Zero Downside second account

D

Don Bright

Hi everyone...since I've been chatting about our "JVC" (Joint Venture Club) with so many of you on the phone, I thought I might as well post something up to explain how it works.

For all Bright Traders with active accounts: They may choose to add another sub-account as part of my brother's JVC group. They will be using a fully automated pairs program in this second account. They will split profits 50/50 with a $10,000 downside limit, fully absorbed by my brother.

Traders can take money out when the profits hit $10,000 increments (we have several already, only a few weeks in, and zero who have gone below the $10K negative).

Traders keep their normal trading, and can even use the help they're getting in the JVC program to add to their normal accounts.

The JVC program is highly interactive, with online meetings and help sessions. We have about 100 participants aready involved.

Here is a basic overview. I'll be going more into all this during my next "tour"- Charlotte and Raleigh. March 2 and 3.

http://www.stocktrading.com/jvc.html

Feel free to email with any questions: donbright@brighttrading.net

Don
 
Quote from Don Bright:

They will be using a fully automated pairs program in this second account. They will split profits 50/50 with a $10,000 downside limit, fully absorbed by my brother.



Don
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just curious. if you have a fully automated system what do the traders do?
 
For the life of me, I can't figure out what Bright Trading and its ilk are about. No doubt this marks me as a rube, or worse, but I just don't get it.

Why set up an account for someone to trade where they get to keep half the profits but you absorb 100% of the losses?

Sorry, but I just don't understand how this can be anything but a scam.
 
It's pretty evident that "pairs trading" as an edge is deteriorating, why on earth would you teach or give away anything for free unless it's broken?
 
Quote from illiquid:

It's pretty evident that "pairs trading" as an edge is deteriorating, why on earth would you teach or give away anything for free unless it's broken?
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think about it, though, i think it is showing that their brand of pairtrading might work. i mean, they are willing to suck up the $10k losses IF it were broken and from my limited experience with brother Bob(he has $16 million trading years and still flies in coach class), there is absolutely no way in hell he is going to be giving away even $20. so i would think at worst, it is breakeven and more, is a way to get more traders to join up and if the traders find it is profitable for them, it generates cash from commissions and haircut for the Brights. either that, or they are willing to lose the $10k just to have the noobs burn through their own $25k(avg. contribution, i am guessing) whilst collecting commissions, etc. which of course, doens't add up.
just wondering, Don, if the trader picks wacked pairs for the automated program, are they responsible for the losses or are they closely monitored and will be "coached" and shut down if they start putting on the lower probability spreads? you know what they say, if it sounds too good to be true, eviscerate the messenger...that is, dissect the words as much as humanely possible:)
 
Quote from colonelangus:

think about it, though, i think it is showing that their brand of pairtrading might work. i mean, they are willing to suck up the $10k losses IF it were broken and from my limited experience with brother Bob(he has $16 million trading years and still flies in coach class), there is absolutely no way in hell he is going to be giving away even $20. so i would think at worst, it is breakeven and more, is a way to get more traders to join up and if the traders find it is profitable for them, it generates cash from commissions and haircut for the Brights. either that, or they are willing to lose the $10k just to have the noobs burn through their own $25k(avg. contribution, i am guessing) whilst collecting commissions, etc. which of course, doens't add up.
just wondering, Don, if the trader picks wacked pairs for the automated program, are they responsible for the losses or are they closely monitored and will be "coached" and shut down if they start putting on the lower probability spreads? you know what they say, if it sounds too good to be true, eviscerate the messenger...that is, dissect the words as much as humanely possible:)
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This may be repeating myself, but my best analogy is this. Sittiing at a blackjack table, playing correctly A guy sits next to you who also plays well. He turns to you and says, hey how about I give you half my profits with no downside risk? Well, nearly 150 have signed up so far....

Now, why would the guy stop playing correctly (use "whack" pairs etc.) ? And, overall, they are part of a real trading team that has excellent trading tools made available to them.

And, yes a proven but "different" approach to pairs trading.

We've had several with multiple $10k winners (one or two at $50K up), and zero cut off at this point.

We have traders with very large accounts dive right in.

No haircut, but a 3% annual use of capital fee...much cheaper than normal haircut...heck my Schwab account (for grand kids) charges more than that.

Rates go down as you reach each $10K level, even though starting no higher than .005. some at half that now.

The problem we're having is the management/administration aspect of this...waaay more interrest than we initially thought. I want to get that worked out before I actually open any flood gates via the general public etc.

Anyway, "it is what it is" - and a big hit so far.

All the best,

Don
 
Quote from Don Bright:

This may be repeating myself, but my best analogy is this. Sittiing at a blackjack table, playing correctly A guy sits next to you who also plays well. He turns to you and says, hey how about I give you half my profits with no downside risk? Well, nearly 150 have signed up so far....

Now, why would the guy stop playing correctly (use "whack" pairs etc.) ? And, overall, they are part of a real trading team that has excellent trading tools made available to them.

much thanks for the explanation but as to your why would the guy stop playing "correctly" is because to them, of course, they would not consider the pairs "wacked" but are perhaps the type that like to go for homeruns instead of just consistent singles and doubles and with that, they are putting on the lower probability pairs like maybe HES-CVX with huge differential swings instead of a more reliable/tame HCN-HCP. just different personality types do different things UNLESS they are limited to choose from say the most "reliable" 250 pairs or something like that? seems like would be good for you and for them (to save them from themselves).


And, yes a proven but "different" approach to pairs trading.

We've had several with multiple $10k winners (one or two at $50K up), and zero cut off at this point.

We have traders with very large accounts dive right in.

No haircut, but a 3% annual use of capital fee...much cheaper than normal haircut...heck my Schwab account (for grand kids) charges more than that.

i know your system can work and that is great that you have some new accounts that are doing so well. i was merely pointing out that you will be making money on the commissions and haircut, which goes back to "normal" on the self funded accounts, correct?
i am in no way suggesting it isn't fair, it is just your "pay" for providing the service of teaching and even allowing the holding of a ton of capital overnight. after all, you are running a business. to me, i would be more secure knowing that the people i have my money with are not in financial distress (and are tight regarding compliance issues) as you, like most "props" are LLCs, thus there is no recourse if you go belly up or are shut down.


Rates go down as you reach each $10K level, even though starting no higher than .005. some at half that now.

The problem we're having is the management/administration aspect of this...waaay more interrest than we initially thought. I want to get that worked out before I actually open any flood gates via the general public etc.

Anyway, "it is what it is" - and a big hit so far.

All the best,

Don

yep, seems like it would be tough to manage but if you have none cut off yet, good for you.
you mention "the general public," are you thinking of somehow arranging a sub-LLC that will be exempt from the series 7 requirement?

either way, best of luck to you and your traders
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Quote from garyjohn:

Sounds like the competition is PEEING THEIR PANTS over this offer.

HAHAHAHAHAHAHA.

:D
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surely, GJ, you are not intimating that I am the competition? have you read my other posts as i am the among the least professional "professionals" out there?
bright has their niche as a good place for leverage and overnights (though i believe echo offers about the same regarding haircuts, even better rates, etc.) yes, this sounds like a good offer, seemingly nothing to lose except some time in learning a strategy that is, IMO, as good as anything else out there. however, it is also proven to generate good commish and haircut revenue for the brights. as don said "it is what it is."
STILL, if you are already successful and solely intraday w/ high volume, you are better off elsewhere as even with the rate cut, there are better offers out there.
 
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