I know it has been written about regarding clearing firms and hedge funds taking the other side of a trade am curious what the opinion is from people who trade equities or futures as individual prop traders or even retail do they sometimes think there are efforts to push them out of a position for a loss based on net liq. in their acct or their firms max alloted to fund them ?
lets put it another way ... if my clearing firm's prop desk is trading against my position ... is this cause for alarm? it seems to happen alot in FX spot trading so why not futures or stocks ?
Hehe, Can't speak for futures but let me tell you a story. At a certain Assent (then Andover) LLC that I started at, the group leaders used to call out stocks with market shorts especialy late to close out their positions and often reverse for a nice bounce. This was at the end of the bullet era. That practice got embraced by some of the traders who later on used to call out long side trades so that they could close out their position. I later found out that Assent had a pretty big pattern of this, some groups used to run on this basis, allowing some guys to take huge positions and even take out market shorts completely knowing that too many scalpers at the same firm got short.
Hydro, so you mean prop firms pass on inside information to their best traders so that they can trade against other traders in the firm who are not so good? There are so many games going on out there and I just wish more of it would come to light. And I am pretty sure if a hedge fund is taking the opposite side of your trade, they won't let you make at least 10 cents. It'll go 6 cents and reverse...
FWIW, we go out of our way to not ever "take someone out" of a trade, we hated it when we used to get asked by our clearing firm to "cut down" on options positions, even though we had plenty of capital. My brother told them to "put the request in writing" - they never did, so we rarely complied. Not a good business practice to micro manage traders too much...risk control is one thing, micro managing is quite different. With the number of traders we have, it wouldn't be possible to know what was going on anyway...so we just watch the few who are too risky at any given moment in time. Don
If you route your option order through Citadel, I'm pretty sure they(Ken Griffin & co). take the other side of your trade. I think they may even give our firm owner some kind of a credit for each order routed. Too bad its unreliable and hardly any of us route through them.
r u referring to a firm that starts with an M and the head traders name starts with a K? if not sorry must be thinking of someone else