Stocks & Commodities V. 24:6 (71): Q&A by Don Bright
SINCE YOU ASKED
Confused about some aspect of trading? Professional trader Don Bright of Bright Trading (www.stocktrading.com), an equity trading corporation, answers a few of your questions. To submit a question, post your question to our website at http://Message-Boards.Traders.com. Answers will be posted there, and selected questions will appear in a future issue of S&C.
PROFESSIONAL VS. RETAIL
Q: I have read some of your articles where you refer to “professional” trading, and wonder what that actually means. In addition, what is the reason for allowing
your traders to use a million dollars of your firm’s capital to trade with? Isn’t that awfully risky, like too much margin?—dtcryer82
A: Good questions! I haven’t written here about “professional” trading in a while, so here goes. When referring to professional trading I mean professional
versus “retail” trading, not versus “amateur” trading. Since around 1998 or so it’s been a requirement that all traders have licenses (at least a Series 7), or else
they are stuck trading with a retail brokerage. The inherent restrictions on retail traders make it virtually impossible for most traders to make money. The main restrictions affect a trader’s use of capital and market access, which leads into your other question.