Bye-bye reg T
- Thread starter just21
- Start date
Quote from Maverick74:
I guess you are right. With risk based haircuts in a JBO, I can calculate my margin in seconds, very simple. This 18th century archaic method is a pain in the ass. I think traders are going to grow tired of it. I'll give IB credit for at least providing a calculator to calculate it.
So where are all these PM traders. For months the buildup to this was insane. I thought everyone on ET was going to have a PM account. Is Just21 the only guy out of 50k aliases on ET that has a PM account.
May I ask what JBO you are with? Speaking for options, not stock, no one can calculate their margins in seconds with regard to JBOs or Portfolio Margin.
The calculations are the same for both via the OCC, and because of the multitude of stochastic variables that are not know until after the close of trading it is impossible to do anything other than estimate your Haircut requirements with JBOs or Portfolio Margin.
The difference between the JBO and customer Portfolio Margin is simple as far as exchange minimums go: JBOs now have to cover more than customers, e.g.
in SPX, JBO=+10%, -10% ; PM= +6%, -8%
in NDX, JBO= +15%, -15% ; PM= +10%, -10%
Specific examples:
If you are short 25 SPX April 1360 Puts your JBO requirement is about $176k while your basic Portfolio Margin is $114k, a difference of (176-114)/114 = 54%.
If you are short 25 SPX April 1470 Calls your JBO requirement is about $263k while your basic Portfolio Margin is $121k, a difference of (263-121)/121 = 117%.
JBOs can offer many advantages that customers will never get, but the basic requirements are much more in the favor of Portfolio Margin.
There is an advantage to short premium in PM over JBO's. But you pay 50% more on any backspread positions in a PM over JBO's. Also, most brokers are putting restrictions on guys just selling juice. Fimat for example is limiting the amount of naked options you can sell as they should. Sorry, I don't sell naked juice and if I did that, I could do that with Span margin right now without opening a 100k PM account!!!!!
There are far more advantages to a JBO then margin. If you just want to sell naked puts you could have done that for years with Span. Why do that in a PM account?
I can calculate my margin in about 15 seconds. LOL. It's built into our software. I believe IB and Fimat use added metrics to calculate PM vs haircut. Yes, OCC has the same margin calculations for haircuts and PM but brokers do not! Each broker can and does add their own extra layer of risk management on top of that.
Fimat USA will apply its own risk guidelines and limits to all approved portfolio margined accounts. These guidelines and limits may be more stringent than what is available under portfolio margining rules. Fimat USA may also require additional margin beyond the risk-based margin requirements, particularly for positions with naked or uncovered calls or puts.
http://www.fimatpreferred.com/cf/Portmargin.cfm
At least you guys are making progress...still waiting to hear from ToS
