I keep reading comments about small account size and large account size. Can anyone here define what constitutes a small account and what constitutes a large account?
CME - Why Smart Money Trades Spreads
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I keep reading comments about small account size and large account size. Can anyone here define what constitutes a small account and what constitutes a large account?
That’s not a well informed post tbh.
I’ve had clients fund Advantage accounts with $25K - Sometimes less.
I’ve had clients fund Advantage accounts with $25K - Sometimes less.
account size can be much lower with spreads depending on the market you trade. @bone what are span margins on Eurodollars these days? 150-500$ on inters?
You don't need much of an account to swingtrade STIR spreads...with energy, things are different, tho.
Most GE Butterflies and Condors are between $175-$375 ish depending on leg duration and overall convexity
Most inter market energy spreads (CL, NG, HO, RBOB) are several hundred dollars to maybe a couple thousand tops in margin
Your point is spot on - you can swing trade and carry all sorts of spreads for days, weeks, even months with a really modest account. I’ve got clients that carry several different spread positions simultaneously with accounts < $30K no problems
Most inter market energy spreads (CL, NG, HO, RBOB) are several hundred dollars to maybe a couple thousand tops in margin
Your point is spot on - you can swing trade and carry all sorts of spreads for days, weeks, even months with a really modest account. I’ve got clients that carry several different spread positions simultaneously with accounts < $30K no problems
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Edgeclear (FT71's shop) is an IB for Ironbeam.. fyi
If you are going to seriously trade spreads, you will be served best by a large established Chicago FCM that already clears proprietary firms, commercials, and big specs whose majority strategy is some type or flavor of spread trading. It's well worth the few cents more in commissions. I would happily exchange getting correctly margined within seconds on a Eurodollar Butterfly with paying a few more cents per side in commissions. Gladly.
The only exception would be an Investment Bank Prime Brokerage - so if you have a good sized hedge fund that is a very appealing option because of the myriad advantages associated with an omnibus account.
You need a firm that pays the $$$ to retain really top tier Risk and IT personnel. There is not an automated strategy or a spread or arbitrage that you can dream up that RJ OBrien hasn't already seen and supported. You could not say the same about any discount broker that I've personally seen or been made aware of.
The only exception would be an Investment Bank Prime Brokerage - so if you have a good sized hedge fund that is a very appealing option because of the myriad advantages associated with an omnibus account.
You need a firm that pays the $$$ to retain really top tier Risk and IT personnel. There is not an automated strategy or a spread or arbitrage that you can dream up that RJ OBrien hasn't already seen and supported. You could not say the same about any discount broker that I've personally seen or been made aware of.
Bone: Might be good to post the margin for say a Eurodollar butterfly so others can compare and see what they get.. but Eurodollar butterflys might not be good example since they are implied.. might be good to see on some synthetic spread like a Crude Doublefly or Condor and see what people are missing from going to a proper FCM
I get PM'ed all the time by ET traders who will put on a spread (even exchange supported!!) and their discount broker margins each leg as outright flat price risk. Which is insane.