Don;Thanks.Reading ArchAngel education example[page 8]-''unhedged,6 times equity,overnite.''...................[1]Ilike swing trades,some day trading ,however from a home traders view isn't that trade [or trades ] likely to blow himself up,considering the law of averages?[2]How much could that trader lose not counting collection costs,lawyer fees?[3]Even with 90-95%leverage,land,[5-10% down] wrote in contract, losses limited to payments,taxes.Ouch, that pain was bad enough!!![owner financing]
Bright questions
- Thread starter JulieFL99
- Start date
Our traders are all versed in risk, and we monitor risk minute-by-minute from our offices. If you had a good strategy that is "capital intensive" then you would want to be able to put it to use, right? We feel pretty comfortable with our traders abilities, and our ability to monitor risk. You are correct in stating that those trading from home without risk management should not participate.
Don;May I add ,I delegate [ most of ] my CPA work?That is why I asked you how much that ''unhedged,overnite,6 TIMES equity'' trade could lose ,not counting collection costs???????????????????????????????????????????[2]Isnt my CPA correct in telling me debt forgiveness is counted as [like trader]income?????????????????????????????????????????[3]Right on putting capital to good use;isnt the key word good??????????????????????????
Of course, and that is why we have specific limits on capital usage "without" prior permission, etc. There is no "debt forgiveness in the sense you mention, since all traders are using our capital to begin with (in excess of their initial amount and profits, of course). No "collection costs" - and just because capital usage is beyond capital does not mean that the money is at risk.
For example: I use about $3 Million when placing my "opening only orders" every day (as many traders do). I only get filled on about $300K - $500K, and do pretty well...this is good capital usage. The "overnight" limit of (actually 5 times equity, without asking us), is well within standard risk calculations. Remember, we have been doing this a long time, and we like to keep our money as well as have the traders keep theirs.
For example: I use about $3 Million when placing my "opening only orders" every day (as many traders do). I only get filled on about $300K - $500K, and do pretty well...this is good capital usage. The "overnight" limit of (actually 5 times equity, without asking us), is well within standard risk calculations. Remember, we have been doing this a long time, and we like to keep our money as well as have the traders keep theirs.
Just a note. On the LWS site under margin requirements, I made
up some approx. guidelines for L.L.C professional margin , see
www.stocktrade.net/services/portf_hedging/hedg_requir.htm .
These guidelines are based on the SEC/SRO requirements .
If traders use options as a Hedge, see Hedge positions at
www.stocktrade.net/services/portf_hedging/hedg_exmpl.htm .
Every firm will have some different guidelines,but these are good
examples. I would suggest all L.L.C. pro traders check with their
desk before putting on large matched pair , risk arb or
unhedged naked Long or Short positions(out of the ordinary).
I know Don & Bob are pro's and individual L.L.C's leverage and parameters will vary from firm to firm. Don, Bob and myself come
from option trading backgrounds and I think this helps us monitor risk. Hope this will end some of the confusion on L.L.C.
margin requirements.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
up some approx. guidelines for L.L.C professional margin , see
www.stocktrade.net/services/portf_hedging/hedg_requir.htm .
These guidelines are based on the SEC/SRO requirements .
If traders use options as a Hedge, see Hedge positions at
www.stocktrade.net/services/portf_hedging/hedg_exmpl.htm .
Every firm will have some different guidelines,but these are good
examples. I would suggest all L.L.C. pro traders check with their
desk before putting on large matched pair , risk arb or
unhedged naked Long or Short positions(out of the ordinary).
I know Don & Bob are pro's and individual L.L.C's leverage and parameters will vary from firm to firm. Don, Bob and myself come
from option trading backgrounds and I think this helps us monitor risk. Hope this will end some of the confusion on L.L.C.
margin requirements.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Hi Gene....those are easy to read guidelines for traders to follow, good job. As you know, this is a very subjective issue, and we need to post more restrictive limits than what we would like to protect ourselves against the "rogue trader" types.
Part of this is personal choice------risk.Never have forgot the power of a good name.or ,,nickname or ad.For example that guy sells bagels named ----Murray Lender.not Murray borrower.[did mention 90-95%leverage,land]
murray, don´t take this the wrong way but I noticed that when you use the board you have one reply which is quoting a person and then a second reply which is what you want to add. Could you please edit (erase) the post if you don´t add anything?
Again, just writing this as a gentle reminder/help.
Again, just writing this as a gentle reminder/help.
don have you or anyone else
noticed that the regionals are often showing better quotes or that the nyse is not as liquid lately. even in ge on fri i counted 4 better quotes than where the nyse was at the bid/ i often see the nyse jump to the back of the pack. I am having a hard time paying 3 times the spread than i am used to.
Any explanation.
noticed that the regionals are often showing better quotes or that the nyse is not as liquid lately. even in ge on fri i counted 4 better quotes than where the nyse was at the bid/ i often see the nyse jump to the back of the pack. I am having a hard time paying 3 times the spread than i am used to.
Any explanation.