I have not considered the spread problem. I am thinking about the use of option strategies. Buying put options on a unilateral basis is a big obstacle~
A better job and and more income to trade spreads. That is as ridiculous as it possibly gets and only is a perfect example why such a high percent in the population is dumb as shit. Anyone with an IQ above 80 should question the relationship. Same with credit scores going down when not using credit lines and preferring cash. Nobody questions this garbage. Here is how a broker can protect itself properly: have a diversified client base. Adjust margin requirements as function of risk frequently. Don't offer ludicrously low margin requirements. Cut client positions immediately when a client cannot meet minimum margin requirements. Restrict certain products temporarily as function of market conditions. Those are sensible ways for brokers and clients to be safeguarded. It is ridiculous to be able to buy heroin and coke around the corner but need to be upper middle class and prove it with a fat bank account just to trade spreads, because spreads can kill much more easily than all the other more easily accessible ways to gamble with one's wellbeing, right? Stupid people always are the ones that end empires.
What is the minimum income, networth and net liquidating equity to be approved for the highest tier? TD Ameritrade seems to require the highest tier to trade any kind of futures options.
Generally, no firm publishes their suitability requirements, because they fear they get gamed. They do have to put them in writing for the FINRA exam and keep them internal.
Surely the average/standard must be known For portfolio margin they normally list it IB "To qualify for a Portfolio Margin account, your Net worth and Liquid Net Worth must each be greater than 100,000 USD" TD "you must meet minimum requirements and have at least $125,000 in total equity.*" Not sure if portfolio margin is needed for tier 3 uncovered options. What is strange is tier 3 uncovered options is required to trade any kind of futures options. Even just buying a put or call. Does all brokers do this? Or do some brokers allow traders to trade future options without tier 3? If anyone knows, please share.
Our requirements for PMA approval are much higher than TD and we require $175K to start and must maintain $150K Portfolio Margin for us requires level 6 options. (NYSE Rule 431(g)(5)(B) and NASD Rule 2520(g)(5)(B) state that eligible participants must be approved to engage in uncovered short option transactions pursuant to NYSE Rule 721 and NASD Rule 2860.) Options on futures have no option level system.
According to the current level requirements, retail brokers set up option trading is wrong, and TD will not clearly indicate the funding standard for the upgrade, they will advise you to do more unilateral, in order to meet their upgrade standards! There is no difference between a unilateral put option and a futures spot risk!
To trade futures with us at all, we have a minimum income, net worth and liquid net worth. Happy to discuss over the phone and I don't feel like asking compliance if I can post these metrics. We offer CQG- Integrated client, QTrader and Desktop. http://www.cqg.com/products $25,000 deposit (If you do not trade Options on CQG-$10,000) Pre-approval of each future and option on future by symbol with max order size and max position size. (We also offer Realtick (RT) where pre-approval is not required, but RT does not offer access to options or the CFE) For options, we ask your strategy-we do not allow aggressive option selling. For futures, we can offer up to 25% of SPAN margin for Day trading. bob
Wow, never seen so stringent requirements and limitations from any other broker. Makes very little sense to approve each and every single symbol and set limits for each symbol. What's the purpose of that when you set initial and variation margin on each product anyway? And why do you need permission from compliance to share Information about products you are selling? It's like a movie theater needing to ask compliance to communicate the minimum age requirement for their movies. I know I come across as overly critical perhaps but are you guys not way too restrictive? I could never imagine to sign up as client with such broker. Unless one trades just 1 or 2 instruments you literally bust prospective clients' balls and make it as inconvenient as could possibly be.