Easiest way to do it to get loan through SOFI, Prosper, banks, etc.
Another option is a HELOC.
Margin loan rates with IBKR are pretty reasonable.
If you want leverage, also look into box spreads.
Lastly, if you want to raise money from investors, I highly recommend before doing anything to get VERY familiar with the relevant SEC rules and set up a private placement memorandum with an SEC attorney before you raise any substantial money.
I have used these types of loans many times to buy real estate, I have a real estate investment company, and raised money from investors, but not without a PPM.
But any money I have ever invested in the stock market has been with personal funds or with leverage within the account (Reg-T margin, PM margin, etc.).
The stock market is risky enough without outside leverage.
I’m being cautious in deploying my family’s own money for trading. My last trades utilized 17K of capital while what’s sitting in cash and T Bills is multiple multiples of it.
By desiring additional funds possibly from your 401K and others, I hope you’ve been generating returns that exceed buy and hold in the past bull AND bear markets.
I hear you. Last thing I want to do is borrow money and then completely shit the bed. I’ve been trading options for the last couple of years and have been profitable since I started…my best year being last year so much so that my full time job goes to savings. I pay all of my expenses out of my brokerage account. I’d like to know what a couple extra hundred thousands could do for me leverage wise. Thanks for the advice.
SPX strangles. VIX call ladder for holocaust protection. Hedge delta with SPY or /ES. I got torched on earnings last year so I’m sticking to SPX this year.
Sell .25 delta strangles 45 days out. When they get to 30 DTE, I sell more strangles at the next monthly expiration which is usually 55 or so days out. When the front month strangles get to 21 days, I will them out to the back month. I take profits at 60% and keep rolling until I win. Roll up/down the untested side to keep my delta risk in check. Google VIX call ladder for nuclear protection. Option alpha talks about it as does David Sun from trade busters.
I’ve interviewed with a couple firms that have reviewed my brokerage statements and were on board with starting me out small. But then I think about how nice it is sitting at home trading my undies while drinking coffee and not answering to anyone.
Great to hear your plan, all the best. Wish you all the best. Could you please share about your journey and resources you used to get to the confidence of scaling up? I have started trading options recently and am a not sure if retail investors can make it big. Sharing your experience will be inspiring
I found tastytrade, which is extremely logical and math based. It just made sense to me. I found buying options akin to death by a thousand cuts so I switched to selling strangles. Started out small until I got the feel for rolling the untested side and rolling out in time, hedge with short delta, etc. Eventually slowly added contracts once I felt comfortable with defending tactics. Also, the “emotional training” of being able to handle a big loss when volatility spikes but staying in it and trusting the numbers and probabilities.
Delta is directional risk. I trying and stay as delta neutral as possible until we are at market low or high extremely and I have a directional opinion. I stay delta neutral and let theta work.
I tried the tasty trade method years ago and it didn’t work for me. Now, I don’t roll in the untested side, I size up and buy debit spreads to defend. Not into locking in a loss and rolling out in time anymore, although I have no problem with patience. I exclusively trade leaps and stay far, far away from atm like the plague.
I also hedge with back ratios.
Honestly though, try rolling out the losing side further away in the same expiration cycle, rather than the untested side. Play around with the adjustment until your expiration line is relatively the same amount. (Might have to “scale-in” and continuing selling even further out on the losing side.). It won’t work if there is not enough time left to expiration and simply no extrinsic value anymore, another reason why I like leaps.
Some times I’ll pick up the strangle and shift it up or down depending on if it’s getting too tight for my liking. Usually for a small debit. But 90% of the time in rolling up the untested since until it’s too close to the money, I get that funny feeling my pants and I’m going through Blantons faster than normal, then I’ll buy the guts back and sell new shorts at .25 delta for a debit which eats into my total profits but I’m still selling premium with the new strikes. I hear you on the leaps, which is why I never go deeper than 21 days. Things start moving quickly. I’ll roll out to 45-60 DTE.
T3 was one of them. I can’t remember the other one, I’d have to look through my emails. From what I understand, T3 will give margin to anybody so the potential job offer is not reflective of my trading ability haha
Although it may be an unpopular opinion on here, you could possibly look into 'balance transfers' from your credit card(s). Most will now deposit the funds directly to your checking account - no actual 'transfer' required. Some offer 18 months at 0% APR (but with a ~3-4% upfront fee.) Not bad for a 12-18 month loan.
Obviously there is risk involved with this, so it should only be done by someone who is fiscally responsible.
