How can i get this type of leverage ?

[MrAgi1]

Oh, so you want to write (sell) options (on stocks or indexes I presume)?

This in itself requires some serious margin money, as it exposes you to unlimited risk, unless you put an hedge of some kind. Plus options brokers will need to approve that type of account first. Usually only sophisticated, experienced and well-to-do traders are allowed to sell options, the others can only buy puts or calls.

Do you have some experience as far as selling options is concerned?

Yes i have experience in selling options.

 

[MrAgi1]

You said you backtested so I assume you have some theoretical paper returns. I'd worry about trading some small size and comparing backtest results to see if it works before I worried about finding leverage.

If the backtest only make it profitable by using leverage not provided, then its not profitable, theirs no edge there. If that type of leverage is required to make it profitable at any scale, theirs just no edge.

No it is profitable without leverage. Just to maximize my returns.

 

[MrAgi1]

OP misunderstand how leverage works. Ask this question to yourself : Would I give 50:1 margin to anyone that will only put up 0.5 % of the total value size of an instrument that is all ready leveraged and has a high volatile range. The downside is so big, that it it could whipe out your hole net worth and more. You are looking for someone to take that risk from your hands. No broker that works under strict reglemented rules would do that.

Ok i understand. But i have all my risk hedged. With the underlying. The strategy is a combination of futures and options and the underlying. So there is only as much that i am risking. And the broker could even stop me out once my loss is greater than half of my deposited margin(they don't have to wait till my margin is completely exhausted). It is fine with me. This is because i know how much i am risking.

I understand how leverage works. There is so much bad omen around use of leverage. Well if you have a bad strategy you will still loose even though you use no leverage, and with leverage you would still lose. Just that leverage makes you loose faster than you expected. So no opportunity for risk management.

In a non-directional hedging/arb strategy that i am talking about leverage does not really magnify my risk to unlimited. It is basically to maximize my profit.

Anyways. Thank for response. It seems my question in not well understood or most probably no such companies/ brokers exist.

 

[MrAgi1]

1. Thinkorswim is primarily an options platform, and is very good for that. However, it is a shitty platform when it comes to futures and Forex.

2. You aren't going to find the type of leverage you seek with US-based brokerages. You can easily find that type of leverage outside the United States. My instincts tells me brokerages that offer that type of leverage tend to be very seedy, usually located in places such as Russia, Greece or the Caribbean. I could be totally wrong. But that's what my instincts tell me.

There was a time when I briefly considered Forex, and came across this brokerage offering 1000:1 leverage.

https://www.tradersway.com/

I cannot vouch for them, so please proceed with caution.

Yes based on the us regulations seems offshore only. But most offer no options trading. So that is why i am looking for a sort of margin lender, that opens an account themselves on any broker in the world and then they restrict the maximum potential portfolio loss to a particular value. The max loss could be 75% of the client deposited margin.
Well hard to explain. Probably no one understand what i am typing.

 

[p0box4]

Yes based on the us regulations seems offshore only. But most offer no options trading. So that is why i am looking for a sort of margin lender, that opens an account themselves on any broker in the world and then they restrict the maximum potential portfolio loss to a particular value. The max loss could be 75% of the client deposited margin.
Well hard to explain. Probably no one understand what i am typing.

We do understand but you are not going to get a stranger to do that. Maybe with a very very solid track record and once they personally know you, you can find someone to take that risk.

You will have to build your account or get someone you already know to get on board.

 

[MrAgi1]

With $1000 deposited at AMP you can trade 2 ES contracts. Each ES contract is worth $152862,5. Not sure how that is not enough leverage? A 10 point move and your $1000 are gone.

Last trading session there where multiple 10 point moves within 1 minute time ... Less then 1 minute on the wrong side and your account balance is $0.

You mean two Es contracts( so 500$ each)? What about initial margin requirements? I am not day trading i am swing trading ?

Am i missing something here?

 

[p0box4]

You mean two Es contracts( so 500$ each)? What about initial margin requirements? I am not day trading i am swing trading ?

Am i missing something here?

If you are holding overnight you indeed will need more margin, with AMP the maintenance margin for ES is $12.000 per contract. I don't think there is any way to get around this.

 

[danielc1]

Ok i understand. But i have all my risk hedged. With the underlying. The strategy is a combination of futures and options and the underlying. So there is only as much that i am risking. And the broker could even stop me out once my loss is greater than half of my deposited margin(they don't have to wait till my margin is completely exhausted). It is fine with me. This is because i know how much i am risking.

I understand how leverage works. There is so much bad omen around use of leverage. Well if you have a bad strategy you will still loose even though you use no leverage, and with leverage you would still lose. Just that leverage makes you loose faster than you expected. So no opportunity for risk management.

In a non-directional hedging/arb strategy that i am talking about leverage does not really magnify my risk to unlimited. It is basically to maximize my profit.

Anyways. Thank for response. It seems my question in not well understood or most probably no such companies/ brokers exist.

An example of an non directional/arbitrary going wrong with huge leverage is Long Term Capital. And they where genius in their field of economics and math... You do not know what you do not know and using huge leverage in an uncertain environment as a financial market is crazy. There are many bold traders, but there is none old bold trader.

 

[David's faith]

Some brokers dont let you close your positions when your balance is negative, bc you "can't afford their comission" letting the trade run further against you. They also hedge against you and win money when you lose some.

 

[MrAgi1]

Some brokers dont let you close your positions when your balance is negative, bc you "can't afford their comission" letting the trade run further against you. They also hedge against you and win money when you lose some.

Okay. So that is why the position is liquidated long before it goes into negative territory. That is why a risk limit is to be placed on the account, which a percentage of the deposited margin.