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Do any brokers provide this risk control?
- Thread starter erniej
- Start date
Quote from erniej:
Interactive Brokers doesn't
IB is not a clearing firm they are retail brokers.
I believe the original posted indicated that he was a money manager not a retial guy. He may be confused as to the difference.
We clear Goldman and FIMAT and both of them will execute whatever risk parameters we agree on, subject to their approval of course.
First off, E-Minis offer 18-19x leverage.Quote from erniej:
I trade sp index futures only and have a small fund with separate managed accounts. A big potential client has asked if i can find a broker who will do the following:
1) we agree on a max leverage amount, lets say 8x
2) any time his account is leveraged more than 8x, the broker will automatically exit enough of the current position to bring leverage back to 8x. this occurs in real-time and i can't have any control over it
does anyone know of such a thing? are brokers who would offer this? if not, are there any 3rd party risk consultants who could do this? the key is to have such an automatic risk limiter that is out of my control.
i run my strategy 4x average leverage with 8x max. i think the client is worried i could go cowboy and a sudden market move would cause him to lose more than his initial investment.
You can invest only half his money in futures, the rest in T-Bill, to reduce leverage.
Perhaps you may set a different manteinance margin?
But you'll have to manually reset the margin, as the index moves.
Quote from xflat2186:
IB is not a clearing firm they are retail brokers.
I believe the original posted indicated that he was a money manager not a retial guy. He may be confused as to the difference.
We clear Goldman and FIMAT and both of them will execute whatever risk parameters we agree on, subject to their approval of course.
TimberHill is a clearing agent. Timberhill (clearing) email contact in addition to Timberhill web redirection results to the interactivebrokers domain. Maybe you are confused as to how IB works.
I know this post has no value to the original OP. Carry on.
Quote from tiddlywinks:
TimberHill is a clearing agent. Timberhill (clearing) email contact in addition to Timberhill web redirection results to the interactivebrokers domain. Maybe you are confused as to how IB works.
I know this post has no value to the original OP. Carry on.
didn't mean to confuse, and THI is the parent company of IB and they may offer clearing services, I will take your word for it.
Quote from erniej:
the client realizes the discontinuity. he just doesn't want me 18x leverage into a weekend. please no more comments about the validity of such a risk control, i'm just looking for some HELPFUL answer. does any broker or other party offer what I described?
For E-mini for example:
Leverage = 50 x price x Number of contracts/current bankroll
For T-Bonds for example:
Leverage = 100,000 x Number of contracts /current bankroll
In general:
Leverage = Value of asset x Number /current bankroll
It is easy to figure out how many contacts to sell to maintain a certain leverage and use the IB API with Excel to adjust positions automatically.
Anyway, your 8x leverage sounds very high. I would not go above 2x given my risk/reward parameters. You are highly exposed.
Ron