Meeting with prop firms next week

hi,

i have several meetings with prop firms next week and would like some advice on how to negotiate terms and condition and the general agreements these days with prop firms.

to me :

i have about 40 k to trade which i am happy to put up for prop firm leverage.

style: position trade vertical spreads on spx., returns 2 - 4 % per month.

i am happy to assume all risk ( my 40 k as max capital at risk and max drawdown) and would close out the deal if the drawdown is bigger than the money i put up. max capital at risk would never be higher than my 40 k. so the prop frim has virtually no risk. how should the split be for the remaining cash the prop firm comes up with be and how much can i expect ( leverage 5:1, 10 :1 ?).



any other comments and or what i should look out (pitfalls etc ) pls let me know.

thanks jack

 

You gonna buy or sell those verticals?

 

hi dr.

i am selling them most time, near support, resitance, overbought oversold, high IV, etc. i use several risk tools, apart from the usual hedging underlying, rolling, etc. sometimes long oex calls, puts. sometimes spy and es. sometimes a mix of all.

anyway hope this answers the question.

best regards,
jack

 

wear your boots.

 

I like your plan. I am getting ready to put myself in similar position, but in a different way. Choose a leverage ratio that gives you the best chance of success, not necessarily the maximum the prop firm will allow. The only drawdown that really matters is the initial drawdown. I plan on limiting my initial leverage ratio to 5:1 until I can double my capital. If I can not make $ @ 5:1 , I'm not going to make it at 10:1 or > either.

Good luck with the plan.

 

If you find a prop firm that lets you put out short prem and the haricut to do it with....you let me know, yes?

 

I will Dr.

Will keep you posted on developments.

j

 

if you talk to echo in nyc, make sure you get the deal in writing...