Prop and odd lots

T

TrueRange

I used to trade @ Worldco(ugh..another story all together) and they didn't let us trade in odd lots. Now after a few years of swing trading I want to venture back into intraday activity. So, my question is nowadays what prop firms allow odd lot activity? The reason being is after taking a few beatings I have learned proper position sizing in accordance to my account size. And I only wish to risk .25% of my cap contribution per trade as my stop loss(I also take .60% as my tgt). I also shut down the days activity at a full 1% loss or 4 losers in a row.

For example if my cap is at 25k i`ll risk $62.5 per trade/.25= 250 shares.

I will NOT trade any other way...I trade to make money not churn and blowout.

I tried a search and didn't find anything like this...sorry if its a repeat.

TR
 
250 shares isn't an odd lot, it's a mixed lot. Odd lots are under 100 shares.

You can trade odd lots on nasdaq, or listed stocks if you are using ecn's. If you route odd lots to nyse at a prop shop, you'll likely get in some trouble. It's ok if you are exiting the remnants of a position though.

With that size, why not just trade retail?
 
Quote from lescor:

250 shares isn't an odd lot, it's a mixed lot. Odd lots are under 100 shares.

You can trade odd lots on nasdaq, or listed stocks if you are using ecn's. If you route odd lots to nyse at a prop shop, you'll likely get in some trouble. It's ok if you are exiting the remnants of a position though.

With that size, why not just trade retail?
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Hello Lescor I have lurked here for awhile and respect your posts...and trading prowess.

The 250 size was just an easy example...it is usually something like 267. Or it may be 83 shares with something like GOOG or CME.

Why will I get in trouble if I trade odd lots at a prop firm? I can trade odd lots retail all day long, no?

Because I would like to get the leverage...but use it wisely. With a 25k account even after 4-1 intraday i`ll end up creating a margin call with a high freq style.

Like I said I have been swing trading for sometime so i`m out of touch with daytrading rules and regs.

thanks
TR
 
I understand your logic but it sounds a little weird. Why don’t you just round to the nearest 100 or even 50? I don’t think I would want your business if I was a firm hearing a guy tell me he wants to trade 184 shares on one stocks and 231 of another. To start there is very little to make off a 100 share trader. So to now add extra pain it’s not worth the business.
 
Quote from brokerboy:

I understand your logic but it sounds a little weird. Why don’t you just round to the nearest 100 or even 50? I don’t think I would want your business if I was a firm hearing a guy tell me he wants to trade 184 shares on one stocks and 231 of another. To start there is very little to make off a 100 share trader. So to now add extra pain it’s not worth the business.
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I hear you, but the stocks I trade have an ATR of 2 or greater over 21day per(hence TrueRange). So they are high flyers...WFMI...GOOG...CME...BZH....OIH..etc.

If I had a deposit to cover my losses and was paying some BS data fee charge why would it matter if I traded 1000 or 80 a clip? Data is scalable and I`m a pro so no hand holding.

Are you saying that if i rounded to 50`s it would be more attractive?
 
An additional point on trading odd lots on ECNs - you are correct in that you can trade odd lots on the ECNs, but some charge an additional fee on the fill to do so.

Also, if you do it a lot - the investigation arm of the exchange will eventually ask you why you are doing so.

From a hassle perspective (not risk), trading in 100 lot minimums is easier.
 
Quote from jlm890:

An additional point on trading odd lots on ECNs - you are correct in that you can trade odd lots on the ECNs, but some charge an additional fee on the fill to do so.

Also, if you do it a lot - the investigation arm of the exchange will eventually ask you why you are doing so.

From a hassle perspective (not risk), trading in 100 lot minimums is easier.
More...

Interesting. I would have no trouble showing a possible investigator my position sizing algo in Excel. I understand that odd lots don't print to the tape so this must be a concern to them from a manipulation standpoint.

thanks for the info
 
Quote from TrueRange:



Because I would like to get the leverage...but use it wisely. With a 25k account even after 4-1 intraday i`ll end up creating a margin call with a high freq style.
More...

I don't understand why you would create a margin call. Explain that please.
 
Just a question about odd lots for a prop trader:

I used to trade 1 share of a stock on ECN's for testing strategies (I am trading prop), for example 1 share of IBM/MSFT/BRCM on for example ARCA. I was recently told by my company I could no longer do this: "It is a misconception that odd-lot trading is permitted on ECN's. It is never permissible to enter a position using odd-lot orders on any exchange or ECN, no exceptions."

I know this applies when sending orders to NYSE, but does this really apply to ECN's as well?
 
"I know this applies when sending orders to NYSE, but does this really apply to ECN's as well?"

Ever since ARCA became an exchange, they follow the same rules as the NYSE for odd-lots.
INET is a little vague on this... they say that you can do it, but your firm (and you) will most likely be faced with some sorta compliance review by INET. And, you probably don't need that.
 
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