BP for Non-intra day investing in selling of volatility

Discussion in 'Trading' started by nycderivtrader, Mar 30, 2008.

  1. Question to those who can provide a valuable response:

    Are any of you aware of firms that provide buying power for options portfolios, with capital down. So, for those cynics, firms that provide leverage in order to sell options (yes, pennys in front of a train).

    I am wondering what kind of deals may be out there for a situation like this. What % profit share. Non-intra day investing in selling of volatility.


  2. Is there no one that is aware of this type of offer/agreement?
  3. Not exactly sure what you're asking but there are plenty of firms who will allow you to trade and hold more complex options strategies over night. There are also ways use the firms leverage depending on your background and the capital you bring to the table.
  4. Dipper,

    First, thank you for a reply.

    I am aware there are plenty of firms the provide buying power for equities, but I am not aware of firms that will provide additional buying power for the use in selling options- for example, say spreads... or iron condors. And using these strategies as the makeup of a portfolio.

    Do you have any kind of idea on what kind of BP will be provided for X down? Firms?


  5. Simplex?
  6. There are many firms around who specialize in that end of the business. The only one that comes to mind off the top of my head is a place like V-trader. Many places will give you “portfolio margining” on many options products. Reg X was enacted several years ago but it had a very high minimum balance requirement. Since then they’ve lowered that balance requirement significantly to allow retail clients portfolio margining on many types of options. I believe that’s what you’re looking for.
  7. xflat,

    Yes, porfolio margining is wonderful and great for this type of investing. I am wondering if firms provide a capital multiplication/Buying power upon the upfront capital requirement.

    So, for example- putting up 25k for portfolio margining buying power of 100k, with a profit split as incentive for the BP.

    Aware of firms?

  8. I have heard of them from time to time. What kind of options background do you bring to the table?
  9. Mvic


    AFAIK no one provides PM on accounts under $100K.
  10. I am currently 27 and work for hedge funds doing pnl work- I do not have a PM account, however, I have studied options for 10 years and have invested/traded them for 5.

    For my current personal situation, what makes sense, is to put up capital in return for a share of profits. I feel that this would be highly lucrative as a form of diversification, beneficial to both parties. Right now I am doing pretty well, however, volatility is pretty high and premiums are hefty. Nonetheless, I feel the above will apply and be lucrative as a form of diversification for traders and / or firms.


    #10     Apr 2, 2008