as of yesterday i was able to buy and sell more than 100 option contracts.
today i place an order to close out one of these positions and a 50 contract limitation is announced.
i have over 2000 contracts and a 50 contract limitation is not acceptable. please advise.
this 50 option contract trade typo-constraint prevents me from developing a system on here. please advise or i will have to close the system.
Eli - Give me a couple hours to work out an alternative for you. More shortly.
after reading some posts, i see a system blew up on a trade typo.
the system has limited my size before based on margin requirements, seems reasonable.
cash, float, margin are tools of the trade.
in real trading, if the resources are there, the trade happens.
my process could literally put the entire account in one trade.
i will upload the system description when i get a chance
please remove the quantity restriction until we can mutually agree upon a solution.
at this time, and according to my process, trading size limited to margin requirements is acceptable, 50 contracts is not.
I have raised the max trade size for options for a BTO to 500. For STO, the max is now 70.
I think that the Faith In Research incident justifies having hard limits like this. The real issue is that your model account is set at $1,000,000 equity value. The simplest solution is to rescale your model account to a lower multiple, perhaps even to 25% of its current value. This will allow you to pursue your strategy while fitting within the hard-size constraints now being imposed as a safety measure.
Do the limits apply to only options or futures/stocks as well?
There should be some limits imposed but I’m not convinced they should be hard numeric size limits. Why not just limit based on the account size and dollar value size of the trade compared with system equity (available equity)? Of course you’re in charge so you don’t need to convince me, but this will be a nightmare to maintain if systems run up their equity to large numbers and choose not to rescale.
Dave
I really would like to focus on making my system profitable.
I scaled at this size for very important trading reasons.
Rescaling or the Faith in research incident do not justify having hard limits like this on MY process. In fact, hard limits could actually blow my account up.
At times, I will seek out of the money options with very large contract sizes.
I provided a system description, and if you would like for me to elaborate on the process, I can.
Scaling will be outlined to subscribers.
Your hard work and efforts are understood and appreciated.
"Good intentions typically result in unintended consequences" - Jim Rogers
I think the fat-thumbs trade-size limits must stay. Wer’re all human, and mistakes can happen to you, too. I must keep quantity limits for order sizes.
Again, there is a perfectly easy workaround which you can use: Just rescale your system down to 1/2 or 1/4 of its current size, and all your stats and results will remain exactly the same, but you’ll be able to enter trades at a smaller quantity and get the same exact results. (And I should point out, that acceptable order quantities will still be quite large. It’s not as if I’m suggesting that you can only trade 1 and 2 lots!)
A) routine may not be a proper solution for infrequent and unpredictable problems
the problem with this is that, if i rescale down by 50-75% and now have 500 limit and imagine 1000 subs.
my process will put 100% of the account into 1 trade.
let’s imagine, I place an error order to buy 500 contracts where such a trade represents the entire account size. Because the order is inside limits, it will most likely go through…unnoticed. Then all the subs scaled at 100% or higher get executed and the accounts all blow fast with an immediate adverse move, plus time decay takes the trade to zero
a futures contract could even blow the account up hard given the symmetrical nature of the instrument.
No way out, stops are useless…accounts are all wasted…some real damage done.
Unlike “fat finger faith in research”, the size was so large it got NOTICED. This limit stuff will end up blowing more accounts up, all while we had the good intention of lowering risk.
REMOVE THE LIMITS, otherwise problem trades will go unnoticed.
easier to spot a 100,000 contract when it should have been 10,000
harder to spot 100 contract when it should have been 10 contract.
One will think much more about executing a 10,000 contract trade than a 10 contract trade and more likely to make an error there causing more FREQUENT blow ups. The opposite result where the goal was fewer.
I think the “fat finger mistakes” are too RARE and infrequent to justify a Routine solution. The incident is not frequent enough to warrant automation.
Does this make sense? Let me know your thoughts, so i can get back to making a profitable system. I had trading plans to go very heavy today in the system.
my current system moves 700x upward for every 35BP down on the SPY and increases exponentially at this time. rescaling certainly will not alter that, however, the limits are meaningless.
I mirror these trades with real cash in my private fund.
the scale and limits will not remove blow up factor.
B) if i rescale my system
down by 75%
down 90%,
the following limits will still hold in absolute terms?
BTO 500 contracts
STO 70
I would require a mirror STO to be (500 to match my buys to hedge or cover)
a (100,000 contract limit would be appropriate on BTO, STO)
furthermore, now the system has a non market restriction, unless we are trying to copy CFTC rules on sizes.
