The Perfect Prop Firm

yes that explains it. sounds more like trading than propping. That's cool, most of us like this risky business.

If I can ever consistently beat the long bond I'll take you up on that cell phone office visit offer.
 
Or they can set up different arms that are educational and they make $X per trader they get to take courses.

Then on the trading end that trader is already a net positive to the firm so whatever little they make going forward is gravy.

Obviously not big bucks so I guess they need new accounts (traders).
 
Quote from Don Bright:

Hi all, not sure what's going on here in general, but let me say a couple of things (since my name has been mentioned a couple of times).

The "floor trader model" which we engage in has a few good years left in it, IMO. Trading is a business, and if your trading business has only about $20,000 but good trading ideas, and more capital and tools would help, then we can be of service.

The 'pure prop' model has the inherent trappings mentioned in a couple of posts already.

If you're trying to trade retail, with wash sales and all the rest, then going with a Firm like ours (not many left) might be a good idea.

I have spoken with Maverick, and we discussed the future of trading overall. I think we agree that traders need somewhere to trade, since not everyone can buy a BD, an exchange membership, and fulfill all the regulatory requirementsl to go completely on their own. Again, that's where we come in. Sorry if this sounds like "selling" or "marketing" - I like to think it just "is what it is" - as they say.

As Maverick inferred, access to your money, safety, and all the rest, is what most traders look for in their "partner" - their trading firm.

All the best,

Don
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Don, you might want to take a few minutes and read the entire thread. You will find it entertaining. LOL. And I mentioned your name specifically so your algo would spot it and get you in here! So predictable. :)
 
Quote from Maverick74:

Don, you might want to take a few minutes and read the entire thread. You will find it entertaining. LOL. And I mentioned your name specifically so your algo would spot it and get you in here! Sp predictable. :)
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Algo? Didn't think I was so talented did you?


Don :)
 
Quote from oldtime:

yes that explains it. sounds more like trading than propping. That's cool, most of us like this risky business.

If I can ever consistently beat the long bond I'll take you up on that cell phone office visit offer.
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Sure, glad to help.


Don
 
Quote from Maverick74:

Sure, Don Bright is still running that model. But even Don told me, the writing is on the wall and he is unsure how long they, as a firm, can sustain that model. We have had private talks and I told Don those talks would stay private, but it was about the math that firms currently have to deal with and the numbers really aren't there. Every year Don has to cut his rates and every year, he has fewer traders trading less volume. This is a race to zero. This doesn't affect you personally only in that perhaps the firms like Bright Trading may not be around in 3 years. I've asked Don repeatedly why even bother. The numbers are horrible. I wouldn't recommend anyone to start a deposit prop firm today. One of the worst business I can think of.

What I see happening is this: the model is going to change. It's going to a zero rate model, this means you trade at firm cost. You give up a bigger % of your profits, but in return you get access to better technology and customized software (not off the shelf stuff like Sterling or Lightspeed). The technology would not be on par with say Citadel, but it would be top notch. This would be paid for through "some" of your p&l, and not from your commissions.

You would still get the leverage. But the focus would be to tap into the huge over supply of talented programmers out there and offer access to real customized solutions and zero to low cost of doing business. That is where I think the model is going in my honest opinion.
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I have to agree with your view on where the industry is headed. Cutting rates to the bone but taking a chunk of a trader's p/l, that's probably the worst proposition for me as a low volume trader but seems to be the only future route. But giving up even 10% of P/L for the same leverage just isn't worth it, and in this market there are limits to how much capital can be applied to shorter time frames, depending what names you are trading. So I'm guessing this change would drive a number of traders towards plain 4x retail, like IB. If you've been profitable, you can put up capital for enough bp, and at least it will be in a larger firm with a much smaller chance of going under suddenly (not to mention SIPC).

Could you elaborate on taking advantage of "talented programmers" and "customized solutions" a bit more? Are you referring to firms taking advantage, or traders? Because even as crappy as IB's platform is for short-term trading, or however inferior you feel something like LS is, I don't think any individual trader in this market is thriving right now by beating the HFT's and market makers in their own game. I'm directional and intraday, but not scalping -- pretty much all that this market has left for a small individual trader like myself who's adapted out of necessity. What's a few more mili-seconds worth for a trader like myself? Not much at all. Will I find myself in a no-man's land in the near future then?
 
Quote from illiquid:

I have to agree with your view on where the industry is headed. Cutting rates to the bone but taking a chunk of a trader's p/l, that's probably the worst proposition for me as a low volume trader but seems to be the only future route. But giving up even 10% of P/L for the same leverage just isn't worth it, and in this market there are limits to how much capital can be applied to shorter time frames, depending what names you are trading. So I'm guessing this change would drive a number of traders towards plain 4x retail, like IB. If you've been profitable, you can put up capital for enough bp, and at least it will be in a larger firm with a much smaller chance of going under suddenly (not to mention SIPC).

Could you elaborate on taking advantage of "talented programmers" and "customized solutions" a bit more? Are you referring to firms taking advantage, or traders? Because even as crappy as IB's platform is for short-term trading, or however inferior you feel something like LS is, I don't think any individual trader in this market is thriving right now by beating the HFT's and market makers in their own game. I'm directional and intraday, but not scalping -- pretty much all that this market has left for a small individual trader like myself who's adapted out of necessity. What's a few more mili-seconds worth for a trader like myself? Not much at all. Will I find myself in a no-man's land in the near future then?
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Well if you are a low volume low frequency directional stock trader I'm surprised you are not at IB right now. In the last few years, retail brokers have stepped up their technology to be reasonable for the less active stock guy. IB comes in tops on rates and Trade Station is more expensive but a little better software.

The software I'm talking about will benefit option guys, futures spreaders and equity guys utilizing more active and more sophisticated and more creative strategies. Believe me, none of this will compete with HFT's, they trade in nano seconds. The model I'm describing is geared more towards the creative type. Guys who think outside the box and engaging in strategies that need more support.
 
Quote from Maverick74:

Well if you are a low volume low frequency directional stock trader I'm surprised you are not at IB right now. In the last few years, retail brokers have stepped up their technology to be reasonable for the less active stock guy. IB comes in tops on rates and Trade Station is more expensive but a little better software.

The software I'm talking about will benefit option guys, futures spreaders and equity guys utilizing more active and more sophisticated and more creative strategies. Believe me, none of this will compete with HFT's, they trade in nano seconds. The model I'm describing is geared more towards the creative type. Guys who think outside the box and engaging in strategies that need more support.
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Ok thanks for the info. I do have an IB account concurrent with my prop; if I have to adapt again, I will. But right now there are just things that are alot easier to see and execute on a lightspeed platform vs TWS.
 
Quote from illiquid:

Ok thanks for the info. I do have an IB account concurrent with my prop; if I have to adapt again, I will. But right now there are just things that are alot easier to see and execute on a lightspeed platform vs TWS.
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Can you give some examples of what those things are ? I have traded only on TWS so will be interested to see in what respect you find lightspeed much better? Thanks
 
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