haircut charge
- Thread starter yip1997
- Start date
To be clear:
Hedged positions, within 20% long vs. short $$.
6 times your equity = Zero haircut.
6-12 times = 2% per year
12-18= 4%
18-30 = 6%
So, if you go up to 30 times, it averages about 3.6% per year or so.
Don
Hedged positions, within 20% long vs. short $$.
6 times your equity = Zero haircut.
6-12 times = 2% per year
12-18= 4%
18-30 = 6%
So, if you go up to 30 times, it averages about 3.6% per year or so.
Don
Don are you saying I could trade a risk free reversal and make free money? Borrow a million at 2% and earn 5% on the reversal and make a free 30k a month. Your short interest pays close to 5% right? Your lending me money at 2%? If I can put the reversal on for even, that's free money. Something is not right here.
Edit: Actually I would do the conversion for even and if I only have to pay you 2% to hold it I should be able to get enough credit on it to do it for a credit. The credit is priced off of the 5% carry, not 2%. That means there is something to exploit here either way.
Edit: Actually I would do the conversion for even and if I only have to pay you 2% to hold it I should be able to get enough credit on it to do it for a credit. The credit is priced off of the 5% carry, not 2%. That means there is something to exploit here either way.
u cant put them positions at BT. Options are a no-no ...unless u have a huge ass acct at BT, and....place your 5 -10 conditions that must be satisfied until u get option priveleges.
Well this is an easy one .... I am sure someone ( or even everyone ) will try and want to BORROW at below Fed Rates .... the question is who is going to LEND it to them
Haircut, by definition, is a risk fee. Goldman may charge you 6.50% on $$ used (if needed), and they pay you 5% on your short stock, so you have a 1.5% differential (not bad compared to a lot of places).
We allow 6 times with no haircut as mentioned.
That might make a difference in Mav's calculations.
We have people who pay $2,000-$10,000 in h/c (happily) when they're making $15,000 - $75,000 per month.
We just had a guy bring over $700K so he can use $15 million, and boy is he ever using it, LOL. Making good money so far.
Don
We allow 6 times with no haircut as mentioned.
That might make a difference in Mav's calculations.
We have people who pay $2,000-$10,000 in h/c (happily) when they're making $15,000 - $75,000 per month.
We just had a guy bring over $700K so he can use $15 million, and boy is he ever using it, LOL. Making good money so far.
Don
To correct: All traders may buy up to 25% of their account of options. Traders can have conversions, as Mav said. Traders can have One-to-One long short option positions.
Just like to keep things "real".
All the best,
Don
Don, are you saying there is not a free interest rate arb here? The conversion prices in a 5% carry. There should be 300 bp of free money here. In fact, it's a pseudo interest rate swap. You are swapping a fixed 2% for a floating 5% from Goldman. Where am I wrong here?
Quote from trendmomentum:
Well this is an easy one .... I am sure someone ( or even everyone ) will try and want to BORROW at below Fed Rates .... the question is who is going to LEND it to them
Don is lending you at 2%. Did you see it? j/k.
I want to borrow at that rate, but I don't know the catch. There must be a lot of fine prints in the contract that is not disclosed yet.