Customers who maintain a balanced portfolio of hedged positions could benefit from lower margin requirements and greater leverage using IB's Portfolio Margin account. Customers who are currently approved for options trading and who maintain an account minimum of USD 110,000 are eligible to apply for an account upgrade to Portfolio Margin. Portfolio Margin is calculated for cash and equity products only; futures margin is always calculated and applied separately using the SPAN margin algorithm.
I have been in this business a long time. The worst think any business can do is try to run a business under capitalized. In my opinion, with $110k, you will always be worried about losing money, not concentrating on making money. I recommend $125K as minimum, but more is better. $125K allows you a 25% draw down.
1245
Good information people...this is a business, and most business ventures die from lack of capital.
I would also add that if you have a 25% drawdown, you are not managing your risk very well as a trader and probably swinging for the fence. After years of chasing returns, Ive learned that it's best to focus on how much you can lose versus how much you can Make Can't control how much the market gives you, but you can control how much it takes away if you stay cognizant of the risk of losing capital.
Don thanks for the info. Hope you appreciated the tee up to talk about Bright.
Just out of curiousity, have you all thought about what happens to Bright when you and your brother decide to retire? Any succession planning being discussed about preserving the bright legacy?
I would also add that if you have a 25% drawdown, you are not managing your risk very well as a trader and probably swinging for the fence. After years of chasing returns, Ive learned that it's best to focus on how much you can lose versus how much you can Make Can't control how much the market gives you, but you can control how much it takes away if you stay cognizant of the risk of losing capital.
Don thanks for the info. Hope you appreciated the tee up to talk about Bright.
Just out of curiousity, have you all thought about what happens to Bright when you and your brother decide to retire? Any succession planning being discussed about preserving the bright legacy?
We have several options available, and Bob has 4 kids, and we have some good people willing and able to take over if need be. Our traders won't miss a beat..... and Heck, Bob is 10 years older than me, and has 10 times more stamina, and isn't planning on going anywhere for while.
After speaking with IB about Front end, which I guess they do offer, and portfolio margin. I also spoke with my friends who own MB Trading. All is ok with IB and their front end, just an additional cost, so I doubt my traders will pay for that. I will make it available, if GS agrees.
Regarding PM, there is another major concern of course. As it was pointed out to me by Goldman, MB, and IB - there is an over-riding parameter called "Risk Margin" - which basically redefines the whole thing of capital usage.
We set up a private family fund, which is retail, with GS. And thought we would get 6 to one leverage as well. Well, no we didn't - if we had naked positions, or were deemed to too concentrated in one group or stock, then they would just ask for more money.
When I spoke with the (very nice and knowledgeable) Compliance people at MBTRading, they explained the same thing. Same with IB.
Some asked the difference with becoming a Bright Trader. Simple, you're using our capital, and we design the parameters based on many things. Your performance, your acct balance, your history with the Firm, etc. We won't limit you to PM, unless of course we (you and us) decide you need it, LOL.
Don
I've used RediPlus and TWS. Redi is in a different league and so is GSEC.
