Bye-bye reg T

Quote from Maverick74:

This is certainly not true for Bright Trading or Echo. Also not true for VTrader.
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Oh Mav, you seem like a nice guy who gives people here useful information but you may be in over your head on this one. You should be more careful when you use the word certainly. I did not state opinion I stated fact. I offered to bring Don several accounts totaling well over 7 figures and he said he did not want to lend money to option traders because he made more money lending it to stock traders. Jeff and Rob have made recent changes to option accounts. Ron (Generic) does not want them either. I don't blame them for this, as an option position trader you may generate very little in commissions and interest for the firm so why would they want to lend you substantial risk capital.

So let's start with your firm VTrader. If, for example, I bring you 2M in accounts then you would need to lend us an additional 2M every night to cover the JBO haircut. We do not want to pay any interest, debit, capital or otherwise for this borrowed 2M since we would effectively get 2 to 1 leverage by using PM rather than the more stringent JBO haircut (with indicies) and we don't have to pay anything for it. I know you will want to argue this 2 to 1, but it is simply a mathematical fact for what we trade. We only want to pay .75/contract all in including all exchange, brokerage, regulatory fees, etc. since we get that with PM too. Additionally we get SIPC and additional private insurance to protect our accounts with PM so we would need something similar from you as well. We need software that has full option analytics and the ability to send multi leg complex orders electronically, and we don't want to pay for the software, quotes, or any registration fees since we don't have to with PM. So what does VTrader have to say?

I have no problem with pro/prop firms and they are a great idea for certain traders, but with a retail firm offering PM there is little reason for an option trader to go with you.
 
Quote from opt789:

I offered to bring Don several accounts totaling well over 7 figures and he said he did not want to lend money to option traders because he made more money lending it to stock traders.

Well, let's see here. The reason Don does not want to borrow you money for options is because of the commisions, he doesn't make any money on it, NOT because of the risk over the haircut. Don certainly does give traders more then JBO haircut with pairs trading and opening orders. Probably by a magnitude of 10 times over haircut. So you are not correct there. The reason he is not willing accept your business is because of the commisions, not the risk, even if he tells you otherwise. This should be obvious to you.

Jeff and Rob have made recent changes to option accounts. Ron (Generic) does not want them either. I don't blame them for this, as an option position trader you may generate very little in commissions and interest for the firm so why would they want to lend you substantial risk capital.

I believe Dave (rearden metal) gets substantial leverage over haircut. He is probably one of their biggest traders there. My guess is that Jeff and Rob allow that on a case by case basis and you guys did not pass the muster test. That is their call, but I believe, unless RM says otherwise, that they do offer more then JBO haircut leverage.

So let's start with your firm VTrader. If, for example, I bring you 2M in accounts then you would need to lend us an additional 2M every night to cover the JBO haircut. We do not want to pay any interest, debit, capital or otherwise for this borrowed 2M since we would effectively get 2 to 1 leverage by using PM rather than the more stringent JBO haircut (with indices) and we don't have to pay anything for it. I know you will want to argue this 2 to 1, but it is simply a mathematical fact for what we trade. We only want to pay .75/contract all in including all exchange, brokerage, regulatory fees, etc. since we get that with PM too. Additionally we get SIPC and additional private insurance to protect our accounts with PM so we would need something similar from you as well. We need software that has full option analytics and the ability to send multi leg complex orders electronically, and we don't want to pay for the software, quotes, or any registration fees since we don't have to with PM. So what does VTrader have to say?


I think we could probably swing that. Send me a PM and we'll talk. I'm not going to negotiate on a message board. We give our remote market makers 3 to 1 leverage over haircut. Our long short rates are far better then most retail BD's offering CPM with the exception of IB. But even IB we beat their long/short rates by 150 basis pts. We can handle everything you asked for. I do have a question though, please tell me you guys are not just selling naked options? We can talk about it if you are. But one of the things that will get firms to lose interest in your business is if you guys are simply selling naked juice with the combination of no track record or history to prove you can even trade or manage risk.

