Rumor: Bright Trader blows up and loses millions

[ElCubano]

Quote from Pa(b)st Prime:

Even Jim Plunkett won a Super Bowl because he could throw the bomb.

on the flip side...the best arm ever known to football didn't get a ring.... Moral of the story....swing big and hard....peace

 

[kinggyppo]

for schadenfraude:

http://www.youtube.com/watch?v=ELUmORPMVyU

 

[BeatingtheSP500]

Was that Brandon?

 

[Don Bright]

Quote from gwac:

Don I really respect your contributions but this is just plan bad
risk controls. You always need to plan for the worst.
Every trade, plan for the worst, there is no way he should have been allowed to get into such a situation especially in this market.

Every case is different.....and the "impact" if any was so minimal that, as I stated before, our changes will help traders going forward. Compared to the banks and brokers, I would say a 1 or 2% "hit" every couple of decades would show pretty good risk control.

But, yes, we have tightened things in that aspect of the industry and within Bright.


All the best,

Don

 

[gwac]

True but

There is a difference in going all in with 10k versus millions!

Quote from trader_arb:

Not sure how you manage fat tails. OTM puts?

The only way to do this is through some form of hedging, which will usually wipe out a high percentage of the gains you would have had over time.

Gains come from risks, if you try to protect yourself from any and all risk you will be back to earning the RISK FREE RATE...or no returns at all after commissions/taxes. (unless you can find an arb)

 

[JamesVU2000]

Im actually impressed Bright let him have that much leverage. I might open an account.

 

[Don Bright]

Quote from gwac:

Has nothing to do with hyenas. It should never happen, if you are up millions and especially if you are working for someone else, a trader should never have control of that much stock that could wipe him out. That is what controls are for.

FWIW, Brandon was/is working for himself, within our organization.

Don't make too much out of this guys. A guy who makes a few million, may lose it back...it happens...a bummer, but it happens.


Don

 

[gwac]

Now that I think about the Prop format, you are really not responsible to protect the trader from themselves. I worked for a financial Inst, I was playing with their money so they did not want me to blow up the shop.


Keep up the good work....always enjoy reading your posts.

Quote from Don Bright:

Every case is different.....and the "impact" if any was so minimal that, as I stated before, our changes will help traders going forward. Compared to the banks and brokers, I would say a 1 or 2% "hit" every couple of decades would show pretty good risk control.

But, yes, we have tightened things in that aspect of the industry and within Bright.


All the best,

Don

 

[trader_arb]

Quote from gwac:

True but

There is a difference in going all in with 10k versus millions!

Definitely - so you mean money management, not fat tail management?

 

[gwac]

same thing... Managing unexpected events is part of money management

Quote from trader_arb:

Definitely - so you mean money management, not fat tail management?