Profitable Options Strategy With Edge

Discussion in 'Options' started by Puma14, Oct 10, 2003.

  1. Puma14


    I have developed an options strategy I believe will and does work. It is a fairly simple idea but has edge on three levels with reasonable risk parameters. Execution should not be a problem, either getting in or on the way out. The ideal holding period is 2-5 days and there are probably between 3-10 opportunities for trades per week.

    I'm currently with an options marketmaking group that shies away from proprietary off-floor trading. I'd trade it in my own account if the margin requirements for selling options weren't so high. So I'm looking for a prop trading firm with whom I could sit down and discuss this strategy and eventually trade it.

    Either respond to this message and I'll contact you or PM me please. Thanks.....L
  2. will take in prop traders for a deposit north of 25K. For that you would get market maker margins, nice execution platform,etc. YOu'd need a s7 license.
  3. Interesting how flexible the term "prop trading" has become.

    What many people call "prop trading" now used to be called "professional trading", i.e., you put up your capital, got to piggyback on the firm's high leverage, got access to backoffice setups like bullets, and you traded your own account. You paid the firm commissions/transaction fees, perhaps a "systems" access fee, and maybe a piece of any profit. They would take most anyone who could put up the initial nut and then used their internal risk management systems to try to keep any one trader from blowing out horribly and affecting the overall firm.

    Where as "prop trading" meant (usually) private trading firms that hired traders to trade the firm's acccount(s) with the firm's money - traders were paid base salary and (potentially big) bonus based on their performance. These firms hired based on demonstrable performance - the better the track record, the more base and % bonus the trader could get.

    The big difference was "pro" firms made their money from fees collected from traders and traders put up their own dough (but got to use the firm's leverage). (Real) "prop" firms made their money from profitable trades executed by the traders who were on their payroll. "Pro" firms encouraged churning and lots of trades (regardless of whether any trader was making much money), "prop" firms only wanted as high a net profitability as possible out of each trader (not really caring about # of trades).