Does T3 ever provide capital, or just better leverage? I don't use more than 5x anyway.

[Palindrome]

I’d recommend just saving up and investing with a retail broker to get portfolio margin once you pass 100k balance.

I agree 100% if you are trading stock intraday...makes much more sense. Portfolio Margin provides plenty of leverage.

If you trade futures, it's a bit different in my opinion. Trading futures with Portfolio margin is just so much leverage, so trading futures with a prop firm might make more sense.

What happens if a flash crash happens and you get caught on the wrong side, and your stop does not get triggered... are you liable or is the prop firm liable? (assuming you blow past your original deposit)

Anyone know the answer to this?

 

[Risepoint1879]

What are the commissions 2x IB roughly? What if you don't need data, or very very basic data?

Doesn't sound too bad if you are not trading with big leverage.

Yeah, they start .006 per share. But what's the point if I don't use more than 4x margin. I'm not comfortable risking 5% per trade, and losing 40% of my account on a losing streak.

 

[Risepoint1879]

I’d recommend just saving up and investing with a retail broker to get portfolio margin once you pass 100k balance.

Do you have experience on what margin IB gives for Portfolio margin for day trading? Curious.

 

[Sig]

Do you have experience on what margin IB gives for Portfolio margin for day trading? Curious.

All PM depends on the correlation of your positions. IBs is a black box that no-one there understands, and your allowed margin changes rapidly and unexpectedly even if your position stays the same and the market is normal. Which at IB means auto liquidation at market order fills of random parts of your portfolio. Often half of an inversly correlated part, so when they liquidate you, "The Algorithm" now sees more risk and autoliquidates some more. So you don't dare take advantage of the additional margin of PM with them, making it pointless.

 

[digitalnomad]

Sig is right. They are margin nazis, but for me the advantages (costs/execution/API) outweigh the disadvantages. I lean heavily on the conservative size with IB margin, never exceeding 70% allowance. They haven’t auto-fleeced me yet (fingers crossed).

 

[Robert Morse]

I agree 100% if you are trading stock intraday...makes much more sense. Portfolio Margin provides plenty of leverage.

I agree but not everyone qualifies for PM

If you trade futures, it's a bit different in my opinion. Trading futures with Portfolio margin is just so much leverage, so trading futures with a prop firm might make more sense.

Futures are not PM eligible but SPAN margin is also risk based. Because Futures have natural leverage and there is no PDT rules, there is little incentive for a futures day trader to join a futures prop firm (Unless they require the prop firms technology).

What happens if a flash crash happens and you get caught on the wrong side, and your stop does not get triggered... are you liable or is the prop firm liable? (assuming you blow past your original deposit)

You have to read your partnership papers. They will differ from firm to firm.

 

[H2O]

What happens if a flash crash happens and you get caught on the wrong side, and your stop does not get triggered... are you liable or is the prop firm liable? (assuming you blow past your original deposit)

You have to read your partnership papers. They will differ from firm to firm.

From their website (http://t3trading.com/risk-disclosure/)

Proprietary trading may involve the use of leverage, which involves borrowing funds and/or securities in order to take positions in securities where the aggregate value of those positions exceeds the capital of the proprietary account associated with such trader. It is important that Traders fully understand the risks involved in trading securities using leverage, which includes the possibility of losing more capital than deposited in the account. Pursuant to T3 Trading Group, LLC’s (“T3”) Operating Agreement, a Trader may be held personally liable for trading losses that exceed the amount of the proprietary account associated with such trader.

 

[Palindrome]

From their website (http://t3trading.com/risk-disclosure/)

Proprietary trading may involve the use of leverage, which involves borrowing funds and/or securities in order to take positions in securities where the aggregate value of those positions exceeds the capital of the proprietary account associated with such trader. It is important that Traders fully understand the risks involved in trading securities using leverage, which includes the possibility of losing more capital than deposited in the account. Pursuant to T3 Trading Group, LLC’s (“T3”) Operating Agreement, a Trader may be held personally liable for trading losses that exceed the amount of the proprietary account associated with such trader.

Interesting... So then there is little reason to join a place like this especially if you trade futures AND are already well capitalized.

 

[d08]

All PM depends on the correlation of your positions. IBs is a black box that no-one there understands, and your allowed margin changes rapidly and unexpectedly even if your position stays the same and the market is normal. Which at IB means auto liquidation at market order fills of random parts of your portfolio. Often half of an inversly correlated part, so when they liquidate you, "The Algorithm" now sees more risk and autoliquidates some more. So you don't dare take advantage of the additional margin of PM with them, making it pointless.

Not sure this is correct. I've had inversely correlated positions and there is zero benefit. Correlation seems entirely irrelevant and each position is judged on its own. The only fluctuation I see is in their market risk profile, there seems to be a component of market + individual risk. A combination of which is what you see.

 

[Sig]

Not sure this is correct. I've had inversely correlated positions and there is zero benefit. Correlation seems entirely irrelevant and each position is judged on its own. The only fluctuation I see is in their market risk profile, there seems to be a component of market + individual risk. A combination of which is what you see.

Try a position of long SPY and short IVV and see what it gives you (maybe in sim since it's a pointless position). The whole point of portfolio margin is to give you higher margin based on the makeup of your portfolio. If they don't do that it's even more pointless!