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High leverage on E-mini options?


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  #1 (permalink)
NGChina
frankfurt germany
 
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HI, I'm trading E mini S&P options and futures, and currently have a 6:1 (15%) margin requirement. Are there reliable brokers offering better margins for non-US qualified investors? Thx


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  #3 (permalink)
 
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 Fat Tails 
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I believe that you will be better off, if you keep your leverage below the current margin requirements.

The rules have been set up to protect greedy investors, not to harm them.


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  #4 (permalink)
 kevinkdog   is a Vendor
 
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NGChina View Post
HI, I'm trading E mini S&P options and futures, and currently have a 6:1 (15%) margin requirement. Are there reliable brokers offering better margins for non-US qualified investors? Thx

If you are talking about overnight, just ask if the broker uses SPAN minimum margins. You won't get lower than that for overnight holds.

As @Fat Tails said, though, leveraged is a double edged sword.


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  #5 (permalink)
NGChina
frankfurt germany
 
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Thanks.

The broker does use SPAN, plus a haircut, which they will not reveal, claiming it is proprietary.

The issue I face is that my strategy involves conditional orders which act as hedges. That is, they counteract short options positions when the strike price is breached. For example, I might have a covered call and a covered put in a long WTI short Brent pairs trade, when the WTI/Brent spread widens. If they both rise, I want to buy back my short call, but also the short put, and lay out another covered call and put, more or less extending my WTi bet at low or no cost.

I do this by laying out conditional orders, so that I do not have to monitor the market 24/7.

The problem is that all conditional and STP orders (which I also use for naked shorts) eat up margin, while not actually increasing risk. Were I a larger fund I could sit with the broker and rationalize their risk allocation vis-a-vis my strategy. Instead, I am looking for someone who is allowing me to take more risk, so I can in reality expand my hedging.


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  #6 (permalink)
itradeit
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Check out CMC Markets.

I trade 1:500 on DAX ;-)

It's NOT more risky. You simply trade fractional lots! You can trade 0,001 contracts if you want and scale up as you get more consistent.


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Last Updated on September 5, 2014


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