Again, you didnt address my answer. What happens on the flip side when a traders deposit takes hits or does that not happen at Bright.
Retail firms should embrace the change as it would free up more capital so their clients can trade more.
The firms go to great lengths to advise against even trading on margin...it's going to take quite a PR turnaround to convince their regulators that they "changed their minds" LOL.... Don
Trading is just like any other business, if you run out of money, it's pretty hard to run any business...if that's what you're asking. Traders (and other business ventures) can either make it or not, depending on many factors. I personally think that if you're going to trade, you may as well give yourself the best chance of success (capital use, training, and a group of successful traders to work with). Unlimited upside potential, very limited downside, and no "franchise fee" or "backers" to deal with. And, I wish our traders never took hits, but unfortunately that's not the case, LOL. (Just making conversation, as always, to each his own) Don
I have been trading 30Y Bond futures electronically now for six years and have been consistently profitable for a long long time now exceeding your requirements in some years by an excess of 10 times. The number one reason to trade at a prop firm is OPM (other peopleââ¬â¢s money). Yes, you do give up some upside and most prop firms are not very ethical when it comes to taking care of their traders. My first few years in the business I worked for a group that was raping me over the coals where I made them enough money in commissions and from what they kept from me to purchase a $5 mm home with cash! The kind of size a lot of the good traders trade with, it takes a lot more then a few hundred thousand to have sufficient funds (at least to trade fixed income). The stress is another factor, when your 25 years old and you can have a day where you lose 80 - 90K in a day, it's a lot to take home with you. When I am trading my best I am not thinking about anything...just trading. Stresses way on people more then you would think.
Mark my words. Will never ever ever happen. There is a currently a pilot program on the CBOE that is allowing one firm to do this. My guess is there will be select firms out there that could allow this but there will be a very very stringent requirement process. If you let Joe six pack have access to haircuts in a retail environment, you are going to have a financial meltdown. I don't think most people on this board understand exactly what hair cuts are and how dangerous they are. If I really wanted to, I could blow out my firm tomorrow in 30 minutes and risk management would never see it coming. It's just way too risky. And to make this available to the masses would be suicide.
Can anyone say market meltdown..... I don't see any chance that reg t will be changed. In fact, it was mentioned often that perhaps the Fed would adjust this in 1999 as part of dealing with irrational exuberance. I certainly don't want reg t to be some sort of fed tool and that is what would happen at some point. Now, I am still thouroghly confused with the haircut concept but... Maverick I say this respectfully. You have no reason to think your statement about traders is improper. I would echo that to a large extent. That is why I made the comment I did about not trusting xxx% of the people on this site. I don't trust most people with my money at any time.
Well then... it sounds like there are quite a few guys with access to the nuclear football at Vtrader. I don't know if this statement bodes well for any option-specific JBO.