WHats going on with Andover?

Lights · Nov 3, 2003

Quote from Don Bright:

There is a few pages on this in the regulations. But, I will summarize.

Take all the stock positions, long and short, and you must have the capital to cover them. So when you "give leverage" or allow the "use of capital" (as we do), then you must have enough $$ to cover everyone.

If you put up $25K, and yet "use" (as opposed to "abuse") capital of $1 million, then your firm must have enough $$ to cover all your positions. Many firms need to use all the other traders money to make this happen, some have adequate capital without it.

Don

Question for you. Maybe this was discussed elsewhere, but how can a firm (like yours) require people to put up $25k capital for 100% payout and give a million dollar leverage? My understanding is that when a firm pays out 100% they are retail and subject to 4:1 daytrading margin and 2:1 overnights. Is it simply a firm's willingness to eat trader's losses that makes it a prop firm??

Thanks in advance..

Lights

Don Bright · Nov 3, 2003

Quote from Lights:

Question for you. Maybe this was discussed elsewhere, but how can a firm (like yours) require people to put up $25k capital for 100% payout and give a million dollar leverage? My understanding is that when a firm pays out 100% they are retail and subject to 4:1 daytrading margin and 2:1 overnights. Is it simply a firm's willingness to eat trader's losses that makes it a prop firm??

Thanks in advance..

Lights

Our traders trade with our capital...we can choose to "pay out" whatever we like, and over the years we moved up to a max of 100%.. Most of the better firms pay out 100% nowdays. Our retail wing Bright Securities is subject to the PDT rules.

We certainly aren't "willing" to take a traders losses, but fully understand that it does happen. A 'prop' or "professional" firm allows use of capital...that is the primary distinction.

We, as exchange members, don't have to route our traders orders through a retail brokerage account (as do the retail PDT "DAT" firms). This is another "primary distinction"...

Feel free to call me directly with any questions.

Don Bright 800.249.7488

Mecro · Nov 3, 2003

Quote from fattyasids:

To me, it doesn't matter if you're a churner or trader according to your terminology as long as you make money. But, I still see churners as traders. You have to make decisions when to buy and sell - just on a shorter time frame. I made one comment about an office that I didn't specify about it having low volume traders and you get all over my case. What's your problem? If you don't want my opinions, then ignore them.

My mistake, you are not a piker, I am. In that case I'm damn proud that I can trade very little volume and keep 80%+ of my gross, instead of churning, doing heavy volume and keeping about 25% of the gross.

Your initial comment and opinion was made in a degrading manner, all based on volume. I do not understand why a trader would care how much volume is generated, as far as one is profitable. Hence I do not understand why you even made that comment unless you associate pikers with bad traders.

Avalanche · Nov 3, 2003

A "piker" in the context of trading, doesn't have anything to do with volume. Bad trading....yeah maybe, but for the most part, The best definition of a piker is a trader that gives mininum effort, or thinks they know more or trade better than they actually do. Or occassionally they may just be inexperienced.

That is they they just show up/log in (whatever) and then bitch and moan about not making any money. Or they miss the best day of the year because they were playing golf. Or they come here to ET and post like they wrote the book on some methodology or something, when its obvious to most of us that a 100 lot is probably a size position for them. :eek:

"TTKA

though"

PHI PHI.

;-)

i'mlong · Nov 3, 2003

Quote from Avalanche:

A "piker" in the context of trading, doesn't have anything to do with volume. Bad trading....yeah maybe, but for the most part, The best definition of a piker is a trader that gives mininum effort, or thinks they know more or trade better than they actually do. Or occassionally they may just be inexperienced.

That is they they just show up/log in (whatever) and then bitch and moan about not making any money. Or they miss the best day of the year because they were playing golf. Or they come here to ET and post like they wrote the book on some methodology or something, when its obvious to most of us that a 100 lot is probably a size position for them. :eek:

"TTKA though"

PHI PHI.

;-)

Well, I disagree, I know a lot of traders who bitch and moan AND do size and NO One calls them a piker. It does have something to do with volume.

Avalanche · Nov 4, 2003

Quote from i'mlong:

Well, I disagree, I know a lot of traders who bitch and moan AND do size and NO One calls them a piker. It does have something to do with volume.

Well, Size and Volume are two different things. If someone is trading size (5,000 shares or bigger) then they would normally be experienced, and likely focused, etc. If someone is trading 100,000 shares a day or more, same thing, likely they have built up to that and know what they are doing.

That is someone that trades size and volume probably knows what they are doing and have worked hard to build up to that.

My comments were mainly to the point that the term piker as I've heard it used is usually used in the context of someone not giving a full effort. Volume does not necessarily equate to effort to me. It certainly can, but it doesn't "have to".

Like if I leave early in the day, the guy next to me will go, "Your leaving after two hours? You fucking piker. LOL.

There are a lot of guys I know that trade low volume, smaller size and they are making a lot more than the high vol guys because instead of averaging 1-2 cents per trader their focus is more on doubles and triples. They work just as hard often harder. They don't derserve to be called Pikers do they just because they don't throw around a lot of shares?

anyway just my 2 cents, didn't mean to start a debate on semantics.

G-Man · Nov 4, 2003

Well I have been in the business a while but i have always thought the term "piker" always had a negative connotation and simply referred to a poor trader or as mentioned before one who gave little effort. I never really thought it had to do with volume per se though most newer, inexperienced traders and bad traders were typically low volume traders, and thus were called pikers. I probably would have called a high volume churner who barely breaks gross positive a piker too. But i would have never called a good low volume trader a piker. Maybe i had my definiton of a "piker" wrong all along and you are correct but I'd be willing to bet there are others on the board who thought the same as me. Maybe that's why you caught so much anger over your statement regarding pikers. Just my 2 cents.

shneed · Nov 4, 2003

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sdtrader · Nov 4, 2003

You guys are arguing over semantics of industry slang. There is no right or wrong answer.

fattyasids · Nov 4, 2003

Quote from G-Man:

Well I have been in the business a while but i have always thought the term "piker" always had a negative connotation and simply referred to a poor trader or as mentioned before one who gave little effort. I never really thought it had to do with volume per se though most newer, inexperienced traders and bad traders were typically low volume traders, and thus were called pikers. I probably would have called a high volume churner who barely breaks gross positive a piker too. But i would have never called a good low volume trader a piker. Maybe i had my definiton of a "piker" wrong all along and you are correct but I'd be willing to bet there are others on the board who thought the same as me. Maybe that's why you caught so much anger over your statement regarding pikers. Just my 2 cents.

Well, I prefaced it by saying guys in that particular office did low volume. I did not make any comments that they were poor traders. There are different definitions to every word. This is bullshit that this thread has turned into this.

For example, you can say a "good" trader does 20k shares a day and makes $500 a day. But, in other people's minds, that could suck. Some people need to make $1,000 a day to pay their bills. I just picked arbitrary numbers so don't start an argument on this too. There are different ways to define a simple word like "good". Do we have to have define every term we use?