Proprietary Trading Firms

Quote from JMowery1987:

.... now that just somehow made me scared... I'd be ......... destroyed if something like that happened.
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Yep, it can certainly be scary...have you checked your firm's balance sheets lately?

Don
 
Quote from Don Bright:

Maximum would be 1% per month for naked positions.

Don
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Don,

I think he meant how much can he hold overnight, not what you charge him for holding overnight.
 
Quote from Maverick74:

Don,

I think he meant how much can he hold overnight, not what you charge him for holding overnight.
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Once again, variables involved...$$ in account, time with Firm, profitability, etc. We start with share size ..5,000 per stock, 10,000 share aggregate ($10 stock, or $70 stocks, so "leverage" is not an absolute).

We have those who use 50 or even 100 to one...(with a short leash, LOL)....

Don
 
Quote from Don Bright:

Once again, variables involved...$$ in account, time with Firm, profitability, etc. We start with share size ..5,000 per stock, 10,000 share aggregate ($10 stock, or $70 stocks, so "leverage" is not an absolute).

We have those who use 50 or even 100 to one...(with a short leash, LOL)....

Don
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A 100 to 1 leverage overnight?
 
Quote from Don Bright:

With prior permission and good plan, it happens...

Don
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Wow. LOL. So a 1% move overnight in the stock would completely wipe the trader out. I hope he has a VERY good plan. :D
 
Quote from FaderTrader:

Don - are you sure you meant overnight 100:1? That's just plain reckless.
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$5,000,000 long, $6,000,000 short = $11,000,000 ..some have this with $100K in their account....

For "naked positions" it "happens" but usually whan a trader has tried to "leg out" of a pairs trade and loses money, thus lowering his equity and raising his "x times" factor.

With 550 traders or so, and being in the business forever, we've had perhaps 25 traders who ever gave us much trouble in the risk arena...most traders are serious about their profession and shouldn't "go on Tilt" very often. Generally when they ask ahead of time to take something home, they already know the answer will likely be "no, cut some back, then ok"...type of thing.

Don't get me wrong, I dont' advocate high risk postions...we just allow $$ usage to competent traders.

Don
 
Quote from Don Bright:

$5,000,000 long, $6,000,000 short = $11,000,000 ..some have this with $100K in their account....

For "naked positions" it "happens" but usually whan a trader has tried to "leg out" of a pairs trade and loses money, thus lowering his equity and raising his "x times" factor.

With 550 traders or so, and being in the business forever, we've had perhaps 25 traders who ever gave us much trouble in the risk arena...most traders are serious about their profession and shouldn't "go on Tilt" very often. Generally when they ask ahead of time to take something home, they already know the answer will likely be "no, cut some back, then ok"...type of thing.

Don't get me wrong, I dont' advocate high risk postions...we just allow $$ usage to competent traders.

Don
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Don,

I know you are lobbying hard in DC to put pair trading courses in our public school system (just kidding of course), but the original question by the poster was what the margin would be on a naked overnight positon, not a trillion dollar pair trade. LOL.

Don, have you ever thought about running for public office? Your technique is flawless. Maybe even a White House Press Secretary? :D
 
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