I have heard that rumor many times in the past few years until something changes it's not worth losing any sleep over speculation
Dont worry about that Mav. Don only speaks loosely on the board; when you eventually PM and get on phone he offers 5:1 intraday leverage . I even thought it was a joke. -gariki
Ok, I have to dispute that. We have traders who use 30 times or more capital during the day. We have traders who use 50 times overnight (too much, and this is limited to experienced traders). We try to keep intraday "naked" (see MAV'S posts about directional trading in the futures firms thread)....to about 10 to one or so. We do our best to keep new traders from themselves. This is a serious business, and everyone, feel free to call to discuss. Please mention this ET discussion. Always glad to help. 702.739.1393. Mid trading day, slow time is good. 9A-Noon Pacific time. Please call again, reference this, glad to chat. All the best, Don edit: I get 10-20 phone calls per day, from new traders to Reuter's (nice guys, looking for quotes).... so please, when you call, if I can't chat right that second, allow me to call you back. Don
And to MaV. Regarding the directional trading, or even the hedged pairs trading. Sure, "stuff" can happen, and we assume that risk. Not blindly, but with our best controls. We have lost money on our traders behalf, but nothing major. Our only major loss was a personal guarantee from my brother to a friend. But even that was not significant in the whole. I read all your posts regarding the Chicago Futures firms not wanting directional traders. We accept them, but yes, we look for certain limits. As you know very well, the hardest job is protecting traders from themselves, and I don't mean in the regulatory sense, LOL. All the best everyone...enjoy the Super Bowl, my 1 of maybe 3 or 4 games I watch. I took the Giants and the points (bash away, LOL). Don
Don, you lost a million dollars over night on one guy. That's pretty serious in that he "went into you" for a million. Just another reason not to be in this business as a prop firm owner.
Don, you really need to help these guys out by being a little more specific. You are a pair trading firm. When you speak of leverage you need to tell these guys that you are talking about being long HD and short LOW. And with that notional amount, you are giving "some" guys 30 to 1. You also need to tell them that just to make the same amount of money by directionally being long HD, they need to trade 10 times bigger to get the same profit. And you also need to tell them they will pay 10 times the amount in commissions. And you also need to tell them that if they are scratch traders, their commissions will eat their account alive in months if not weeks. I'm sure you explain this in your boot camp, but you should probably also explain this on ET. A lot of guys Don have no idea how hard this business is and how much the math is stacked against them. Many guys end up calling me after they talk to you just to have me explain to them what they are getting into. A lot of guys on this board think they are going to give you 20k and leverage directional trades in AAPL 30 to 1 intra-day. No Don, they actually think this. They tell me this. I think it would be beneficial if you spent a little more time on these boards going over this. It might save you some of those 10 to 20 calls a day. Because you know Don, if "I" have to explain it....I will. And I have a tendency to be very honest and straight forward.
Don't know much about the equities world. But in futures world - If a very successful trader makes 10 million a year, assuming 50 weeks, he makes 200k per week on average. Losing 1 million in 1 day is equivalent to losing 5 weeks of profits. Can happen. Even if a decently successful trader makes 2 million a year, assuming 50 weeks, he makes 40k per week on average. Losing 1 million in 1 day is equivalent to losing 25 weeks of profits. Can happen but will be a blackswan event - days like 50 bps surprise swap cut, 9/11 etc. And these decently and very successful traders will have the buying power to cause such losses. Yes, if a guy makes 500k a year and losing 1 million in a day - thats bad
Sorry for dropping in the discussion here but it is very useful information for most folks here. Thanks Mav.
My understanding of the event is that this loss was multiples of what he made in a good year....multiples. Gmst, Don doesn't have 7 figure earners. Not a knock on his firm. I can't think of any 7 figure earners in the equity space right now. Not a one. The futures world is much different. Much.
a few guys at G2 trading are claiming 7 figures over there running equities, no proof just talk etc etc