I wanted more leverage and my new broker suggests auto liquidation for increased leverage. What is pros and cons in using auto liquidation? I heard a bad tick issue can liquidate my positions inadvertently. I am using Rithmic by the way.
Are You willing to give up control of your account to have the ability to have extreme leverage and/or not pay attention to your losses? I don’t want either.
If my open positions lose 50% of equity, Rithmic will liquidate them. My problem is AMP Futures doesn't provide margin discount to /NG day trading anymore. They say that's because /NG has high volatility. They used to provde 4:1 leverage like /CL. Advantage Futures would provide 3:1 leverage if I agree auto liquidation. That sounds reasonable to me.
Yes, in most cases auto liquidation won't harm I guess. However, when I trade spread (especially illiquid far away month contracts), a bad tick can inadvertently liquidate my postions. It happened 3 times with AMP Futures. I think Advantage would be different as they know how to handle spread trading.....