, sure, "stuff happens" - but most of the traders are good at risk control. That's what makes them good.

Don
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And Don, for the record, high priced stocks are "far" more stable % wise then low priced stocks. There have been numerous statistical studies on this. People think high priced stocks are more volatile because of the absolute price moves, but on a % basis, a $300 stock is far more tame then a $15 stock all things being equal.
 
Quote from Maverick74:

I think I can describe what goes on over at Bright better then Don can. LOL. What I think Don is trying to say is, in order to get overnight leverage, you need to hold a book of positions that are dollar neutral to spread out the risk. So the GE/SPY example is poor. Ideally you would be long say 20 different stocks and short the SPY against them so what happened in SHLD doesn't blow out your account. Don should have explained it this way. So hopefully that clears things up. Don, if you have any more questions about Bright Trading, I'll be happy to answer them! :)
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LOL, thanks Mav...


Don
 
Don, here is one of those low priced stocks for ya...ILMN...went out at $36 yesterday....up 40% today. Your SPY hedge...down .50%. Whoops. :)
 
Quote from Maverick74:

Don, here is one of those low priced stocks for ya...ILMN...went out at $36 yesterday....up 40% today. Your SPY hedge...down .50%. Whoops. :)
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Here's a tip for you ... Biotechs, just say NO! :-)
 
Quote from Slave2Market:

Here's a tip for you ... Biotechs, just say NO! :-)
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What about the other 500 non bio-tech stocks that have gapped over night 10% or more in the last month? Say no to those to? So let's get rid of bio-tech. Get rid of high priced stocks. Get rid of volatile stocks. Get rid of earnings stocks. Get rid of any stock in the news. And what do we have left to trade? Dupont!!!!!! I'm ready to go! :D
 
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