how anyone can pay .0075 and put up 10k of there own money with anyone is beyond me. don you got to be kidding saying guys are paying .0075 putting up 10k of there own money. your rates were .0075 4 years ago. everyone else has cut there commissions in 1/2 and you're still at .0075. i take my hat off to you that you can still have good business with those commissions. 1 million shares at .0075 is $7500 vs 1 million shares at .0025 is $2500. thats 60k a year difference and impossible to overcome. don how many traders does bright have in offices and remote. i bet you have 300 or so at least. don in your opninion how many full time hard core day traders are in the country including prop at offices and remote. i'm thinking around 3000.
Need some input from proprietary traders
- Thread starter SWScapital
- Start date
It it was 1849 instead of 2005, Don and his brother would be selling picks and shovels to those panning for gold in California. And like now, they'd be laughing all the way to the bank at those dreamers who keep pooring good money into a hopeful future. Got to give it to them. They've got a great business model. They only teach high volume trading techniques, and they only welcome traders who trade high volume. And there are enough of those around to keep the mills churning. My hat is off to them. A truly vertical operation.
From what I understand Bright's guys use market-making type strategies. Hence the huge volume and small average profits/share.
FWIW, I think the specialists, the broker dealers, and the ECNs know their business pretty well. They're chasing the same crumbs from the pie and you can be damn sure they're not paying $.0075/share.
hey i'm sure many outfits jeoulous of bright. they've found a niche and done well with it. they also seem to keep many of there traders. again brights not for me as i couldn't even consiously pay 1/3 of those commissions but its obviosuly been goog for many. and i give don gright all the credit in the world as he's constantly contributing here
Thank you for the response. May I ask how much usually has to be risked in the normal course to generate that 2.5 cents per share?
It's actually a pretty safe bet...no way to determine risk with any quantitative certainty, but you might enjoy reading this article I wrote which pretty much explains some of my thoughts aobut trading risk.
www.stocktrading.com/riskreward2.html You will need to scroll down for the complete article.
We do put in about $1Million worth of orders, most of which are not filled, and half of which cannot be filled (since we but in buys and sells on the same stocks, which means we cannot get both prices filled on the opening.
Capital intensive, but pretty safe and effective.
Don
Its not really a risk free option. If you have ever blown up before you know that the psychological aftermath can be very difficult to recover from..even if its not your money.
Interesting article. Thank you. Perhaps I am belaboring the point, but I would still like to have an idea of the amount that your traders would generally allow a trade to go against them before exiting at a loss. I realize that circumstances can vary, and that block trades can momentarily swamp price, as noted in your article. Further, I understand that a priori risk can vary from trade to trade, depending on a trader's criteria and market activity. However, my question is, how much are your traders generally likely to risk in order to make that 2.5-cent average? You illustrated in your article that a 70% win ratio allows a trader to lose twice as much on losing trades as he makes on winning ones and still come out ahead. So, my question is, are you alluding to the idea that as much as 5 cents is generally risked by your traders to get that 2.5 cents, or was the example strictly for illustrative purposes?
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Fun read;
this forum and that article.
Liked the article points; ''This is a profession that weeds out the gamblers pretty quickly'',and the market is like a pitcher who always throws something new, rather than try to predict.....
