Leverage for options which are already leveraged? I'm not sure I have heard of that (not that I have really looked). Is this unique or are there firms out there doing this sort of thing? On the surface it sounds interesting so I checked out their web site and I sent them an email but haven't heard back from them yet. The 50%+ APR is pretty steep for overnight positions :eek:. Would eat up all of your profits on credit spreads and then some if your time frame is relatively long (~30 days) like most of us here.
SPX Credit Spread Trader
- Thread starter El OchoCinco
- Start date
Leverage for options which are already leveraged? I'm not sure I have heard of that (not that I have really looked). Is this unique or are there firms out there doing this sort of thing? On the surface it sounds interesting so I checked out their web site and I sent them an email but haven't heard back from them yet. The 50%+ APR is pretty steep for overnight positions :eek:. Would eat up all of your profits on credit spreads and then some if your time frame is relatively long (~30 days) like most of us here.
Many props require 7s so if they do not require you have one then one step less to worry about.... 
Quote from volatilitypimp:
Yes, it is prop. No 7 required.
you are not forced to take on any overnight margin. That is only $$ over and above your equity in the position that gets charged the interest.
Most that trade there are 'upstairs market makers' for lack of a better word. They trade pure arbitrage.
If the synthetic is offered 10 cents over stock, buy the combo, sell the stock. Or the box-jelly roll is nickel bid in Phlx offered 15 cents over on ISE, sell the ICe, buy Phlx, stuff like that.
Since these are considered lock positions, there is no overnight margin to contend with. Nickel and dime the market is what this is all about. Or what the owner likes to say, "Get the edge, then hedge".
Yes, regular margin interest is charged, which is broker's call rate +something%, not sure of exact figure but much less than the vig charge.
Quote from optioncoach:
Many props require 7s so if they do not require you have one then one step less to worry about....
Which one is better? Higher leverage or haircut margin?
With haircut, you can trade more contracts without paying any interest. however if you use the firm's capital to get a higher leverage, you will be charged overnight interest. It seems to me that it is better to go with jbo for haircut margin because you don't have to pay any interest. Correct?