Prop trading looks great, then why most retail traders don't simply join in?

Discussion in 'Prop Firms' started by OddTrader, Jul 27, 2006.

  1. Maverick74


    Don, Don, Don. LOL. Offering risk based haircuts and cross margining for options and futures traders is monumental. It's not a question of leverage, but what you can do with it. Come on Don, your brother use to be on the floor. Ask him how he could have survived on the floor without a haircut. And no, haircuts is not leverage on leverage. That is a poor example.
    #91     Jul 31, 2006
  2. When we started we could not even use S&P's vs. OEX options as a hedge to reduce haircut fees, of course things changed long ago. We understand haircuts very well, and when we were on the trading floors, it certainly was responsible for success.

    And, yes I agree with you...for Futures and Options trading firms. We are primarily an equities trading firm, as you know.

    Your comments seem to apply to exchange members with clearing firms more than to "upstairs" traders at times, which makes sense...and would explain some of our different points of view. We had completely different mindsets with our own trading when we cleared as individuals with SLK.

    #92     Jul 31, 2006
  3. Here is my Google search finding:


    off topic question. haircut prop-trading seems to be the way to go, and retail option traders seem to be going the way of the dodo bird, wouldn't u agree? Say I wanted to buy 100k worth of NDX gamma in a retail acc't, I'd need the full 100K, whereas in a prop I could feasibly put up only 1K?


    --- "Options Market Observations and Strategies"

    #93     Jul 31, 2006
  4. #94     Aug 5, 2006