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Sunday, March 28, 1999
Copyright © Las Vegas Review-Journal
Minute-By-Minute Man
Day trader Bob Bright swings with the stock market
By John G. Edwards
Review-Journal
Bob Bright figures his future is pretty bright.
Bright's speciality is day trading, the buying and selling of stocks daily, often in large blocks, in hopes of making profits on small moves in stock prices.
The popularity of day trading continues to grow as the bull market for stocks continues, said Bright, president of privately owned Las Vegas-based Bright Trading Inc.
In addition, his business of providing day traders with computerized access to stocks has spread across the country thanks to technology, he said. No longer does a trader need an office in a firm on Wall Street to engage in rapid-fire purchases and sales of stocks.
Charles Moore, securities administrator for the secretary of state, agreed. However, Moore said studies indicate fewer than 10 percent of the day traders are "making any profit at all," Moore said.
Bright said the percentage is even lower than that when day traders who work out of their homes are included. By contrast, his clients are professionals who work out of his trading room and have direct access to the stock exchanges and other benefits not available to retail customers of brokerages, Bright said.
"(Day traders) should be sophisticated investors who are able to bear the risk of loss of their investments," Moore said.
The state regulator said he doubts that many are knowledgeable enough and wealthy enough to take the risk.
"A lot of people don't make money," Bright said.
A good trader can take home $1 million a year, however, he said.
Bright said the people who take his one-week, $1,000 trading course are professionals. Bright and his brother, Don Bright, plan to start a talk radio program at 10 a.m. today on KNUU-970 AM.
It seems apparent that Bright Trading is doing well. The company said it plans to invest $750,000 in a 5,000-square-foot Las Vegas building with a visitors' gallery, training room and trading room.
Bright started the firm in 1992 and now serves more than 300 traders in 28 offices around the United States.
"The first 100 probably came from the (stock) exchanges," he said. "Then, we started growing the industry from all walks of life."
About two-thirds of day traders "wash out" of the industry in their first year, Bright estimated. The survival rate then flip flops with about two-thirds staying active for several years or more.
"A lot of (early dropouts) didn't know it's hard work," Bright said. "It really is. The good day traders are all hard-working people."
Bright trains traders to "read the tape" of stock trades. The expression refers to the telegraphic ticker tape that investors and brokers used to follow the stock market earlier during the century. The modern-day equivalent of the tape appears on computer screens.
Traders today look at computer screens that show each individual stock trade, including the amount that changed hands.
Good stock traders aren't gamblers, Bright said.
"Our traders don't gamble, just like blackjack card counters don't gamble," he said. "They only make a trade when they have an edge."
Bright himself left the industry after Black Monday in October 1987. He backed off, because of low interest in day trading. At that time, he had to live in Chicago to do his day trading.
Because of technological advances, "now you can trade from any city, including Las Vegas," Bright said.
He counts about half a dozen day trading firms like his around the country. Las Vegas had about two other day trading firms in the last couple of years, but they offered only retail accounts and have closed their Las Vegas operations.
A bear market sell-off of stocks won't necessarily hurt day traders, Bright said. They can sell stock short, that is borrow stock for sale at a profit later at a lower price.
"Traders make more money in down markets. Down markets are faster moving," he explained.
On a recent day, Bright and about a dozen traders watched excitedly as the Dow Jones crossed the 10,000 mark, only to dip below that milestone at the close.
So what does he think the stock market will do over the next few years? Bright has no answer.
"Professional traders," he said, "usually don't try to predict the market out more than six minutes."
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Printable version of this story
Day trader Bob Bright's monitor, above, on March 18 shows his early-morning mission: selling 4,000 shares of America Online at $108.75 and buying 2,000 shares at $108.06. During the day, while AOL shares climbed more than $7, he made 45 trades on the stock for 111,500 shares. "I had a good day," said Bright, who made about $18,000.
Photo by Gary Thompson.
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