Aside from that, we can definitely talk. Shoot me a PM.
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Mav, this whole subject started with reference to options haircut so your mention of pairs etc, is pointless. A little advice son, you shouldn't talk down to someone if you want their business: "you guys did not pass the muster test", "you are not correct there", etc. Since you replied to one of my earlier posts that you could calculate your OCC TIMS haircut in seconds you have clearly shown you know very little about that subject. I will consider your firm if you can tell me that your risk manager has more experience than me (17 years of trading, broker/series 4, market maker on two exchanges, risk managed hundreds of traders, managed 8 figures of OPM, etc.), and how precisely you can guarantee our funds.
 
Quote from opt789:

Mav, this whole subject started with reference to options haircut so your mention of pairs etc, is pointless. A little advice son, you shouldn't talk down to someone if you want their business: "you guys did not pass the muster test", "you are not correct there", etc. Since you replied to one of my earlier posts that you could calculate your OCC TIMS haircut in seconds you have clearly shown you know very little about that subject. I will consider your firm if you can tell me that your risk manager has more experience than me (17 years of trading, broker/series 4, market maker on two exchanges, risk managed hundreds of traders, managed 8 figures of OPM, etc.), and how precisely you can guarantee our funds.
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I have no idea why other firms rejected your offer, but if they did, it was probably because they didn't want to assume the risk you were going to bring into the firm. It's as simple as that. Firms usually don't turn down business for no reason you know.

And yes, I can calculate haircut on the fly. I use to do it on the floor of the CBOE. Our risk manager does not have 17 years experience, he has 30 years experience. Look, you said no one wanted your business, I said we could probably do it. I keep regular office hours. You can call me anytime you wish. I would have to assume that if this is a serious offer, a phone call would be the next prudent thing.
 
Opt 789, you are a first class tool. I'm sorry, someone had to say it, might as well be me. I have taken a few minutes to peruse some of your previous posts just to see exactly who you are. Let's see, one post had you saying you were very happily trading at Echo for 5 years. Not anymore huh mate? LOL. Then I see you posting about trading Iron Condors. That reeks of amateur hour my friend. Then you talk about how much you like Think Or Swim, so I assume you must have some business there. Of course I hope you are aware that you are paying about 850 basis points on the long/short rates there which is highway robbery, you must know that, being the professional that you are. Why you are paying those rates is beyond me, only you and your shrink can answer that.

Your little SPIC insurance you keep jumping up and down about is a little lacking. You do realize that only covers 100k in cash and 500k in securities? You did know that right? Which means a majority of your 2 million in funds is not insured.

Look, please don't respond to me again in this thread. Let this post be our farewell good byes to each other. I spotted your tells 3 posts into the archives. Your inability to understand haircut is par for the course. Run along now. I'm done here. I was mistaken when I thought your first post was the beginning of a serious conversation. I was wrong on that, I'll take my chips and leave.
 
Quote from Maverick74:

Your little SPIC insurance you keep jumping up and down about is a little lacking. You do realize that only covers 100k in cash and 500k in securities? You did know that right? Which means a majority of your 2 million in funds is not insured.
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Virtually every major retail broker offers insurance beyond SPIC coverage through Lloyds, and it's in the tens of millions or hundreds of millions of dollars for securities and 900k cash.
 
Quote from deviltrader:

Virtually every major retail broker offers insurance beyond SPIC coverage through Lloyds, and it's in the tens of millions or hundreds of millions of dollars for securities and 900k cash.
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Quite correct sir, but Mav also believes that all traders pay the posted rates/comms on a brokers site which everyone not genetically predisposed to idiocy knows not to be the case.
 
Quote from atticus:

Wow... 850 basis? I think he could do better with his local shylock. I think 85bp is more likely, eh?
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Local shylock is right....here are the numbers.

https://www.thinkorswim.com/tos/myAccounts/displayRates.tos

9% debit rate

1.5% credit rate

So I was wrong, actually 750 bp spread. Yeah, I think Vinny, the neighborhood bookie is offering better long/short rates. And no platform charges from Vinny either!
 

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