Prop firms for position options traders?

Discussion in 'Prop Firms' started by Hello_Dollars, Aug 17, 2003.

  1. I've been trading limited risk volatility-based options strategies with a positive theta bias for several years now. Given the positive theta profile, I typically hold my positions for 2-4 weeks. While I have sufficient capital to achieve my targeted returns on my own, a little more wouldn't hurt.

    I admitedly know little of the prop trading world other than what I've picked up on this board over the past few weeks. However, I was wondering if there are any prop firms that offer attractive leverage for options trades and, if so, whether traders are allowed to hold positions for a period of weeks if need be without reducing such leverage?


  2. Pabst


    Dream on. Prop shops want guys who will chop themselves to death all day at a penny a share. HOWEVER if you truly have a solid track record, I'm sure many hedge funds could use you to provide balance and yeild enhancement.
  3. Thanks Pabst.

    That's pretty much the impression I got from the boards. Still, despite my obvious niaivete regarding how the prop world works, I thought I'd pose the question anyway given the various outlandish claims about the endless benefits of prop shops from the myriad recruiters that seem to live here.

    But with regard to the hedge fund idea, I've been advised to explore that route by a few others on a "sub-fund" basis. I just need to think through whether my proven inability to work well for others and my neurotic need to be in total control of my trading would be a hindrance to such a relationship.

    Thanks again for setting me straight.


  4. Pabst


    I hear you. But can you imagine your frustration at having some clueless, prop shop risk manager harping on you to cut your "exposure" on a riskless butterfly!
  5. Oy!! That would make my unfortunate experience at, in turn, SSB, Goldman, and Lehman, where I was charged exorbitant commissions for poor execution, a complete ignorance of options, and irrational margin treatment of iron condors, etc., pale by comparison. Thanks again for warning me before I took a step in that direction.


  6. HD -

    I am an options trader myself and I trade and work at a firm, (Redwood Trading LLC, we service proprietary traders) that is very experienced in options trading. We just signed a PCX floor trader and our head trader was a former market maker and PCX floor trader himself....I am surrounded by some of the brightest options traders putting on some very elaborate options strategies I've ever been introduced too...yes we have more equity traders than "pure" options traders but we are willing to talk to anyone if it makes good business sense.

    See my pm to you...

    rttrader -
  7. Trajan


    Echo seems to recruit options traders, I think they require 50k. With enough capital you could go directly to clearing firms, SLK, FOC, Sage. etc...
  8. Trajan


    BTW, what you are looking for is called a Risk Based Haircut.
  9. Trajan,

    Thanks for the info. I actually have significantly in excess of the amount of capital you mentioned that I use for risk capital. So the direct clearing firm relationship you suggested might make sense. When you get a moment, could you tell me how that works or where I might go to get some further information?

    Thanks again.


  10. this is what i would rec to you---- extremely knowledgeable and flexible. give charles cottle a call.


    #10     Aug 18, 2003