Is one's margin requirement identical for the same trades bought in 1 transaction vs 2?

L

Libranalysis

Newbie question:

Does one's margin requirement reflect the downside protection that's bought during a spread in a single transaction? I assume yes, and that the short and long sides of a vertical spread have built in loss protection and that therefore the margin requirement reflects that. I don't think I can leg out of a spread bought in a single transaction which means I can't increase my risk over what it was when i bought the spread.

However, what happens if someone makes the same trade in two different transactions? Would the margin requirement be higher or the same for the same trade? For example, if a broker looks at the two trades and sees a number of naked shorts without looking for related long trades that would mitigate any loss, then the maintenance req would be higher than if the two trades were seen to balance each other. I'm wondering if broker's do the former since I could create a ratio back-spread in two trades and leg out of each at different times: if someone sold the side of the trade that was capping the risk, the downside might substantially increase. So what do broker's normally do for calculating the maintenance requirement?:

  • Look at the account as a whole for any given time slice? Or,
  • Look at each trade individually and base the req on max risk?
 
The reason why I ask is that PM and futures margin is only calculated at EOD, while reg-t should be calculated during the day too. It is possible to get a Reg-T call from legging a spread. You have to have the equity necessary when they calculate time and tick, or margin at the time of the trade. If you sell first, you need the cash in the account for that time before you hedge. After that, you need the margin for the spread.

To answer directly:

  • Look at the account as a whole for any given time slice? (Not as a whole, the spreads get paired with an option optimizer)
  • Look at each trade individually and base the req on max risk? (No, as I said above, if you have many positions in one symbol, the clearing firm will pair them off as they choose, not as you pair them on, but not individually)
 
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