Trading firm gambles on high-tech tools

But then again, owner Bob Bright has long known how to work an edge, right down to the penny.

More than 500 traders in 42 offices around the country who work for Bright's proprietary trading firm use satellite uplinks, fiber optics and artificial intelligence software to gain a few seconds on the competition.

Las Vegas-based Bright Trading is funded by First Options of Chicago Inc., a provider of clearance and execution services. First Options loans Bright trading money, and traders get up to US$25,000 to purchase stock. By being fastest to the punch on buying low and selling high in volume, experienced traders can perform as many as 300 trades per day, buying and selling as many as 200,000 shares.

"You only have to make a penny. That's $2,000 a day. Not a bad income," Bright said. "We don't have gunslingers or investors who want to sit back with their feet on the desk. We have professionals on the edge of their seats each day who want to make some trades."

Bright's software can be configured with rules to provide traders with alerts to stocks fluctuating in price, or the software can perform complex predictive equations. Some versions even perform automatic trades.

According to Damon Kovelsky, an analyst at Meridien Research Inc. in Newton, Mass., sophisticated software for traders has only recently begun to filter into the retail community, mainly because of advances in computing power in non-networked PCs.

But even with the power to run the software, traders must be trained to interpret the numbers that are a result of calculus-based formulas.

"It isn't going to buy, sell or hold stocks for you, and it's definitely not going tell you to buy at 55 1/2," Kovelsky said. "There's a whole professional class of people who work at banks who do this for a living. A lot of them have Ph.D.s in physics."

Bright relies on monthly training seminars for his traders to keep them up to date on use of the software, market trends and strategies.

Since opening in 1992, Bright Trading has grown between 50 percent and 100 percent per year.

Bright's love of technology is rubbing off on his younger traders. Some of them write their own macros and programs to screen stocks and alert them to potential hot buys.

Bright was formerly a financial controller at a financial services firm, but after reading a number of books about card counting, he decided to move to Las Vegas to be a professional gambler in the 1980s.

One day, he met Eddie Franco at a card table and the two hatched a stock-trading philosophy that followed the science of card counting -- many hands with small winnings equals big money. Franco is now Bright's chief operating officer.

Still, Bright says he doesn't consider himself a gambler. As he puts it, "Why would anyone put a quarter in a slot machine?" Instead, he said, he considers himself a "statistical probabilist."

"All of us professional gamblers don't really gamble," he said. "But if it's statistically probable that we'll win, we bet."

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