What if you have 20 contracts on $25K and it drops 30-45 points? Or 10 contracts and it drops 45-60 points? etc etc. There's no point in arguing hypotheticals here, because all I am getting at is how to mitigate the risk on an overnight hold. I do agree that the author doesn't seem to understand that with 40 contracts, he's already trading on $198K margin, and putting up only $25K of his own money, with the broker putting up the rest. The amount of wiggle room on such a small deposit for that lot size is inadequate for this to be a good idea by any stretch of the imagination.
It's come to my attention that most of you are just inexperienced, not completely retarded, so instead of berating you I will just try to educate you a little bit. But you do have to realize, that when you try press your rights on questions which you are not well versed, you are simply being ignorant. So here goes. If I carry positions between 4-5pm, they are always short. Never over the weekends. 12.5 points wipes out 25K. When have you seen the market gap up 12.5 points between 4-5? So.. when you sit down with a firm you show them a track record of your p&l/volume and you discuss your strategy. They make an assessment of your risk and come up with a capital contribution and profit split that makes sense. Most of what I've seen ranges between 50/50 and 80/20. So.. as a trader when you are giving up p&l, what exactly do you think you're getting in return? That's right, capital. And guess what? These firms have enormous credit lines with many public (and occasionally private lenders). My previous firm (100+ traders) had a capital base of well over $50MM. For this reason when you negotiate terms, the conversation of margin rarely even comes up unless you have a particularly capital intensive strategy. In those cases, the firms will typically ask you to pay a portion of the interest on your margin. The well capitalized firms don't bat an eyelash about margin. What you do discuss is size (and maybe buying power in the equities world, not sure). I regret bringing up margin myself, should have just said the size I needed in the mini's. I have personally been given 20 lots in the spooz off the bat with a firm where I contributed $0. After which I grew the account and was bumped higher. This is the exception NOT the rule. But guess what, that's why I posed the question, I'm trying to find more exceptions. Furthermore, if you're asking "shit that sounds great I want a deal like that." Well you'll need to show them that you have made a worthwhile amount of money recently and/or you trade meaningful volume (I did just under 1MM cars in 2016). I did both. So for anyone who's never dealt with these firms, please just don't jump in here and start squeaking about how you think it's crazy. Or try and reverse engineer my strategy based on zero information and come up with hypothetical black swan events that would wipe out capital. You sound dumb, and you're off topic which potentially deters insightful answers from people who are familiar with the question at hand. I'll add one more point. To the many of you guys that ask yourselves, "can trading even be profitable? Where are all the successful guys? Where are all the secrets? It's probably all bullshit and a waste of time. All the big players and HFT's and everyone else knows something we don't and it's a losing proposition for virtually everyone." I know because I've been there. Let me tell you there exists a world (several worlds actually) that you are not privy to. There exist strategies and products and tools outside of what you know or have ever heard of. To those people I recommend that you turn off the ignorance, listen more than you speak, and try and learn from people on the inside (like me). Any comments outside of what I asked in the original post will be ignored going forward. Like I said, I already know most of the firms and have done the leg work myself. Just looking to make sure I didn't leave any stone unturned. If I don't get anything productive, so be it. This forum has been dying for many years and stays afloat on the backs of losing traders, salesman, and college kids calling the tops in the stock market.
Well, I can honestly say I'm none of the above. I am sure everything you posted in the previous post regarding what most don't know is 100% spot on. You sound like like a smart cat. I could say... "if you're so smart why would you even ask if you missed anything at a forum that you allege is 'going downhill'?" Valid question right? Either way... best of luck. Its Sunday.... VZ crankin Pac studying this week's plays.
Good grief, why are you using me as an example for your passive-aggressive tirade? (And the line from me you quoted above was a sideline discussion between me and Scat. It had NOTHING to do with you, so you should not have bothered to stick your nose in it. You missed the context.) I was trying to help you man. https://www.elitetrader.com/et/threads/need-10-1-leverage.313197/page-3#post-4516662 I do not need education from you on how to trade ES futures, which is the question you asked. I know exactly my margin ability, my risk, my margin call points, etc etc etc ad nauseum, because I know my broker. But I would never allow myself to trade to the point where the BROKER is the one making the margin call. That must be up to me, and that is risk management. You are asking about prop firms, and I have no experience with them. I only know trading with MY OWN REAL MONEY, not somebody else's. What I am trying to tell you is forget prop firms. Stop with this "needing $250K margin" nonsense. Do you even know how futures work? Do you have any bloody clue? I already told you...When you have 40 contracts on ES, you are trading with $198K margin already. Someone else is counter-risking your position. What is with you and this "needing $250K margin" stuff? You already have it, based on the nature of futures contracts. I learned all of this in a Holiday Inn Express last night.
Wow, only 9 posts and surely over 9000 enemies on ET!! You need to go down the hall to your mommy's room and say "Mommy, someone said you didn't teach me any manners". Mommy, what are manners?"
40 ES Contracts is 5,000,000 nominal value. 250 k of margin would be 20 to 1 Leverage. Ruin is ready to take aim and fire. Johnny, we hardly knew ye.
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