1. Keep the bulk of your trading risk capital in a traditional bank savings account. (personal or a LLC/Inc you create especially for trading if you wish).
2. Only transfer from your traditional bank account enough money to trade the amount of contracts in your trading plan. Make sure you put enough in your trading broker account to cover margin and maintenance for fluctuations in P&L + a bit of extra cushion (say +10-25% more than you think you may need to trade your plan). This way you have minimal exposure with YOUR money. Keep the bulk of YOUR money in a much "safer" form (namely your traditional bank account). Consider these funds as your total trading capital available in your trading plan though because you have allocated them for such.
Only if/when you have losses that draw down your trading account below a predetermined threshold that you set, then just transfer more money.
3. Problem significantly solved and your broker risk significantly reduced. With the industry the way it is a broker's account is NOT a good place to park tons of capital. Just use the leverage to your advantage in this way. This is how I love leverage (the smart way). If the broker goes under or something else happens you don't loose a ton of cash! Also, I like to have 2-3 open broker trading accounts I could transfer money to for trading so as to not rely on just one for misc. reasons. Of course, I do NOT like or use leverage to load up the boat like most traders tend to stereotype it (that, of course, in that particular sense of the word "leverage", is obviously the dumb way that never ends well). There are two ways to look at the same word "leverage" IMO. One good and one bad.
In many instances, defining (or otherwise distinguishing the nuances) can be an important aspect to avoid confusion when communicating one's thoughts.
Hope this helps someone out there...
Last edited by birdoggg; January 8th, 2014 at 01:06 PM.
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When I originally posted the advisory, that is the information Mirus had provided me. They have since asked me to remove it. I can't speak on the status of their discussions with Rithmic at this time as I am not a party to them.