Ha! And still you two peas in a pod continue to post in this "shit hole". Ya know, if I were to crap in my pants, I would immediately throw them away and get a new pair. You apparently would continue to wear them, all the while, of course, complaining about there being crap in your pants. Don't like here? Stop posting, and don't let the door hit ya in the ass on your way out.
How about a half E-mini contract?
- Thread starter lindq
- Start date
Ha! And still you two peas in a pod continue to post in this "shit hole". Ya know, if I were to crap in my pants, I would immediately throw them away and get a new pair. You apparently would continue to wear them, all the while, of course, complaining about there being crap in your pants. Don't like here? Stop posting, and don't let the door hit ya in the ass on your way out.
One option worth checking out may be single stock futures using SPY. Margin for SSF, last time I checked, was 20%.
I doubt they would seriously consider a small mini contract. If you look around at most of the other smaller contracts, for instance in gold, oil, etc. they don't trade alot of volume.
As the poster above mentioned you should do a single stock future on SPY. 200 Shares of SPY is about half an ES. A single stock future you would trade the equivalent of 200 shares of SPY.
Or the other possibility would be doing deep in the money puts and/or calls. There are a wide variety of instruments you could trade these on...ES, SPY, SPX to mention a few. If there was any premium in the deep in the money position, you would then sell an out of the money put or call, thus creating a "synthetic" position.
A little creativity on your part should enable you to create an equivalent position.
OldTrader
As the poster above mentioned you should do a single stock future on SPY. 200 Shares of SPY is about half an ES. A single stock future you would trade the equivalent of 200 shares of SPY.
Or the other possibility would be doing deep in the money puts and/or calls. There are a wide variety of instruments you could trade these on...ES, SPY, SPX to mention a few. If there was any premium in the deep in the money position, you would then sell an out of the money put or call, thus creating a "synthetic" position.
A little creativity on your part should enable you to create an equivalent position.
OldTrader
Thats easy, it happened all the time. We based all our positions off our fund, and our posted returns were the funds returns. Individually managed accounts expected their returns to exactly match the posted returns. (Investors would complain all the time if they were off by more than 10 basis points, especially if they were under the funds returns).
The fund is a $20MM account and is long 10 mini S&P. The $1.5MM account has 7.5% of the equity compared to the fund.... that means it should be long 0.75 mini S&P. Obviously it needs exposure to the S&P so we buy 1 contract for the $1.5mm account, which is too much exposure. If the s&p accounts for a 1% return for the fund, the managed account is 25 basis points behind for the month.
This happens all the time across all markets, most CTAs primarily have multiple managed accounts and are only authorized to trade futures, because they would prefer not to answer to the SEC.
The smaller the contract the easier it is to get the right balance. This would also apply to hedgers...
5yr
PS Why would a smaller contract be more volatile?
I'm not one to comment much on how others run their business... but that's having your equity exposed only 1.25% in the ES.
Why bother? Does your pool have "80 positions"... each with 1.25% exposure?
Rhetorical... no reply expected.
Yes, typically 50 positions and some of them small. If you are trading the Nikkei, Hang Seng, SPI, Eurostoxx, Dax, CAC, FTSE, Dow, Nasdaq and S&P you need to limit your exposure to any one of those markets, otherwise you would be way over exposed to equities.
If the exposure is 10 times that the smaller account would need 7.5 contracts... same problem, the example is amplified on the smaller exposures though.
We basically couldn't offer an individually managed account that was funded with less than $1mm and even that was difficult to get similar exposure to the fund.
5yr
(I edited my previous post... the math was wrong, either way 2.5% exposure to S&P, may seem small, but the example holds)
How is having 50 positions (100%pool as you seem to state), in equities not over exposing you to equities?