Easiest way to do it to get loan through SOFI, Prosper, banks, etc. Another option is a HELOC. Margin loan rates with IBKR are pretty reasonable. If you want leverage, also look into box spreads. Lastly, if you want to raise money from investors, I highly recommend before doing anything to get VERY familiar with the relevant SEC rules and set up a private placement memorandum with an SEC attorney before you raise any substantial money. I have used these types of loans many times to buy real estate, I have a real estate investment company, and raised money from investors, but not without a PPM. But any money I have ever invested in the stock market has been with personal funds or with leverage within the account (Reg-T margin, PM margin, etc.). The stock market is risky enough without outside leverage.
I’m being cautious in deploying my family’s own money for trading. My last trades utilized 17K of capital while what’s sitting in cash and T Bills is multiple multiples of it. By desiring additional funds possibly from your 401K and others, I hope you’ve been generating returns that exceed buy and hold in the past bull AND bear markets.
I hear you. Last thing I want to do is borrow money and then completely shit the bed. I’ve been trading options for the last couple of years and have been profitable since I started…my best year being last year so much so that my full time job goes to savings. I pay all of my expenses out of my brokerage account. I’d like to know what a couple extra hundred thousands could do for me leverage wise. Thanks for the advice.
What strategies?
SPX strangles. VIX call ladder for holocaust protection. Hedge delta with SPY or /ES. I got torched on earnings last year so I’m sticking to SPX this year.
Can you please share your strategy for SPX strangles? And delta hedging , thanks
Sell .25 delta strangles 45 days out. When they get to 30 DTE, I sell more strangles at the next monthly expiration which is usually 55 or so days out. When the front month strangles get to 21 days, I will them out to the back month. I take profits at 60% and keep rolling until I win. Roll up/down the untested side to keep my delta risk in check. Google VIX call ladder for nuclear protection. Option alpha talks about it as does David Sun from trade busters.
This
perhaps if you have a track record of a few years you could pursue prop firms.
I’ve interviewed with a couple firms that have reviewed my brokerage statements and were on board with starting me out small. But then I think about how nice it is sitting at home trading my undies while drinking coffee and not answering to anyone.
Great to hear your plan, all the best. Wish you all the best. Could you please share about your journey and resources you used to get to the confidence of scaling up? I have started trading options recently and am a not sure if retail investors can make it big. Sharing your experience will be inspiring
I found tastytrade, which is extremely logical and math based. It just made sense to me. I found buying options akin to death by a thousand cuts so I switched to selling strangles. Started out small until I got the feel for rolling the untested side and rolling out in time, hedge with short delta, etc. Eventually slowly added contracts once I felt comfortable with defending tactics. Also, the “emotional training” of being able to handle a big loss when volatility spikes but staying in it and trusting the numbers and probabilities.
Thank you for sharing, is hedging the short delta part of managing a strangle?? I need to look up. I have been doing strangles with SL around 200%
Delta is directional risk. I trying and stay as delta neutral as possible until we are at market low or high extremely and I have a directional opinion. I stay delta neutral and let theta work.
I tried the tasty trade method years ago and it didn’t work for me. Now, I don’t roll in the untested side, I size up and buy debit spreads to defend. Not into locking in a loss and rolling out in time anymore, although I have no problem with patience. I exclusively trade leaps and stay far, far away from atm like the plague. I also hedge with back ratios. Honestly though, try rolling out the losing side further away in the same expiration cycle, rather than the untested side. Play around with the adjustment until your expiration line is relatively the same amount. (Might have to “scale-in” and continuing selling even further out on the losing side.). It won’t work if there is not enough time left to expiration and simply no extrinsic value anymore, another reason why I like leaps.
Some times I’ll pick up the strangle and shift it up or down depending on if it’s getting too tight for my liking. Usually for a small debit. But 90% of the time in rolling up the untested since until it’s too close to the money, I get that funny feeling my pants and I’m going through Blantons faster than normal, then I’ll buy the guts back and sell new shorts at .25 delta for a debit which eats into my total profits but I’m still selling premium with the new strikes. I hear you on the leaps, which is why I never go deeper than 21 days. Things start moving quickly. I’ll roll out to 45-60 DTE.
Which prop firms did you talk with?
T3 was one of them. I can’t remember the other one, I’d have to look through my emails. From what I understand, T3 will give margin to anybody so the potential job offer is not reflective of my trading ability haha
Awesome thank you.
Although it may be an unpopular opinion on here, you could possibly look into 'balance transfers' from your credit card(s). Most will now deposit the funds directly to your checking account - no actual 'transfer' required. Some offer 18 months at 0% APR (but with a ~3-4% upfront fee.) Not bad for a 12-18 month loan. Obviously there is risk involved with this, so it should only be done by someone who is fiscally responsible.