Looking for improved leverage broker/platform

A

alphahunter

I have currently been trading through IB, but I am looking for a platform/broker that may offer improved leverage if anyone has experience with this. Basically I trade arbitrages that should net very nicely to almost no risk in risk based models- think SP futures vs the 500 spx basket names (stocks) in perfect ratios. Or SP futures vs SPY etf.

Sadly, with IB portfolio margining I still can only leverage to x2- basically for every $1 I could only buy $1 vs sell $1 of value- obviously I need to achieve greater leverage for these "minimal credit" type strategies.

Does anyone have any advise or experience with other brokers/prime brokerage/platforms that offer improved portfolio margin leverage.

Thanks
 
Good morning alphahunter, Today, the OCC and NFA can't agree on who will regulate customers with cross margining. So even though PM offers offsets within a product group-i.e. .SPX vs .NQ vs SPY vs QQQ, it does not look at any futures positions you have. If you want reduced margin, you need to stay with one asset class. Futures on the CME and cash settled indexes on the CBOE will have their own accounts, their own margin requirement. In the PMA you can hedge .SPX with other broad based cash settled indexes that are correlated and also ETFs that are correlated. Even though some online brokers like IB and TD offer universal accounts, the futures and option on futures must be traded in a segregated account separate from your PMA.

alphahunter said:
I have currently been trading through IB, but I am looking for a platform/broker that may offer improved leverage if anyone has experience with this. Basically I trade arbitrages that should net very nicely to almost no risk in risk based models- think SP futures vs the 500 spx basket names (stocks) in perfect ratios. Or SP futures vs SPY etf.

Sadly, with IB portfolio margining I still can only leverage to x2- basically for every $1 I could only buy $1 vs sell $1 of value- obviously I need to achieve greater leverage for these "minimal credit" type strategies.

Does anyone have any advise or experience with other brokers/prime brokerage/platforms that offer improved portfolio margin leverage.

Thanks
More...
 
Thanks, but I had spent 10+ years at a prop firm, and although I wasn't involved in COO type work/ PB relationships and negotiations, I do know that we were able to have their risk models reexamined over time and helped up achieve much larger leverage across asset classes- so I don't think its as black and white as you suggest, although I also don't think I am large enough on my own to bother/negotiate if I were to move to PB- would be a small player that they would tolerate.

Trend2009- thanks for the great advice as well.
 
As mentioned already, you will need to go with a Prop/JBO to get relief between futures and non futures options. When I held SPX option combos vs futures it was no problem in JBO, but very high margin with Portfolio Margin. The problem now is with the Prop/JBO firms I know of now, they will require high capital and will want to take a cut of your profits and you will need a Series 57, so you will be considered a Pro instead of a standard customer.

You can check out Sumo Capital
Services | Sumo Capital
 
I believe that it's kinda wird to ask such questions, because tradesr of course can advice you some brokers, but you will have to test them by your own anyway. You'd better serach for such brokers by your own in the internet, because you will save much more time, rather than asking on forums. In my opinion, traders always should wisely dedicate their time. No problems actually, I just want you to search for brokers in the internet, because there are plenty of such ones around there, which can possibly satisfy your needs. The main here is never give up and always strive for the best. Have a good search.
 
I guess that improved margin leverage is a very high risk. The vast majority of brokers offer leverage like 1:2000 as maximum leverage because they understand that if you don't have enough skills and experience you will just blow your account and of course, you will accuse your broker of it. Nevertheless, leverage cna possibly bring lots of money in case you have proper experience and really know your business. I would never advice traders to use leverages because as a rule it's a direct way to blowing an account, although, some traders are eager for taking risks. You can search for such broker in the internet actually.
 
Mesida said:
I guess that improved margin leverage is a very high risk. The vast majority of brokers offer leverage like 1:2000 as maximum leverage because they understand that if you don't have enough skills and experience you will just blow your account and of course, you will accuse your broker of it. Nevertheless, leverage cna possibly bring lots of money in case you have proper experience and really know your business. I would never advice traders to use leverages because as a rule it's a direct way to blowing an account, although, some traders are eager for taking risks. You can search for such broker in the internet actually.
More...
Which broker offers 2000 leverage?
 
Mesida said:
I guess that improved margin leverage is a very high risk. The vast majority of brokers offer leverage like 1:2000 as maximum leverage because they understand that if you don't have enough skills and experience you will just blow your account and of course, you will accuse your broker of it. Nevertheless, leverage cna possibly bring lots of money in case you have proper experience and really know your business. I would never advice traders to use leverages because as a rule it's a direct way to blowing an account, although, some traders are eager for taking risks. You can search for such broker in the internet actually.
More...
Medisa,

Any reputable, (I.e. developed country, solid balance sheet where you could sleep easily with significant capital with them) that you have come across offering more than 10x leverage with reasonable rates a (less that prime +150bps)?

Haven’t found anyone that actually would offer me the leverage I need for my strategies.
 
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