Full Review of TradeStation

4 stars based on 61 reviews

You hear an complete professional guide on futures and options trading over and over again as a trader, and it takes many different forms: So how do you put this advice into practice? It is a scenario-based algorithm which attempts to compute the maximum loss your account an complete professional guide on futures and options trading reasonably incur within one trading day.

The goal is twofold: You can find a lot more detail on the CME website. The CME and most other participating exchanges construct 16 scenarios, in which the prices of the individual markets are assumed to move up or down by varying amounts, while volatility is also assumed to go up or down. And what if you are holding positions in some closely-related contracts? For example, maybe you are long an ES futures contract and short an NQ.

Or perhaps you hold an iron condor spread on GC futures options. Or maybe you put on a CL futures calendar spread. Or maybe you wrote a naked put on EC currency futures far from the money. This is where it gets complicated. SPAN will try lots of different ways of grouping your holdings to compute charges and credits to your overall margin requirement. So if you add a new contract that truly hedges your existing positions, it will reduce the amount of margin you are required to hold. Exchanges and their clearing organizations must ensure that every trader holds enough margin to cover potential losses.

SPAN tries to achieve both of these goals. It consists of four individual contracts, and a naive risk system using quantity limits might charge you four times the margin of holding just one contract. If you want more functionality and are willing to an complete professional guide on futures and options trading more timeyou can also download the PC-SPAN app from CME and import parameter files for the exchanges you are trading. Using quotes currently in the market, its payoff diagram an complete professional guide on futures and options trading no early exercise or assignment looks like this:.

How much should we expect to need in margin to hold this position? In this case, SPAN is over 20x more capital efficient compared to a naive quantity limits algorithm. It can enable a trader to responsibly hold many contracts, provided they are properly hedged. Or a calendar spread in the WTI Crude market? Each spread has its own margin adjustment, and you can see for yourself what it looks like with the online SPAN tool.

I have never received a margin call, and if I make it through life without ever having a margin call that will be just fine by me. In none of those cases did the process sound fun.

Some brokers will liquidate your positions immediately and without consulting you as soon as a margin call occurs. Other more civilized brokers will contact you and involve you in the process of either posting more capital or making the necessary liquidations.

But it may not be a cheerful conversation. Best of all is to avoid the situation entirely. This ratio is computed by dividing your required margin by the current market value of your account. The reason is that a fast market move can quickly result in losses, and even if you have a statistical edge, you may find that temporary drawdowns can result in margin calls and become not-so-temporary. If you are trading in-and-out quickly, an complete professional guide on futures and options trading automated stop-loss orders and a global system cutoff, you might be OK with more than that, because your system can be designed to go flat before a margin call can occur.

And if you are trading defined-risk options spreads in which your max loss is well known in advance, then you can go much higher and still be safe. Every successful trader knows the importance of managing risk. I hope it helps you trade more successfully and sleep more peacefully.

There is a substantial risk of loss in futures trading. Past performance is not indicative of futures results. Optimus Futures is a leading online futures broker that caters to traders seeking fast execution and stable data feeds combined with aggressive margins and deep discount commissions.

Focus on Factors in Your Control. About Optimus Futures Optimus Futures is a leading online futures broker that caters to traders seeking fast execution and stable data feeds combined with aggressive margins and deep discount commissions.

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TradeStation was established in , under the name Omega Research. They were initially focused on developing trading strategy software, but today they operate as a broker catering for investors and traders of all types. In the 30 plus years since TradeStation has been formed they have built themselves a very strong reputation and are well known for their rich and highly functional platform.

They offer several powerful trading tools which are especially appealing to active and professional traders. There are very few broker services out there today that can offer as much in terms of trading features as TradeStation does. Not only do they cover an extensive list of products but they continue to improve what they offer their customers.

In this review of TradeStation, we have assessed everything they have to offer from the perspective of an options trader. Most traders will find some benefits in using TradeStation, but this broker is particularly well suited to active and experienced traders who can make the most of the powerful technology. The fees are reasonable even for low volume traders, but high volume traders will get the best value.

TradeStation offers two pricing plans for trading options: The flat fee trading plan is variable, and the costs depend on the number of trades made in a calendar month. The best value for your money here is definitely at the higher volume levels, but two separate trading plans along with reasonably competitive charges for low volume traders suggest that TradeStation is trying to appeal to everyone.

It takes some getting used to and there's a fairly steep learning curve, but the potential benefits can make the effort more than worthwhile.

The only real downside of the platform is that beginners may struggle to get the most out of it. This is somewhat mitigated by the fact that TradeStation offers home study courses and online video courses that will teach you how to use the platform effectively. This is called Option Station Pro and has a number of features that options traders will find very useful.

The advanced order entry technology makes it easy to trade even complex strategies with ease, while the Spreadmaster position management tool allows for the simple creation of customizable spreads. Orders are filled quickly and efficiently, and you have direct access to a wide range of exchanges. Direct routing is also available, allowing you to bypass the broker and trade directly with market makers. Other features include an excellent range of educational resources and an active community.

You can learn a lot just from reading through all the discussions in the forum, and even more if you get involved yourself. Virtually everything is customizable and you can build customized strategies and tracking indicators that will help you to implement your trading ideas with ease. The research and analysis features available are almost as impressive as the trading platform.

You can extensively evaluate almost any equity you choose, with data provided from several leading sources in real time. There are also effective market scanning and pattern recognition tools for monitoring activity and finding trading opportunities. The charting tools have an impressive depth of features and make technical analysis as straightforward as it can be.

They come with over indicators as standard and you can create your own to enhance your analysis capabilities. With so much advanced software available, good customer service is essential.

TradeStation doesn't disappoint in this respect, and they are quick to deal with any questions or concerns you may have. They even offer a free customization session to teach how you tailor everything to your own needs. Opening hours are This isn't particularly uncommon, but a lot of online brokers do now offer around the clock support. The features and tools available here compare to those available at large financial institutions and they can really help you to maximize your profitability.

You will need to put some work into getting the most out of them though. This is probably not the broker for you if your preference is to keep things as simple as possible, because the software really is very advanced.

Everything you need to learn to use the platform effectively is available to you, and although it will take some time it could be well worth the effort in the long run. Additional Services at TradeStation. Customer Service With so much advanced software available, good customer service is essential.