Margin (sub)accounts together - possible ?

C

CALLumbus

Hi,

I would like to know if it is possible to have 2 accounts or subaccounts with one FCM, but the margin for the 2 (sub)accounts is "shared", kind of a cross-account margin calculation.

Lets say I trade only the Bund future (FGBL), but with 2 different strategies, both only intraday, no overnights. Lets say during one trading day I have a position of LONG 5 contracts FGBL for strategy A. For strategy B, at the same time I have a position of SHORT 12 contracts FGBL.

If I trade these 2 strategies through 2 completly independent accounts, my total margin requirement would be the margin for 5+12=17 contracts.

But in reality, my true position at that time is 5-12=-7, SHORT 7 contracts.

Is there a way to set up an account with a broker/ FCM so that they can net the total margin requirement over 2 (sub)accounts to reflect the true net position and lower the margin requirement ?

Thanks for any input !

Greetings,
CALLumbus
 
What you can do is have two traders, members of the same entity. Create one master account with the cash. Sub accounts to monitor P & L, but the master account is where they calculate margin. You can't share equity and margin if the accounts have different owners and different EIN#.
 
CALLumbus said:
Hi,

I would like to know if it is possible to have 2 accounts or subaccounts with one FCM, but the margin for the 2 (sub)accounts is "shared", kind of a cross-account margin calculation.

Lets say I trade only the Bund future (FGBL), but with 2 different strategies, both only intraday, no overnights. Lets say during one trading day I have a position of LONG 5 contracts FGBL for strategy A. For strategy B, at the same time I have a position of SHORT 12 contracts FGBL.

If I trade these 2 strategies through 2 completly independent accounts, my total margin requirement would be the margin for 5+12=17 contracts.

But in reality, my true position at that time is 5-12=-7, SHORT 7 contracts.

Is there a way to set up an account with a broker/ FCM so that they can net the total margin requirement over 2 (sub)accounts to reflect the true net position and lower the margin requirement ?

Thanks for any input !

Greetings,
CALLumbus
More...
Sorry,I just noticed the offset question I will find out for you.
 
CALLumbus said:
Hi,

I would like to know if it is possible to have 2 accounts or subaccounts with one FCM, but the margin for the 2 (sub)accounts is "shared", kind of a cross-account margin calculation.

Lets say I trade only the Bund future (FGBL), but with 2 different strategies, both only intraday, no overnights. Lets say during one trading day I have a position of LONG 5 contracts FGBL for strategy A. For strategy B, at the same time I have a position of SHORT 12 contracts FGBL.

If I trade these 2 strategies through 2 completly independent accounts, my total margin requirement would be the margin for 5+12=17 contracts.

But in reality, my true position at that time is 5-12=-7, SHORT 7 contracts.

Is there a way to set up an account with a broker/ FCM so that they can net the total margin requirement over 2 (sub)accounts to reflect the true net position and lower the margin requirement ?

Thanks for any input !

Greetings,
CALLumbus
More...

Yes, when you have a master/Sub account structure at an FCM that allows this, the sub account positions are netted out for margin. If you are long 10 ES in account 1 and short 10 ES in account 2, your margin is zero.

This may not apply to IB master/sub accounts which have a different set up.
 
Hi Robert,

thank you for your input.

I have contacted a few FCMs, but so far I have not found one who would set up (sub)accounts like this. Do you know a FCM that would allow this ?

Thanks !
 
FC Stone. The master/sub is used for two purposes. A prop group with many traders and an investor that wants to set up one account and invest in many CTAs. It is a more efficient use of capital.

Bob
 
Robert, thanks for the help. Good to know FC Stone can set this up for their clients. Another reason to keep FC stone on top of my list when it is time to open a new account.

Thanks again, and have a nice day.
 
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