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| Tuesday, June 20, 2000
Copyright © Las Vegas Review-Journal TRADE TO ORDER Local businessman teaches day trading techniques By John G. Edwards
Review-Journal Robert Bright quit a management job with Johns Manville Corp. in the '70s, moved his wife and three children to Las Vegas and became a professional blackjack player.
Bright, now 60, has made good money taking big risks. He continues to do so today as chief executive officer of Bright Trading, one of the nation's largest day-trading firms.
His company trains people from all sorts of backgrounds on how to day trade millions of dollars of stock.
Day traders buy and sell large blocks of stock in hopes of profiting from up-and-down price moves. Day traders typically sell all of their holdings at the end of the day, but sometimes they hold shares less than a minute before selling.
"We provide the grease that turns the wheels of capitalism," Bright explained.
"Without day traders, there would be illiquidity in the marketplace," he said. In other words, investors might have difficulty finding buyers when they wanted to sell their holdings and sellers when they wanted to buy.
Bright grew up in Long Beach, Calif., later graduating with a bachelor of science degree in accounting from California College of Commerce. He career started off on a traditional path.
He joined Johns Manville Corp. as an administrative assistant to a plant superintendent.
He resigned 12 years later as financial controller for multiple plants. He concluded that he wasn't going to advance farther at the company.
"You either had to have a father on the board or a (degree from) a prestigious school," he said.
So he came to Las Vegas and played blackjack for a living. Bright was married and had three children, the oldest of them was 8. But he was undaunted.
"These casinos are easy to beat if you count cards, but that's the only way you can do it," he said.
In 1978, he joined the Pacific Stock Exchange and started trading options.
He made his first million and lost it in 1979; and then did the same thing again in 1980. In 1982, he made $2 million and swore he wouldn't lose it back to the market. His big year was 1984 when he earned $16 million.
In 1983, he joined the Chicago Mercantile Exchange and Chicago Board Options Exchange. He made money by arbitraging products based on the Standard & Poor's 500 index of largest publicly held domestic companies.
Arbitrage is the art of making a profit from differences in price when the same security or currency is traded in two or more markets.
Bright retired a couple of times -- first in 1985 and later in 1988.
"I had all the money I needed," he said. "(However) I tired of watching Oprah."
So he started Bright Trading in 1992 when electronic trading was becoming a feasible alternative to traditional trading floors. No longer did a trader need a membership on a major exchange. Anyone anywhere with a telephone and computer could be connected to trading floors.
"Even in the '70s, I used to think it was silly to stand around pushing and shoving to get your trading done," Bright said. "I felt it was silly to travel to a city that had a stock exchange."
That's no longer necessary, he said.
"Ninety percent of the orders come through electronically as it is now," he said.
Bright's said his partner, Eddie Franco, was the first electronic trader on the West Coast. Together, they were a team.
"I had the capital. He had the idea," Bright said. "The system worked out. Right away, professional traders started asking if they could join us. We made the decision back then to take the trading out to Main Street America."
The technology and trading firms such as Bright's democratized day trading.
"It used to be a closed club," he said.
Bright operates a one-week school for day trading. He has found that the best students often are "game theory people," like Chris Ferguson who won the World Series of Poker tournament at Binion's Horseshoe this year. Ferguson is one of the day traders who work out of Bright's Las Vegas trading center.
"They understand risks and rewards and statistics and are quick on decision making," Bright said.
Bright advises readers not to try day trading at home with a conventional brokerage account.
To succeed, a day trader needs direct access to the market for quick execution of buy and sell trade orders, as well as low commissions. Bright's traders pay about 1 cent a share in commission or $1 per hundred shares, compared with about $100 a share at a typical full-service brokerage.
"You need half a million to work with to have a chance of making a decent living with the stock market," Bright said.
His traders put up a $25,000 performance bond and he provides them capital based on their experience and skill.
"It takes a good year or longer to learn enough to become profitable," he said.
About two-thirds of his students drop out in the first year either because they lose money, don't make enough money or don't like the hard work. Of those remaining, about one third remain day traders for life, he said.
Bright counts 350 traders working at 35 Bright Trading offices around the country.
Once again, the market appears to be changing. Bright believes the market may remain flat, with no lasting major changes up or down for a decade. That makes mutual funds look like dinosaurs with fees that continually eat away at the investors assets.
Bright recommends long-term investors consider exchange traded funds instead, products such as Spiders which track the S&P 500, Diamonds which follow movements in the Dow Jones industrial average and so-called QQQs that replicate the largest stocks traded on Nasdaq.
Skilled day traders, he figured, will prosper in good markets and bad.
NEVADANS AT WORK
Name: Robert A. Bright.
Position: Chief executive officer and president, Bright Trading.
Age: 60.
Family: Wife, Pamela, and four adult children: Tammy Bright, Kelly Schwalbe, Bobby Bright Jr., and Christy Bright.
Education: Bachelor of science degree in accounting from California College of Commerce and bachelor's in management, including casino management, from the University of Nevada, Las Vegas.
Work History: Worked at Johns Manville Corp. for 12 years, reaching the position of financial controller for multiple plants; blackjack player in Las Vegas; started trading options in 1978; joined the Chicago Mercantile Exchange and Chicago Board Options Exchange in 1983; started Bright Trading in 1992.
Hobbies: Playing blackjack, watching movies and reading management books.
How long in Las Vegas: A resident off and on since 1974.
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Robert Bright, chief executive officer of Bright Trading, trains people from all backgrounds on how to day trade millions of dollars worth of stock. He said the best day traders are "game theory people" who understand risks, rewards and statistics and are quick decision makers.
Photo by Steve Andrascik.
Robert Bright
CEO, Bright Trading
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