Probably a stupid question......Does Firm capital mean anything other than buying power that must be closed at the end of the trading day? It seems that best case scenario (overnight) is Portfolio Margin. Am I missing the big picture here, or are there actually firms that add real cash to your cash and then have buying power computed off of this new amount? Thank you.
Firm capital is exactly what it sounds like. The company's money. Not yours. The firm puts $$ with a clearing house and in return is given loads of buying power. There are firms that allow you to trade their $$ (the buying power granted by the clearing firm). There are some firms that require a risk deposit for this privilege however others do not. The amount of buying power you get depends on what you agree based on experience, trust and current performance. It can be increased or decreased arbitrarily by the firm to what ever level they are comfortable with. If you do well then they are likely to give you more buying power (firm capital). Personally I don't pay much attention to buying power, I am given what I want. I think my limit is about $2m at the moment. The more important thing for me is my max loss per day. I don't take trades overnight so I can't help you there. From what I understand your given an amount depending on your deposit and account size and you pay an interest rate per day held.