What is a trader's "Book Size" or "Size of Book"?

Discussion in 'Professional Trading' started by User50000, Dec 13, 2006.

  1. I have heard some traders talk about the size of the book that they are trading/managing (or what their "book size" is). How does a trader calculate the size of the book they are trading? I thought it was the notional value of the position(s) that a trader has on at any given time. So, for example, if you are currently long 100 emini S&P contracts then the size of your current book would be roughly : 100 x $70,000 = $7,000,000.

    Is this correct? Can anyone shed some light on this?

    Also, what is considered a small book and what is considered to be big book size?

  2. Book is NEVER notional. Rather book is the amount of FUNDS that a broker has at his disposal.

  3. So, for a trader that would be the amount of funds (capital) that the trader posted for margin with their broker? So for 100 eminis (assuming $1000 margin per contract), the book size would be roughly 100 * 1000 = $100,000. Is this right?
  4. landboy


    Umm, I think the book size has more to do with Dollars at your disposal. At a dealer, the MD will allocate a book size based on your experience and what risk they want to take. If they give you 100K, some of that may be borrowed money, but obviously this money is backed by the bank/dealer. What you do with this money is up to you, but just coz the margin is 1000 bucks a contract doesn't mean the bank will allow you to by a net value of $100,000,000 worth... Nope, doesn't matter what you CAN buy with it, the book value still stays at 100K
  5. Okay, so "book size" refers to your trading capital or the funds you have available for trading (or as Pa(b)st Prime said earlier, funds at the trader's disposal).

    Any idea what is a large book and what is a small book for, say, a trader working for a bank?
  6. Mine is 6 but it's thick.
  7. landboy


    Start off in teh hundreds of thousands, and work your way up, topping out at about 20 million...