Rumor: Bright Trader blows up and loses millions

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Quote from Port1385:

When I first saw this thread, I scrolled through the pages and labeled it as another attempt at trolls bashing the sponsors. Haha. Only on ET do they let you take a stab at the sponsors. Then all of the ET residents come in to PM poor Don Brite so he can come to this forum to explain himself and tell us how wrong the trolls were...

Then, I thought, wait a second...hasnt Don for the last few years shunned us all... stating how wrong we were for predicting market direction and that we were fools...that his non-market direction techniques work. I guess I could waste my time and bring back hundreds of threads where Don was telling us how foolish we were for predicting the direction of the markets. Then what about all those times Don came on here to tell us how his firm was so dead set on risk management and has so many controls in place.

Now one of his very own loses a few million on a highly leveraged trade very much like Schindler, Neiderhof, and Bill Miller and all the ET citizenry.

Don then comes on here to tell us that we need not worry and all is well...wait a second Don, I have a few questions to ask you. What happened to your winning market neutral methods? What happened to all the risk management? Are we still fools when it comes to the market?

I realized this thread wasnt about some trolls simply bashing a sponsor which is usually the case on ET, but about the truth being revealed.

Don, please do not simply brush this thread aside and state its none of our business. It was you calling us a bunch of fools this whole time stating how our market direction techniques was for idiots. It was you who smiled and teased us in clown outfits stating what a bunch of monkeys we were.

Well, now its your turn Don for a little humility...
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You talked as if you have not read (or comprehended) what Don wrote in this thread.
 
Quote from yobo:

Obviously, no one likes to hear about a trader at a firm take a big loss that might affect the viability of the firm and put other traders at risk. Don has clearly said this is not the case and that the firm is still in excellent financial health.

If you are a trader at Bright or a new trader considering Bright, Don has been very clear that he is willing to share the firms balance sheet to address all concerns.

This is a business and let's all act like business professionals.

If you have concerns, address those concerns privately and not in a public forum.
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Let's be careful not imply that a firm's risk management controls are unimportant for a prop trader. Quite to the contrary, a prop firm's risk management controls are what keeps a trader's losses from wiping out their entire account, and potentially that of other traders.

In the case of the blowup described on this thread, for example, a trader apparently lost in excess of $5M+ in a very short about of time. Since the trader's prop firm maintains a capital balance of at least $10M, this loss was contained and did not wipe out equity in the capital accounts of other traders.

However, if the next 'blow-up' at the firm is for $20M (versus $5M+), then it's quite possible that 'innocent' traders will be affected and will lose some, or all, of their accounts. As a result, it's a very good question to ask what risk controls are in place at the firm to prevent such a recurrance. I don't this question has yet been addressed by the firm, and it's very pertinent to the topic of this thread.

I do think your suggestion to keep your concerns 'private' flies in the face of the purpose of ET. Without the free and public exchange of information, you can bet that the news of this blow-up (and others like it) would never have seen the light of day. While this might be in the best interest for some in the brokerage industry, it is not in the best interest for traders, for whom this site was created, IMO.
 
Do not get me wrong. I think Don is a wonderful guy who should not be flamed or scrubbed by Trolls, but everything I have read here seems to go against what he wrote in this forum for the last few years.

I have read about Brite trading's great risk management. I have read about Brite's non-market direction methods. Don has written 1000s of pages on these methods even poking fun at us market predicting position trading fools.

Now we learn that Brandon, an ex-poker player, was position trading some highly risky pharma stock in an apparent gamble not a low risk trade.

Im all for gambling and love to get in on a good poker game. I love high risk trading and love to get in on the penny stocks. Im not saying Im against it.

However, I always thought Brite was all about discipline and high probability trades and NOT GAMBLING. I thought Brite was going to help us get away from gambling with IB and move into real trading techniques with a real former exchange trader that knows the ropes.

What can I take away from all this?
 
So I guess thats it with this thread? No reply to my concerns? What happened to risk-free trading without utilizing market direction to make money?
 
I wonder if any prop firms will be in serious trouble with the 17-29 gap coming in MER. Even a relatively small short position could wipe out a traders capital or worse.
 
Quote from Szeven:

I wonder if any prop firms will be in serious trouble with the 17-29 gap coming in MER. Even a relatively small short position could wipe out a traders capital or worse.
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I'm hoping that shorts are crucified by this move as is the Fed.

Put the fear of god into them.

As Dick as Fuld was, if you don't think the short selling community is part of the problem, you don't get it.
 
i have no problem reading a post about a trader or firm blowing up as it brings traders down to earth and reminds us how easy it is for our own accounts to fall due to being compacent. that said, we should NEVER revel is anyone's misfortune.
 
Quote from stock777:

I'm hoping that shorts are crucified by this move as is the Fed.

Put the fear of god into them.

As Dick as Fuld was, if you don't think the short selling community is part of the problem, you don't get it. [/QUOTE

I do get it. You don't see the properly ran companies bitching do you? I hate to see someone loss a job or people loss their savings. HOWEVER...these IBanks got exactly what they deserved.

I have talked to several desks and most; not all...had NO exit strat. or accounted in their risk plan for declining values in homes.
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Not sure why this thread keeps coming back up, LOL. Interesting day, and I'm glad that I spoke to most of my traders on Friday, telling them to expect something "big" to happen over the weekend....not exactly the "what" we expected happened, but certainly the "big" happened.

FWIW, I came in early, checked all the sheets...all is good, and actually a few guys had good positions overall.

Nice short emini position for my brother (of course, LOL).... nice opening for me....it will be an interesting week I think.

All the best,

Don
 
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