Options Trading at Prop Firms?

Discussion in 'Prop Firms' started by Snosur4, Apr 30, 2002.

  1. Snosur4

    Snosur4

    Do any Prop Firms offer options trading to thier members and if so, what is the commission schedule?
     
  2. You'd be hard pressed in finding one. There are a couple of reasons why. Most important is that there is no incentive for them to do it.

    Could you imagine pro traders putting on a time spread 20 times and not taking it off for 2-3 weeks. How would the props make $.Another reason is the risk involved in monitoring the positions. High maintenance..so to speak.

    I also think pro firms by exchange rule or something to that effect can't use electronic order entry systems or the floor does not like to fill them for they think the upstairs people 'know' something.

    Good luck in your search
     
  3. liltrdr

    liltrdr

    I believe Echo allows option trades. Also, Emini trading should start in three weeks (cross my fingers) so that I'll finally be able to have a stable, reliable broker.
     
  4. Echotrade. I believe $2/contract. No electronic order entry though, they call your order to the floor.
     
  5. I am curious to know why they won't allow electronic entry. I think only Broker dealers can allow elec access not pro firms. Anyone care to shed a light as to why only non-pros can . Hmm... just 'dumb money ?...
     
  6. Just a note. We will allow option trading at our firm , for traders who understand the risks of options and use options strategies to trade against their stock positions(synthetic call, Conversions etc.). Since we are set up as a LLC, the minimum capital required to use the option montage and auto-ex to the ISE is $75,000.

    See our requirements and margin examples at:
    www.stocktrade.net/services/portf_hedging/hedg_requir.htm
    and www.stocktrade.net/services/portf_hedging/hedg_exmpl.htm .
    We are very knowlegeable on options trading, however we are an LLC and risk management is our number one concern.


    Gene Weissman
    Lieber & Weissman Sec., L.L.C.
    gweissman@stocktrade.net


    See us at www.stocktrade.net
     
  7. We don't find any real edge in trading options off of the trading floor. Since you have the capital given to you to trade the underlying security.

    We allow up to 25% of each trader's equity for options, and of course use options for conversions.

    Don
     
  8. Don Bright,

    I agree with you on that 100%! There is really no edge in option trading off floor unless you are using options as a hedge(Conversion, etc.). Word to the wise, trade stocks and use options as a hedge to get the edge!


    Gene Weissman
    Lieber & Weissman Sec., L.L.C.
    gweissman@stocktrade.net
     
  9. Gene , other than conversions and married puts, could you elaborate a little on your view about trading stocks and use options as a hedge?

    Thanks
     
  10. Snosur4

    Snosur4

    Just a note. We will allow option trading at our firm , for traders who understand the risks of options and use options strategies to trade against their stock positions


    Gene,

    Thanks for the response. According to the info you posted above, you do not allow members to take on naked positions.

    Is this the case? I have been a very successful options trader over the years but many of my strategies involve naked positions.
    If I became a member of a prop firm could I still maintain my current brokerage account or would this cause a compliance problem? What is your firms policy on brokers having outside accounts?
     
    #10     May 1, 2002