Options Prop

Discussion in 'Prop Firms' started by rmtrader, Sep 22, 2010.

  1. rmtrader


    Hi guys,

    Could you please name some prop firms for options trader? I know this topic has been brought up before, but most other posts mention names like Group1, Citadel, Wolverine, Chicago Trading, Ronin, etc. These are prop firms that hire you and pay a salary. I'm looking for firms (around NYC) that require a capital contribution... more like a Bright Trading or Echo, but one that allows you to trade options (sell premium) and hold overnight positions.

    So far, the only firm I know that fits the bill is Vtrader. Are there any other firms like this out there? Please help! May the options gods reward you with great wealth and good karma for helping out a young gun like me.

  2. I can pretty much bet that Bright and Echo won't let you sell premium. You may have to look for smaller, less regulated shops.

  3. I think Maverick covered the topic. No firm is going to offer you leverage to write naked so you can bust-out and leave them with a debit. You can find a shop that will offer you a haircut on defined-risk positions and the occasional naked short position provided it has got a tacit hedge (overwrite, short backspread, SO spread, etc.) Most firms will not sign off on an unhedged write under scenario, it's simply not in their best-interest.

    Give Cornerstone a call. FF + 4% to finance your haircut. They will require at least $50k. I can say with some confidence that any firm will show you the door if you tell them you want to "short premium".

  4. rmtrader


    Thanks for the feedback. Just to be clear here... by "short premium", I don't necessarily mean naked short. I'm simply referring to positive theta trades in general. My trades are actually always either fully hedged (defined risk) or partial hedged (ratio) anyway.

    What I'm looking for is JBO risk-based haircut that allows cross margin between different products. I wonder if the typical equity prop shop would even offer this, since they deal mostly with fixed leverage (20-to-1 type). Isn't risk-based haircut only available through options market making firms?

    I'll look into cornerstone. If anyone else know of other firms that would take options traders, please post some info here. Thanks!