Prop options firms

Thanks for all the kind words. Trust me, it was an honor just being nominated. Oh sorry, that was my Oscar speech.

The reason I don't keep responding to a lot of these new threads on prop firms and prop options is because I believe I have said just about everything one can say over the course of the last 5 years. It's all tucked away in the archives. I have talked about risk based haircuts ad nauseam. I've talked about managed money, the differences between CPM and haircuts, the benefits of prop over retail, the differences between options, stocks, futures. The benefits of trading in an office vs remote. The benefits of having a mentor. All that has been discussed and discussed again.

I try to jump in when either some new question or concept is brought up. Such as when a silly thread gets started, all prop firms are going to go out of business. So there you have it. Have a great Labor Day Weekend everyone.
 
Quote from xiangfin:

What's the deposit requirement by ECHOTrade for options?

Thanks.
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Going out on a limb here, but you might try this (from their website).

Feel free to call us toll free @ 866-700-ECHO

Tell them Don Bright sent you, LOL.

Don
 
Quote from caementarius:

...And when you get the answer, you can post it so the rest of us know. :D
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I wanted to bring this topic up again since these firms are less understood in general than prop equities and in case any new firms were around.

I've heard of VTrader, Simplex, and Cassandra in this thread. Are there any other firms (JBOs) where one might trade options with haircut margins?

Are there any firms where that could be done with $15K or less?

Instead of a normal MBA internship this summer, I had the thought that I would essentially build my own internship by preparing in the spring and having a focused trading experience this summer. I'm taking an options class and I would like to explore some of the more sophisticated strategies. I'm a programmer by trade, so I'd like to spend the summer tweaking some models and executing a few strategies. Who knows, it might even turn into something great. :D
 
Your "sophisticated options strategies" comment invoked a bit of interest in me...so I googled it and got this: http://www.smartmoney.com/options/index.cfm?Story=sophisticated1111

Straddles
Strangles
Bull and Bear call spreads
Butterfly's
Verticals
Boxes
Condor
Iron Condor

And they don't even mention the most basic Conversions and Reverse conversions to generate interest differentials.


I hope that these are not the "sophisticated" strategies you're referring to...these are the most basic, and the exact same things we did on the options floors in the 1970's and 1980's. Back then we were trading for quarter points, not pennies, and against a lot of less "sophisticated" people, public and institutional.

I, of course, realize that there are many other things that are being done these days....

I would think that Maverick74, indexarb and some of the current experts would be happy to list a few of the currently working techniques for you.

(The only reason I bring this up is that every month or so I speak with new traders who have read a book or studied options at some level and think they have found something new and different to make money with using options.)

I do applaud your efforts and your plan to actually "do" rather than simply "study" during the Summer, and wish you the best!

Don
 
Quote from caementarius:


Are there any firms where that could be done with $15K or less?

Instead of a normal MBA internship this summer, I had the thought that I would essentially build my own internship by preparing in the spring and having a focused trading experience this summer. I'm taking an options class and I would like to explore some of the more sophisticated strategies. I'm a programmer by trade, so I'd like to spend the summer tweaking some models and executing a few strategies. Who knows, it might even turn into something great. :D
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You can trade at Simplex with less than 15k....i talked to them a few months back and they said a few guys started with only 7-10k and survived a few years.

Also, dont forget about the monthly desk/data fees at the prop shops....most of those are at least a hundred a month.

If you want to "build your own trading internship" you may want to think about taking that 15k and going to KCBOT and trading some wheat & options on the floor over there....last time i talked to them monthly leases were only around $500, plus you'll have discounted commissions and access to all the information/news/quotes offered on the floor. You'll probably learn more (and network with more traders) on a trading floor rather than in some trading arcade.
 
Quote from Don Bright:

I hope that these are not the "sophisticated" strategies you're referring to...these are the most basic, and the exact same things we did on the options floors in the 1970's and 1980's. Back then we were trading for quarter points, not pennies, and against a lot of less "sophisticated" people, public and institutional.
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Right. I am not talking about these but a market-maker approach - not so much "hunch-based" trading.

By sophistication, I mean I'd like to employ some of what I've learned about linear/quadratic optimization and stochastic programming.

I do applaud your efforts and your plan to actually "do" rather than simply "study" during the Summer, and wish you the best!

Don
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Thank you - :D
 
Quote from jsmooth:

If you want to "build your own trading internship" you may want to think about taking that 15k and going to KCBOT and trading some wheat & options on the floor over there....last time i talked to them monthly leases were only around $500, plus you'll have discounted commissions and access to all the information/news/quotes offered on the floor. You'll probably learn more (and network with more traders) on a trading floor rather than in some trading arcade. [/B]
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Thanks - This is some good out-of-the-box thinking and I like it!

For some reason I thought you had to be sponsored by a member firm, licensed, or that there was a fair amount of red tape between an independent guy and the floor. Is it really do-able? How about in Philadelphia (closer and has equity options)?
 
Quote from caementarius:

Thanks - This is some good out-of-the-box thinking and I like it!

For some reason I thought you had to be sponsored by a member firm, licensed, or that there was a fair amount of red tape between an independent guy and the floor. Is it really do-able? How about in Philadelphia (closer and has equity options)?
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You just have to register yourself as a Floor Trader (with the NFA), sign a lease aggreement with the exchange - there is also a application fee and deposit (that you can get back after your lease expires), and some ethics classes the exchange will make you take. Then you just open an account with a clearing firm. You'll also want to lease a workstation around the floor to set up a laptop/phone so you can trade all the electronic markets while down there....just call the exchanges they'll answer all your questions and give you exact price quotes

I dont know anything about the Phily exchange
 
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