Hello all - Happy New Year!!! I am an AMEX market maker with options, etf, and momentum trading experience that is looking for a reputable NYC trading firm. Although I have been trading on the floor, I am open to returning to screen based trading. If you could furnish me with contact info and a brief outline of the respective firm I would be appreciative. Also, if members reviewing the threads want to add constructive comments (i.e. opinions on the various firms) to the discussion those would be valued too. Thank you all in advance for sharing your time and your thoughts. The Knight
If you are looking for a reputable firm that is willing to let you trade options as well as stocks I would contact Lieber & Weisman (Gene Weisman is a frequent poster on these boards) First New York Securities, Schonfeld and ETG. I do not have specific contact info on those firms. Those are the high end firms. If you are looking just for leverage (buying power) and a low clearing rate, then look at Generic, Worldco, Bright and Andover. The latter firms are more like clearing houses than anything else. Some firms from the first group will actually take part of your risk. Good luck.
Schonfeld, Worldco, First New York Securities, ETG, are all proprietary firms, where you will be able to trade size without putting up cash. You will give up anywhere from 5%(Worldco) to 50%(Schonfeld) of your profits. Schonfeld probably has the worst deal structure, but offers the largest size (10-20K share posn's for proven traders). Bright, Echotrade, and Generic will all provide cheap rates, tech support and leverage to trade your own account. You will keep 100% of your profits. You should also make sure that the firm's culture fits your trading style. Most of these firms trade almost exclusively (85% or so) listed stocks.
I am a recruiter for Worldco and we do listed trading (pure intraday) with little to no capital contribution required. Our experienced traders all get payout's in 90's, and they do sizes as big as 10-20K shares. If you are interested please e-mail te_bai@hotmail.com with a brief summary of your trading experience and the type of deal you are looking for.
I'm in the opposite position of you I guess. I'm interested in joining up w/ an options market maker on the exchange floor or an off floor market maker. Can you throw out the names of some firms or give some advice on how to crack into this business? It seems like there are only a few spots available and a ton of applicants. As for day trading firms... Try: www.sonictrading.com www.hold.com www.tradescape.com www.hrld.com www.pointdirex.com These are firms that I called recently and as far as I know, they're still doing prop trading. Everybody wants experienced traders so I guess you're in luck.
Thank you all for the input. For Liltrader who wants to trade options, getting in is hard. Typically you take any job to get on the floor, work hard and hustle and a firm will eventually pick you up - almost all hiring for exchange based positions is internal and is based on contacts. Large firms that come to mind are: Wolverine, Susquehenna, Knight Trimark, Hull Trading, Botta. Smaller firms are: TANSTAAFL, Tahoe, Third Millenium, Optiver, Mako. Well that should be enough to get you going. Most of these firms have websites that you can check out and the larger ones recruit at various school campuses across the US. If hired they will bring you on as a clerk where you will be treated like a red headed stepchild. Training will take place once to twice per week and after about 18-24 months they will sponsor you for a badge. Pay typically is about $50K to begin for a clerk plus yearly bonus. Trader salary can range anywhere $80-200K plus bonus depending upon experience. Currently there isn't a lot to trade - if underlying volume is thin the option contact volume will be even worse. There have been a lot of layoffs over the past few months - firms that have prided themselves on providing workers with a job for life have been liquidating their personel to cut costs. It is a terrible environment to trade options professionally in and even tougher to find a job in. The general concensus is that things will pick up in the second quarter but we'll see... If you are still interested in becoming an option trader, purchase "Option Volatility and Pricing" by Sheldon Natenberg. The book is about $50 and it is considered the option traders bible - all firms will require that you have read and understood it - which will probably require you to read it at least three times. Good luck and thanks again to you all. The Knight
It is a terrible environment to trade options professionally in and even tougher to find a job in. No wonder. At the same time that prop firms are offering 10x and index futures volume is exploding, the options exchanges treat their costumer base like it's still 1974. Not to mention that a "good" commission rate is $2.00 a side for the privilege of giving up a dime edge on an option that has a delta of 25 shares.
Appreciate it. Yeah, I've heard the environment is pretty bad. I still don't understand why there isn't more options trading in the current environment. Wouldn't people try and hedge their portfolios w/ options during a war?
We need an options ECN to really shake things up. And a little marketing on the industry's part wouldn't hurt.
Like everything else in our industry, there's no such thing as a free lunch. Increased uncertainty in the economy is reflected in the price of the option through increased volatility. Since volatility is defined as the annualized one standard deviation percentage change in the price of an option, this uncertainity will be reflected through pumped up pricing of said options. Therefore I would not recommend purchasing at the money or even close to the money options, since their deltas are all going to approach 50. If you are trying to hedge your portfolio during a war select a longer term option that will have less volatility and consider ratioing your spread - eg sell 1 at the money put, buy 2 out of the money puts. If the market goes down the downside puts will gain volatility value (since they are becoming closer to at the money) and increased skew value (as equities go down, the public seeks to buy downside protection which due to supply and demand increases the price of the options). The worse case scenerio is if you get pinned at your short strike (if the option is 1/4 of a point in the money, the Option Clearing Corporation will automatically exercise the option, but if it is inside that range you can still be exercised on if the long party wants to and this is done randomly, so you don't know if you have been exercised on until Monday!!!) If the market rallies, you aren't hurt that badly because you have a small cash outlay or maybe even a credit profit. Sorry if I went on a bit...you were kind enough to share some information with me so I am trying to share my knowledge with you. As for an electronic ecn, there is an electronic option exchange called the ISE - "ice". The problem with it is liquidity - they will not trade size on their markets. Thanks again everyone. The Knight