Has anybody done this ? Is this realistic ? can it be done ? How much money do you need ? Where can you find clearinghouses ? What can you "realisticly" expect to make ? What are the costs ? What do you need for autoquoting software ? Can you do it alone or do you need to be with a group of people ? Like you see lots of questions, I have traded in the nineties for an options market making firm in Belgium so I know my greeks and have done some option arbitrage through IB in DIA options trading something like 200 options a day making 500-1000 USD out of that mainly by beying on the bid or the ask and hedging my delta-positions, (this all changed abdruptly when IB started asking cancellation costs because i canceled something like 800 times each day) so I have some experience. I am American but would prefer to stay in Belgium and have normal working hours. If anybody would have some advice or remarks feel free to give them to me. Not sure if I can meet the requirements but sure anxcious to know.
I had allready looked there before I started this thread, so I know theoretically it can be done, but I would like to hear some practical answers from people who know a little bit more.
Call Fortis global clearing, in London or Brussells, about an account and RTS for the software. If you are looking for a market then try the currency and s&p options on Globex. You will have them virtually to yourself and I am looking for someone to tighten the wide markets for my trades! The advantage of doing this remotely is that you can make a tighter market. On the floor you would be frozen out if you didn't quote the same market as the rest of the pit.
sorry to dissapoint you but I'm not going to be trading those products. I live in Belgium and I used to trade DIA-options quite succesfully untill they started asking cancellation costs at IB (hedging my delta). But the result is you have no social life anymore if you do this, so this is why I would like to trade euronext products, if this is possible for a local ...
How about by calling membership and talk to them? They probably could steer to a clearing firm if need be. Years ago I cleared Kas, but I think something happened to them. I know from our threads on this board it takes about 200k to join in the U.S. It maybe similar there.
What I'm most worried about is the fact that, say something like 10 years ago, there used to be lots of locals / local-groups on the floor in Amsterdam. When I now watch the list of members of euronext (dealers) only a handfull seem to be left. In Belgium there is even not one local. This does not look exactly encouraging to me. Is this market making business on screen only reserved for the groups with very high capital or would it still be possible to make a living singlehanded with relatively low capital ... ?
I think, generally, it is for large groups/firms now. Edge is virtually nonexistent. So what edge there is has to be put on for larger size, hence, higher capital requirements. Second, most locals aren't very sophisticated quatitatively or technologicaly. With tight edge, there isn't much room for error. Whereas before, if there was .10 or .15 cents worth edge, your pricing didn't matter as much. That has changed and you need to be able to make markets when everything is close to being efficient. Also, technology is expensive and takes brain power. These things can be overcome with resources that only larger groups and firms can afford. That's my .02 cents anyways.