Do any brokers provide this risk control?

Discussion in 'Trading' started by erniej, Nov 1, 2007.

  1. erniej

    erniej

    I trade sp index futures only and have a small fund with separate managed accounts. A big potential client has asked if i can find a broker who will do the following:

    1) we agree on a max leverage amount, lets say 8x
    2) any time his account is leveraged more than 8x, the broker will automatically exit enough of the current position to bring leverage back to 8x. this occurs in real-time and i can't have any control over it

    does anyone know of such a thing? are brokers who would offer this? if not, are there any 3rd party risk consultants who could do this? the key is to have such an automatic risk limiter that is out of my control.

    i run my strategy 4x average leverage with 8x max. i think the client is worried i could go cowboy and a sudden market move would cause him to lose more than his initial investment.
     
  2. You're a fund manager and you dont know these things? Come on lets keep it real
     
  3. erniej

    erniej

    do you know the answer? if so, please share. i am seeking help, not comments on my intelligence or experience.
     
  4. Just about every clearing firm will do that for you.
     
  5. erniej

    erniej

    Interactive Brokers doesn't
     
  6. erniej

    erniej

    if your clearing firm does that, please tell me who it is?
     
  7. Discontinuity. How can you avoid gaps? There is no system that will guarantee a fixed-loss, unless stated loss-limit is cash-secured.
     
  8. erniej

    erniej

    the client realizes the discontinuity. he just doesn't want me 18x leverage into a weekend. please no more comments about the validity of such a risk control, i'm just looking for some HELPFUL answer. does any broker or other party offer what I described?
     
  9. You're an ass. My comments were in reference to the above. You cannot guarantee return of principal at 8x, period.
     
  10. erniej

    erniej

    atticus, personal beliefs about leverage (or me) aside, do you know of anyone who offers this service?
     
    #10     Nov 2, 2007