Our PM is basically TIMS with IB-cooked additions. TIMS do not provide offsetting for individual stocks. It is done for indices only. So, generally speaking it does not matter if your stock is long or short in a portfolio. Shorts sometimes bear more risks and it is a possible explanation of what you have seen.
6:1 margin for overnight stock positions at InteractiveBrokers
- Thread starter maos
- Start date
Sky,
No retail broker can give you relief by being short one stock and long another (assuming we are not talking about etfs or convertibles). What you are referring to is a historical relationship that theoretically will keep you hedged, and in most cases it probably will, but in the world of retail brokerage probably hedged and actually hedged are not the same. You would need to open an account with a prop firm to get leverage for such a trade.
No retail broker can give you relief by being short one stock and long another (assuming we are not talking about etfs or convertibles). What you are referring to is a historical relationship that theoretically will keep you hedged, and in most cases it probably will, but in the world of retail brokerage probably hedged and actually hedged are not the same. You would need to open an account with a prop firm to get leverage for such a trade.
Yes, regulations are regulations... well put. However on your website it says that people who are "hedged" can really benefit from portfolio margin... you would think "hedged" means in one instrument betting on it going one way while in another instrument betting on it going the other way... but I guess not
Either way 1:5.5 is probably good enough to sling retail
Either way 1:5.5 is probably good enough to sling retail
Excellent point by opt789 in that each firm that offers PM seems to go about it somewhat different. It appears they take the PM regulation and make it fit their own trading platform.
Reason being this is what Option Express says about PM.
"Day trading and portfolio margin
Portfolio margin accounts are designed to effectively manage risk in complex option strategies.
It is not permissible to engage in a strategy of day trading in a portfolio margin account.
Any portfolio margin account that is found to engage in a strategy of day trading will lose eligibility for portfolio margin. This will cause margin requirements to be calculated at Regulation T levels as of the day prior to the day trade activity. This may cause the account to be subject to day trade calls as well as margin calls. "
Most firms offering PM are Direct Access and many like(IB and OptionExpress) are offering PM but in a "dress down" version.
I guess the thought of daytrading with PM scares many firms.
If you read the thread more thoroughly, then you will find out that opt789 statement is incorrect and it was proven right here. It is not a voluntary "dressing down" but rather mandatory. Regulators will never allow risk based haircuts to become a portfolio margin because it is really scary indeed.
By the way, IB does allow daytrading on PM accounts.
By the way, IB does allow daytrading on PM accounts.
IDS is an idiot, always has been always will be. He is a child with virtually no experience whatsoever. Ask him to explain the mechanics of TIMS, he throws around the term all the time but doesn't even understand it. He is still arguing a completely irrelevant point. ThinkorSwim offers MUCH more lenient PM requirements than IB, always has. Arguing whether a retail firm will ever offer just TIMS minimums is pointless, and if you have the capacity to read you will see I never said as much. No firm, prop or retail, should just offer TIMS minimums. So the only question a trader should have is how to understand the margin mechanics of their individual broker.
Quote from opt789, âHow old are you exactly, how many years have you been a risk manager, how many hours have you spent working with managers at the OCC about their RBH file and how Haircut (PM) is calculated?â
So, you imply that risk based haircuts are portfolio margin. You changed your song after I pointed you here http://www.finra.org/web/groups/rul...ers/p018677.pdf
Another quote, âWhy does no one seem to know anything about PM? It is simple for stocks. First it is not "approximately" or "about" anything. It requires margin to cover a 15% move, so 100 divided by 15 gives you 6.666_ to 1 leverage.â
You imply that TIMS rules are PM rules again.
Quote from http://www.thinkorswim.com/tos/displayPage.tos?webpage=portfolioMargin âStocks and indices with high implied volatility, an individual position that is highly concentrated, or positions that have large vega or other risk will have their margin requirements increased.â
All the simplicity of ThinkorSwim PM ends right here. It directly opposes to what you said. You have a problem to argue in this discussion and offense is your last resort.
So, you imply that risk based haircuts are portfolio margin. You changed your song after I pointed you here http://www.finra.org/web/groups/rul...ers/p018677.pdf
Another quote, âWhy does no one seem to know anything about PM? It is simple for stocks. First it is not "approximately" or "about" anything. It requires margin to cover a 15% move, so 100 divided by 15 gives you 6.666_ to 1 leverage.â
You imply that TIMS rules are PM rules again.
Quote from http://www.thinkorswim.com/tos/displayPage.tos?webpage=portfolioMargin âStocks and indices with high implied volatility, an individual position that is highly concentrated, or positions that have large vega or other risk will have their margin requirements increased.â
All the simplicity of ThinkorSwim PM ends right here. It directly opposes to what you said. You have a problem to argue in this discussion and offense is your last resort.
Your inability to understand how to properly infer something is clearly not my problem; do you have any experience, do you have any real education? You have never addressed these issues. Retail portfolio margin is calculated EXACTLY as the RBH, there is nothing else. Minimum PM does equal the RBH on an individual basis. Then it is up to the brokerage firm, with regulatory approval, to decide what restrictions they want to add to the TIMS minimum. If you disagree with this then quote the information from the OCC's website.
Where did I ever say a brokerage's requirements are simple? I didn't. I said ThinkorSwim's requirements are less restrictive than IB's. By the way my ThinkorSwim commission rates and credit interest are much better than IB's too.
It's hilarious that you came back with that link. Read the pdf again. It states "A description of house margin requirements if they differ from the TIMS requirement." Do you know what the word "if" means? It says "if they differ."
Do you even have any idea why you are continuing this pointless discussion? You don't even know what you are arguing about or why. Is your pathetic need to feel correct that desperate? Why not try learning from people who know more than you, then you might be able to better yourself. A dead end job with low pay at a company that doesn't care about you is no way to go through life son.
Where did I ever say a brokerage's requirements are simple? I didn't. I said ThinkorSwim's requirements are less restrictive than IB's. By the way my ThinkorSwim commission rates and credit interest are much better than IB's too.
It's hilarious that you came back with that link. Read the pdf again. It states "A description of house margin requirements if they differ from the TIMS requirement." Do you know what the word "if" means? It says "if they differ."
Do you even have any idea why you are continuing this pointless discussion? You don't even know what you are arguing about or why. Is your pathetic need to feel correct that desperate? Why not try learning from people who know more than you, then you might be able to better yourself. A dead end job with low pay at a company that doesn't care about you is no way to go through life son.