C) why not just kill the trades that go beyond margin?
E) How where my limits determined?
F) Are these the same limits for everyone in absolute terms?
G) The scale is very important to me, and I kindly request the limits removed.
Let me try to explain this a bit more simply.
You currently have a system with $1 million USD hypothetical account size. You are placing trades to trade options in units of 500 or 800 units.
If you scaled your system down to, say, $100,000 USD (i.e. 10% of current value) then you would want to place trades in unit sizes of 50 or 80… not 500 or 800.
This would comfortably fit within the sanity limits I imposed on trade sizes yesterday.
To rescale your system, simply press the blue ADMIN button above your chart and selecte RESCALE SYSTEM.
i do not "want" to trade 10% of the account in 50 or 80.
my process "wants" to be able to trade 100% of the account in one trade if i "want" to.
i "want" to be able to trade 50% 60% 80% of the account size when i "want" to.
that is my process to go heavy when i "want" to.
my process is speculation not investing, not "wanting" to trade 10% of the account size, 50-60-70-100% of the account.
please remove the limits, so I can operate this system.
please try to understand, a unpredictable problem is difficult to be answered with a routine.
What you are saying isn’t really sensible.
No one is going to trade your system using $1,000,000.
People will be trading your system at some arbitrary percentage that makes sense for them. So the baseline number you use to denominate your Model Account here on C2 is equally arbitrary. You chose to denominate your account at $1,000,000, but that isn’t a good choice due to the size limits C2 places on trades.
Now, let’s imagine that you rescale your system so that the Model Account size is $100,000 (what I recommend). Now, let’s further imagine that you actually find a trader who wants to trade your system in real life using $1,000,000. Well, that’s fine. He will set his “scaling preferences” to 10X your Model Account. Similarly, if you find a trader that wants to trade your system using only $10,000, then he will set his scaling preferences to 0.10x your Model Account.
In other words you Model Account size is completely arbitrary. So do everyone a favor and change the account size to a smaller number so that you can place trades that are within C2’s sanity checks. I won’t be removing the sanity checks, so try to work within them. There is no valid reason why you can’t.
I think perhaps this just may be a case where you’re new to C2 and a bit unfamiliar with what the Model Account means. It’s just an arbitrary account size that can be scaled up or down when a subscriber wants to follow/autotrade your system.
Matthew
my concern is the limits as a % of capital only.
my process "wants" to be able to buy and sell 100% of the capital immediately or not at all.
a limit to buy 500 contracts and only sell 70 makes it faster to buy up the tape and slower to sell the tape. what is the motivation here?
my process does not want to trade 10% of the capital.
if a sub only wants to risk 10% of their capital, then they open a broker account use 10% of THEIR capital, or scale as they desire, all subject to my system using 100% of it all at once as the process will.
You write: "my process ‘wants’ to be able to buy and sell 100% of the capital immediately or not at all."
And I agree with you.
Think about it like this:
If: you currently have $1,000,000 in your model account and are trading 100 contracts in order to use 100% of your capital…
Then: if you rescale your system to only have $100,000 in model account capital…
Then: trading 10 contracts instead of 100 will use 100% of your capital.
In other words no one is telling you not to use 100% of your capital. What I am telling you is to make your model account size smaller so that you can enter smaller numbers for the # of contracts in order to use 100% of your capital.
thank you for your response.
How are the limits determined?
What instruments do they apply to?
Who is subject to them? how?
Eli, do you trade options with real money? I don’t myself but I know doing 2000 contracts is just silly and it will never happen in the real world. Looking at your system page, your last paper trade was for the AMZN Jun11 185 call. Going to the CBOE site, that option did a grand total of 21 contracts today.
Dennis,
Yes i do options with real money. non subscribers see trades delayed by 7 days. there is nothing silly about trading 2000 contracts and absolutely happens, sometimes all at once, other times in segments.
activity can range drastically across the chain. there are several variables that go into selection of time, sensitivity, strike and size.
i tend to lean hard against the tape sometimes. i leaned hard against it these last 8 weeks. Sometimes i lean hard against the tape, and other times ride with it.
if you are interested in the my scaling, i have an online spread sheet where you enter the amount of capital and desired risk exposure and the scaling is calculated. ie. a $50,000 account willing to allocate 20% to this system would set a max trade size to 10% of mine.
The Amazon trade i believe was for about 20 contracts or 2000 shares, the aforementioned scale would have auto traded 2 contracts or approx 200 shares in that account.
the system description is pending review and i have some blogs available too.
make it a great day,
Eli
