Rumor: Bright Trader blows up and loses millions
- Thread starter Daal
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Don't know Brandon Adams. Don't know Don Bright. All I know is what I've read here to today and what Don has confirmed.
This is a great lessson for many of the young fish on this site that the phrase, "It is double pleasure to deceive the deceiver" is alive and well.
Apparently this guy was sure he had an edge on some inside information or a nod from who know's what... and he went all in. Truth is that a lot of people were very likely unloading thier positions onto him and all of the other losers like him that we'll never hear about.
I can only hope he learns that he was used and begins to understand what about who he is and how he acts led people to identify him as a mark. Otherwise, his life will be a recurrence of this exact type of episode again and again.
This is a great lessson for many of the young fish on this site that the phrase, "It is double pleasure to deceive the deceiver" is alive and well.
Apparently this guy was sure he had an edge on some inside information or a nod from who know's what... and he went all in. Truth is that a lot of people were very likely unloading thier positions onto him and all of the other losers like him that we'll never hear about.
I can only hope he learns that he was used and begins to understand what about who he is and how he acts led people to identify him as a mark. Otherwise, his life will be a recurrence of this exact type of episode again and again.
"Don't risk something you need for something you don't need" - Warren Buffett
Hopefully Mr Adams only risked the money he could afford to lose.
IMO all traders no matter how talented should not trade serious size until they have had a hot streak, run into a big drawdown, and then had to claw their way back to a new equity high. Until you experience the stomach churning of a big loss, you won't know how to handle it (which is to immediately cut size and play defence after the first big losing trade/day). If Bright exercised this policy (presuming they didn't) then he would have made less money on the way up but would be ahead of the game still, the debit would have been avoided and commissions and future trading profit would be more likely to be generated. The reputational damage should also be considered (for both sides).
Losing 10% in a day, cutting size, then clawing back is one thing. Losing 50% in 2 days, then tilting all-in a month later to not only wipe out but go into debit, is just crazy. IMO this is a failure not just of the trader but of the management at Bright. No one's interests are served by allowing excessive leverage of the trader's option.
Still, all market losses can be viewed as tuition. If the guy has the perseverance and ability, he will find a way back. And I assume Bright can handle the loss no problem.
Hopefully Mr Adams only risked the money he could afford to lose.
IMO all traders no matter how talented should not trade serious size until they have had a hot streak, run into a big drawdown, and then had to claw their way back to a new equity high. Until you experience the stomach churning of a big loss, you won't know how to handle it (which is to immediately cut size and play defence after the first big losing trade/day). If Bright exercised this policy (presuming they didn't) then he would have made less money on the way up but would be ahead of the game still, the debit would have been avoided and commissions and future trading profit would be more likely to be generated. The reputational damage should also be considered (for both sides).
Losing 10% in a day, cutting size, then clawing back is one thing. Losing 50% in 2 days, then tilting all-in a month later to not only wipe out but go into debit, is just crazy. IMO this is a failure not just of the trader but of the management at Bright. No one's interests are served by allowing excessive leverage of the trader's option.
Still, all market losses can be viewed as tuition. If the guy has the perseverance and ability, he will find a way back. And I assume Bright can handle the loss no problem.
Don â how are you guaranteeing that Brandonâs losses are not pooled against other traderâs equity? If youâd get specific on this point, Iâd venture to guess youâd quell the pace of this thread.
Simply saying it isnât so isnât enough. And, you can bet every Bright trader is reading this thread. You have nothing to lose by being more upfront regarding how this loss is being accounted for at your firm. It is only fair given that you take every chance you get to highlight how Bright stands above the pack with respect to financial solvency in the prop trading business.
Simply saying it isnât so isnât enough. And, you can bet every Bright trader is reading this thread. You have nothing to lose by being more upfront regarding how this loss is being accounted for at your firm. It is only fair given that you take every chance you get to highlight how Bright stands above the pack with respect to financial solvency in the prop trading business.
Ill handle this one Don
Back in 1992 when Bright Trading started, they set up Class A and Class B shares. Class B is all of the trader money, plus at minimum $10 million of Bright money. In order for traders equity to be at risk, the trader must blow up through their own equity, at least $10 million of Bright money (which of course it is much more than that, LOL).
Did I mention Bright Trading has been with the same clearing company, SLK (now Goldman) since they started, provides great leverage, on going education, and Don is always only a call away? If your lucky, you might even get invited to a poker game with Bob and Steven Spielberg!
Check the balance sheet!
(can i have a job, Don? LOL)
Quote from Szeven:
Ill handle this one Don
Back in 1992 when Bright Trading started, they set up Class A and Class B shares. Class B is all of the trader money, plus at minimum $10 million of Bright money. In order for traders equity to be at risk, the trader must blow up through their own equity, at least $10 million of Bright money (which of course it is much more than that, LOL).
Did I mention Bright Trading has been with the same clearing company, SLK (now Goldman) since they started, provides great leverage, on going education, and Don is always only a call away? If your lucky, you might even get invited to a poker game with Bob and Steven Spielberg!
Check the balance sheet!
(can i have a job, Don? LOL)
LOL, well since I just got home from some surgery in the hospital (all is good, just cutting out some skin cancer etc.), I'm glad to see you handled this answer for me. And, FWIW, there is much more than the guaranteed $10mil in there, but we always keep that minimum..."just in case."
All the best,
Don
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