Good Reasons to open 1 additional Futures account

[ChipShotTrader]

i am wanting to open up an additional futures account or sub account. there will be no other owners or parties involved in this scheme. i have no intention to bait the IRS with wash sales.

it appears when i gave the reason that 1 was to go Long and the 2nd was to go Short it violates Rule 534 "Wash Trades"

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash trades or wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

what are other reasons i can give to get that additional account?

is it simple enough to state the reason:
i want one account to trade NQ and the another to trade OIL and accomplish this feat.

such a reason indicates bona fide market position for each.

Maybe plant a tree for your genius (conman, fraudster, sociopath, pathological liar) mentor, with 3 fabricated Phds, a false Knighthood by Queen Elizabeth, etc. I truly can't believe you are still around!!!

He even mentioned that his brother flew him out to India in 1969 to meet the Maharishi, and learn Transcendental Meditation. I have never encountered someone like Morge, and I probably never will. A MASTER CONMAN.

https://www.ruffnerwakelin.com/obituaries/Timothy-A-Morge?obId=17989083

 

[bone]

Except that there is no “intermarket spread” with legs residing in separate accounts. It’s all outright risk.

Unless you’re managing OPM, or you’re backing another trader, or you want a dedicated account for ATS - this is a stupid idea which is exactly why he’s having difficulty with his broker.

I never mentioned margin credit. I just mentioned an intermarket spread.

 

[Overnight]

Except that there is no “intermarket spread” with legs residing in separate accounts. It’s all outright risk...

Technically, that is not true.

2 accounts, each has 10K.

If he longs ES in account #1 and shorts YM in account #2, he has an intermarket spread in theory. ES goes up 1K in value, YM goes down 1K in value.

So account #1 is at 11K, account #2 is 9K. He is still net 20K total account value. We know he will not be getting the margin discount because they are in separate accounts.

But hell, that is the way it is with any broker that does not apply margin offsets in the SAME account! My broker included! *shakes fist at them*

What you could try to do bone, is get him on the path to true exchange-traded spreads, and get him off the dangerous individual legging wash-sale intra-instrument spread. He might be your next best customer!

 

[bone]

Why can’t you open a new, separate account at a different FCM ?

Convenience isn’t really a good answer.

i am wanting to open up an additional futures account or sub account. there will be no other owners or parties involved in this scheme. i have no intention to bait the IRS with wash sales.

it appears when i gave the reason that 1 was to go Long and the 2nd was to go Short it violates Rule 534 "Wash Trades"

No person shall place or accept buy and sell orders in the same product and expiration month, and, for a put or call option, the same strike price, where the person knows or reasonably should know that the purpose of the orders is to avoid taking a bona fide market position exposed to market risk (transactions commonly known or referred to as wash trades or wash sales). Buy and sell orders for different accounts with common beneficial ownership that are entered with the intent to negate market risk or price competition shall also be deemed to violate the prohibition on wash trades. Additionally, no person shall knowingly execute or accommodate the execution of such orders by direct or indirect means.

what are other reasons i can give to get that additional account?

is it simple enough to state the reason:
i want one account to trade NQ and the another to trade OIL and accomplish this feat.

such a reason indicates bona fide market position for each.

 

[maxinger]

We need multiple accounts as backups.

Don't just depend on just one because there is no such thing
as a 100% reliable trading platform.
Also when the market is very hot, that lousy trading platform
might freeze, or your order might take minutes/hours to be executed.

 

[bone]

Well, using a discount broker can cost you quite a bit of money. And that’s on you.

Technically, that is not true.

2 accounts, each has 10K.

If he longs ES in account #1 and shorts YM in account #2, he has an intermarket spread in theory. ES goes up 1K in value, YM goes down 1K in value.

So account #1 is at 11K, account #2 is 9K. He is still net 20K total account value. We know he will not be getting the margin discount because they are in separate accounts.

But hell, that is the way it is with any broker that does not apply margin offsets in the SAME account! My broker included! *shakes fist at them*

What you could try to do bone, is get him on the path to true exchange-traded spreads, and get him off the dangerous individual legging wash-sale intra-instrument spread. He might be your next best customer!

 

[maxinger]

another reason to open multiple accounts is for
housekeeping/tidiness reason.

One account for say USD denomination.
Other accounts for EUR JPY GBP SEK .... denominations

 

[AbbotAle]

Just out of interest, if a trader has 2 accounts at 2 different brokers and wants to disguise his day trading so uses one account to get in, the other to get out, that wouldn't be wash trading?

Assume he's done a trade, + 1 ES with ABC broker, and taken profits (or a loss) with XYZ broker, he now has 2 positions open (although flat).

If his next trade was a long, he'd buy through XYZ so the XYZ account goes to flat, but he's long because his ABC account was already +1.

Wash trading or not to the above?

 

[Ironplates]

the system is not in a position longer than 10 minutes and is more often than not either long or short. OCCASIONALLY, the buy order occurs a minute before the sell trade buys to cover.

the additional account is there to separate the long and short trades.

it also affords me the opportunity to take net long or net short exposure where i could be long 5 contracts the NQ and short 3 contracts the NQ + short 3 contracts CL.

i simply want a long account and a short account.

trades are settled within 10 minutes or less when each leg completes. i just dont need the trades bumping into each other and taking the system out of synch. especially where a buy signal [buys to cover] my existing short taking me flat and then the short exit signal takes me long again.

 

[Ironplates]

isnt a wash trade where i buy and sell something at the same time and exit each position at the same time resulting in NO progress? That seems circular and a waste of time. The net gains or losses from my strategy are real. The market exposure is real, as is the risk.