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Earn2Trade - Orianna Foucault (Director of Support) - Ask Me Anything (AMA)


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Earn2Trade - Orianna Foucault (Director of Support) - Ask Me Anything (AMA)

 
 
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 Earn2Trade 
 
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bobwest View Post
And, I would add, what's the point of it? Obviously there has to be one, so what is being accomplished with it? It seems to be an extreme safeguard for the FCM, but apparently is not widely used, because it was described as a new option with Rithmic.

I would add the question, for anyone familiar with it, of whether other FCM's, using Rithmic or not, do something similar. In other words, is it industry standard practice?

Bob.

We use SMAC (and several FCM's do too) for a number of reasons:

- we allow for spread trading. It's the only Rithmic risk algo that allows for giving spread margin credit.
- SMAC is the only risk algorithm that allows a trader to trade any asset on the exchange without having to specifically allow it. We don't care what you trade, so rather than have to key in an approved list for every trader, SMAC is used to they can trade anything.
- exchange margin, smac is the only risk algo that automatically uses the maintenance margin. this means we don't have to keep the margin rates updated or key them in because the system does it automatically.

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Earn2Trade View Post
I tested it last night with other risk algo's too. I'm being told by the person that wrote the Rithmic software (for a 3x position):

"I don't think the algorithm matters, I would expect the same behavior if you use SMAC or Margin and Quantity Limits.

The Target and Stop are both free if you use Rithmic Server Side Brackets. I could be wrong, but I believe that Ninja chooses not to use Rithmic Server Side Brackets, which means if you are using Ninja then it would be 3x for the position + the first exit order is free and the other exit order (i.e. the stop) is not free so another 3x."


I'm going to test it again this morning and report back.

Deal breaker for those of us that use Ninja - can't trade multiple contracts with that large of a margin requirement.

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SawDr View Post
Deal breaker for those of us that use Ninja - can't trade multiple contracts with that large of a margin requirement.

Many of our users still use NinjaTrader. You can absolutely trade multiple contracts, just can't use a bracket with a target and stop if you're going to use your max available number of contracts. In addition, with this volatility, many traders are using a lot lower trade sizes.

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 bobwest 
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Earn2Trade View Post
Many of our users still use NinjaTrader. You can absolutely trade multiple contracts, just can't use a bracket with a target and stop if you're going to use your max available number of contracts. In addition, with this volatility, many traders are using a lot lower trade sizes.

Good points, but still, if a trader wants to have a stop and target entered automatically and then let the trade management be handled by those orders, it will crimp their style somewhat, because one of the sides of the OCO will require an extra 1X margin per contract, which could be a significant limitation in terms of the size available, depending on how the trader trades.

Bob.

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bobwest View Post
Good points, but still, if a trader wants to have a stop and target entered automatically and then let the trade management be handled by those orders, it will crimp their style somewhat, because one of the sides of the OCO will require an extra 1X margin per contract, which could be a significant limitation in terms of the size available, depending on how the trader trades.

Bob.

If they really need to max their margin, yes, that's true.

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After speaking with Rithmic and NTB while doing extensive testing, it appears that there is a current issue with the SMAC implementation we and some FCM's use that causes this issue. Rithmic stated they are going to check with those FCM's and see if they have any problems with addressing this issue and if there is no push back, they should be able to get it addressed very soon. I will keep everyone updated.

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NinjaTrader View Post
We tested as well, from our VP of Trading Operations:

I confirmed the risk settings we use only require 1x margin. I set the error account to $800 and was able to use a bracket on a 1 lot of ES ($500 margin). The risk algo Ryan uses specifically requires 2x margin because of the way it it is designed to manage spread symbols.

So what I will attest to is that at NinjaTrader Brokerage using Rithmic, you will have 1X margin.

Yes, this is correct. Even the guys at Rithmic who wrote the software did not expect it to be related to the Risk algo. I'm glad it's been figured out and Rithmic is working on trying to see if they can patch the issue.

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 matthew28 
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Earn2Trade View Post
If they really need to max their margin, yes, that's true.

They would only be maxing their margin because using ATM on Ninja with you currently requires $14,000 margin (using the NQ from your example). That means even somebody offered the full $25,000 deal could only trade a one lot as things currently stand. If I have read this correctly.

You do not win as a trader, you just get to play again the next day. If that game doesn’t appeal to you then you should not trade. Gary Norden
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matthew28 View Post
They would only be maxing their margin because using ATM on Ninja with you currently requires $14,000 margin (using the NQ from your example). That means even somebody offered the full $25,000 deal could only trade a one lot as things currently stand. If I have read this correctly.

Good news is, this doesn't matter anymore. Rithmic is fixing a bug in SMAC (the Rithmic risk algo we use) so that it won't use extra margin when NT trades it. If someone joins before they fix it and you only trade a handful of assets, please let our support know and we have a work around that Rithmic gave us that we can do for your account to fix it

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 Scalpingtrader 
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Earn2Trade View Post
Good news is, this doesn't matter anymore. Rithmic is fixing a bug in SMAC (the Rithmic risk algo we use) so that it won't use extra margin when NT trades it. If someone joins before they fix it and you only trade a handful of assets, please let our support know and we have a work around that Rithmic gave us that we can do for your account to fix it

Great news, glad that a solution came out of this discussion!

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