I'm at a crossroad... I'm considering the pros & cons of going with a Prop firm or trading thru the Futures market, as I am a Swing Trader. The problem is that the prop firms I've talked with only offer about 4:1 leverage overnight, although I could easily get 50:1 intraday. If I need to hold my positions for about 3 - 4 days, it seems that the overnight leverage for futures is much better than with a prop firm. Any thoughts or suggesstions.... thanks, Walt
I would trade the futures through Interactive Brokers, as they have pretty low rates for a retail broker and they are financially sound...
Interactive Brokers margins(in general) are high. Much better to trade thru a firm like Mirus, Amp, Dorman, Velocity, they offer lower margins. But as any experienced trader will tell you, overnight margins are almost always higher than during day hours.
The reason why I would probably go with IB over Mirus, Amp or any other broker that offers $500 intraday margin is because I'm a swing trader. Therefore, I must hold my positions overnight. The overnight margin requirements are established by the exchanges. So whether I'm with IB or Mirus, I'll be required to have the same overnight maintenance margin. Furthermore, with IB I can trade options on futures. I'm not sure if that's feasible with Mirus...
I would trade stocks with a prop firm; however, comparing the 4:1 leverage for overnight stocks (i.e. the SPY) with the leverage from the ES with futures, it takes less futures capital to make the equivalent with 4:1 on overnight with stocks. If I can get a prop firm to give 20:1 with overnight, then it would be worth it... Assuming that it's a reputable prop firm