Prop Options Firms in London

I currently run a regional office in Chicago for a San Francisco based prop firm. Our firm specialises in derivatives, but we trade every product in the world.

What I would like to know is if there is an opportunity in London for a firm like ours. Keep in mind we are not a bucket shop type arcade looking for guys to come in scalp futures all day long to generate commissions. We focus more on longer term trading and risk management. I would particularly like to go after guys interested in trading US equity and index options as well as European equity and index options with risk based haircuts.

The idea is also to groom guys from within to help introduce them to capital and incubate hedge funds in house.

We would not be charging the outrageous 2k to 6k a month desk fees. But we also would expect you to come in with a minimal amount of capital.

Since I live in Chicago, I'm really not up to date on what the trading environment is in London right now. I would like to think we could fill a very special niche there in London. I would appreciate some feedback on what everyone thinks. Thanks.

Maverick,

From what I can gather, there are only a handful of independent options traders in London now as most of the trading in options is traded over the phone between the brokers and bigger options groups and then crossed up on the screen. Both Eurex and Liffe seem to facilitate this in the way they are set up, but I can't imagine it does much good for price transparency.

Maybe trading options from a longer view standpoint, as you mention, would make things easier. Do you generally just trade volatility or outrights ?

I'm a market neutral trader. I trade primarily volatility (both implied and spot) and soft deltas.

Well, we could bring electronic access to US equity and index options as well as access to European and Asian markets, both electronic and broker access.

I think what you are proposing could be a great idea, would you train options traders from scratch or do you look for people with some experience and capital ?

Well, to start, I would like to find guys that are currently trading options and want to take their trading to a higher level. The idea would be to take marginally profitable traders, get them to become more consistent and less volatile, give them risk based haircuts to extend their capital, then help them raise money.

The problem I have with training guys with zero experience trading or with zero options knowledge, is the learning curve is so steep and it takes a long time. Maybe a few years after an office is established with a good core group of traders, then we could afford to have a training program and bring guys in fresh. But that is not a good formula to use when you are starting a new office. You really need to hit the ground running. Especially with the high overhead costs associated with London.

Do you have a website for the prop trading offices that you represent in the US ?

Yes we do.

www.vtradergroup.com

Thanks Maverick, it all looks very professional !

The trading platforms that you offer seem to cater more for futures traders, which ones would you offer for the options ?