Alternative leverage methods?

Discussion in 'Trading' started by GordonTheGekko, Oct 5, 2011.

  1. GordonTheGekko

    GordonTheGekko Guest

    A friend has less than $12k to invest. Unfortunately one must have a minimum of $25k to day trade.

    Are there alternative ways to, for example, setting up a London-based account so one may have 10:1 leverage+?
     
  2. This limit (Pattern Day Trading Rule?) applies to US stock trading accounts, but not to accounts for trading other instruments (futures, currencies, etc)...
     
  3. GordonTheGekko

    GordonTheGekko Guest

    The VIX futures trade tick for tick (almost) in line with the S&P 500 index, on a very short term intraday basis.

    So you're suggesting with small capital, that staying in the futures market will be the trick? :cool:
     
  4. better to lose 12K than 25K

    Tell him its better that way, losing 12K instead of 120K
     
  5. If you've got a system that can trade long options, they are just like extra-mini futures contracts (huge leverage).

    Because of this, you can trade a small account with the same money management rules that the big boys use in their managed futures systems, if you can find enough volume.
     
  6. GordonTheGekko

    GordonTheGekko Guest

    Are there methods where one can still invest in American stock tickers (such as AAPL) without the 25k min day trading rule?
     
  7. As long as you don't do more than 3 round trips in a 5 business day period you can do it with under $25k.
     
  8. GordonTheGekko


    Registered: Feb 2011
    Posts: 233


    10-05-11 10:01 AM

    A friend has less than $12k to invest. Unfortunately one must have a minimum of $25k to day trade.

    Are there alternative ways to, for example, setting up a London-based account so one may have 10:1 leverage+?





    Prop firms will let you trade with $12k, some even less.
     
  9. You can open two accounts, each with 6K and trade the first 3 days using the first account, and another 3 days using another account.

    To be honest, anyone has so tiny capital (< 12K) should NOT day trade. This amatuer group are definitely the main target for the broker and some snake oil self proclaimed mentor.

    Sometime I day trade more than 50 ES contracts or 2.5K of SPY and this has not even come any close to my margin.

    The amount of capital could tell the skill of the trader.
     
  10. LeeD

    LeeD

    If you are not located in the US spreadbetting firms are another alternative.
     
    #10     Oct 8, 2011