Question: What are the best remote options-focused prop firms that will let you trade your own strategy? I'll admit it. I'm new to this world (prop trading). I have a strategy that has been borne out of a decade of investment experience, as an equity trader, analyst, and portfolio manager. I'm in the process of reinventing myself from a long-term investment guy to an options trader. I've seen my strategy best described as a "reverse-dispersion strategy". I don't think this description is entirely accurate, butwhatever. BUT, the strategy needs more capital than I have to execute properly. What are my options (sorry) in the prop trading world? Not enough hour in the next month to read all the prop firm threads, although they ARE very informative.
BTW: dispersion theory says that the parts are more volatile than the whole. You look to buy volatility in the components of an Index and hedge it with selling options on the Index. It does not always line up because so many automated systems are looking to do this. The reverse would be buying index option and sell the options in the components. This a very difficult strategy to implement and the math has to set up, or it's a certain loser. Good luck with that.
Didn't really answer my question, now, did you? I was afraid of this. After having read these forums for awhile, it's clear that 95% of these posts are of the "passive/aggressive, hide behind your handle, don't know shit but read it in a book" variety. Of course, some of us were raised with a dose of "if you have nothing nice to say, don't say anything". Unfortunately, some were not. There. Feel better already. And if the remaining 5% can reply substantively to my original question, I will be very grateful. VG BTW - You may have really meant "good luck with that", but I took it as a snark. I apologize if it was not (but I doubt it).
Outside Chicago, it it difficult to find a Prop firm that allows option trading. I'm assuming you're asking about the Prop model where you become a Class B member and trade with your own capital. Traditional Prop firms that back traders as employees are very difficult to break into. Many Prop firms have closed or are the process of closing because volumes are down and the Clarence firms they need to join with, don't like this business any more. If you have enough assets for a Customer Portfolio Margin account, over $125K at most Online brokers and more at larger brokers, I would start there. See if CPM will provide you with enough leverage to run your strategy.
OK. Thank you. Another dumb question. Why is the minimum that you specify so high, when I see that IB, for instance, has a lower margin account minimum than 125K?
I have never heard of one particular shop that does this. However as prev. poster described volumes are own, as a result I thnk Bright trading has to look for other means to make some money.. if you look around Don Bright is always trolling these boards. Curious what do you kneed prop leverage for with options ? Thnks
$100K is the SEC regulation. If you drop below, you revert to REG-T. IB allows $110K. Anything below $125 is not a good idea especially with a firm like IB that will auto liquidate.
don't we all need to find the firm that will let us put on margin risk far beyond our means, then when it blows up simply walk away. yet, still expecting a chunk of the profits as the penny/bulldozer trade works out. "how can i reap the gains of 'the house' in the casino for only a few chips?" what would reverse dispersion be? a bunch of iron condors on individual stocks with straddles/strangles on the index options? i'd suggest, if your strategy needs ten times more money/margin/leverage than you have to access to, look for another strategy, or, be satisfied with 1/10th of the reward for as long as it continues to work and/or find another edge that is within your means to exploit.