How do you approach trading spreads like this?

... also do I have to bite the bullet and pay $0.99 commission/side through Advantage or Sweet, etc, or can I get away with $0.49 through one of the smaller Dorman IB's? (I hear Dorman calculates span correctly)
 
Adam777 said:
... also do I have to bite the bullet and pay $0.99 commission/side through Advantage or Sweet, etc, or can I get away with $0.49 through one of the smaller Dorman IB's? (I hear Dorman calculates span correctly)
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If you're swing trading for 50 tics does the $2 matter ? I've got guys who average ~ $550 per winner on average with one lots for gosh sakes. Firms like Advantage have the buying power to offer TT and CTS on a transactional basis - which is ideal.

If you're trying to prop Day trade you're stuck with the firm's Commission haircut, the firm's desk charges (yep, you're paying for their overhead - it's not coming out of their split) and the firm's lousy trading limitations (business plan being how to squeeze the most money out of the employee with the least risk and capital outlay).

Modern futures prop firms are incredibly risk averse, they're not going to train you, and don't expect any sort of help from another trader.
 
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bone said:
In terms of swing trading, this is absolutely NOT the case. I have had probably 75 clients who have started trading live with $20K accounts.
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Yes I referring to someone who wanted to trade double flys 'properly'. By 'properly' I meant for a living and have the chance to earn anything like a meaningful amount of money.
 
bone said:
Having been a big Chicago prop futures spread trader in the past, from my experience the firm is going to insist that you're flat at the end of each day - and that IMO kills the trade you're speaking of here on this thread (and similar ones). There are some very experienced prop traders that carry substantial positions (in Chicago mostly yield curve and STIRS) but they've earned their chops at the firm and are way up there in terms of positive equity with the firm.

For day trading, if you are tight with your legs there's no way you're going to come even fractionally close to the $100K you suggest with the liquidity that's being discussed for these particular trades in this thread.
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I don't know how it works across the pond but over here in UK overnights are not a problem but you will normally get billed interest on the margin. As an example if you deposit $100k into your account, they will likely give you around a 200 clip max position in calender oil. This would enable you to put on a 25 lot in a double fly. That sort of ball park.

Yes you need overnights to be able to trade double flys, absolutely. As you pointed out margin is never the problem trading spreads (and with futures in general) as it is crazy low. The $100k minimum account figure I came up with for being able to trade double flys properly was purely based on someone who wanted a reasonable chance of doing it for a living with sensible risk management.
 
Just finished reading. Much thanks to people on this thread certainly helps a retail trader but no substitute to homework, practice and maybe working in a prop firm. So now to practice


.how do u guys define away from the front month?
A) So a fly would be 2nd,3rd,4th etc?
B) wider the legs - more risk, margin and profit?

Will see if I can chart the synthetic calendar flys on qtrader to see how a butterfly chart looks like

Seems to me to be start of a 2 year journey...
 
Just to clarify for question A... i meant what is a good front month to try eliminate delta risk of the underlying.. especially in CL and NG
 
jokertrader said:
Just to clarify for question A... i meant what is a good front month to try eliminate delta risk of the underlying.. especially in CL and NG
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Eliminate the first three months for sure. We actually trade '18, '19, '20. There's a big issue with lag and synthetic Spread expressions - charting the exchange supported Spread solves that issue.
 
bone said:
There's a big issue with lag and synthetic Spread expressions - charting the exchange supported Spread solves that issue.
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I think he's referring to synthetic flies using one cal - another cal, not 4 outrights - pretty sure CQG can do that. The exchange traded fly charts aren't super useful due to lack of volume.
 
bone said:
Eliminate the first three months for sure. We actually trade '18, '19, '20. There's a big issue with lag and synthetic Spread expressions - charting the exchange supported Spread solves that issue.
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I understand about avoiding the first three months outrights (M, U, Z), but now I see that their implied prices are seen in the exchange traded spreads, as I guess it's just a matching engine to get more liquidity into these products.

So are you avoiding the first three months in the exchange traded calendars that make up the "synthetic flys", and also avoiding these three months in the "exchange traded flys" etc as well?

I'm loving the exchange spreads as I can set my stops and targets and walk away from the screen - thanks Peter!
 
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