Margin on options arb/conversion

[Quanto]

I need real Stock symbols, real strikes, real expirations and expected size of each to run anything. I can't make up options. By the way, the other information is not relevant. If you provide a real life example, I will run it without the other stuff. E.G. +100 AAPL, + 2 AAPL Jan 19, 2024 puts etc....

What about the PMA margin req for this real stock, data just taken from YahooFinance:
Ticker: SAVE
LongStock: Price=15.95
ShortCall: Strike=15, ExpDate=2024-02-16 (DTE=37), Premium=5.35
LongPut: Strike=12.5, ExpDate=2024-02-16 (DTE=37), Premium=3.20

 

[Robert Morse]

PM value $75, House value $90

 

[Robert Morse]

BTW, I do not put in prices, the risk tool gets a live feed. The only input is what you see above.

 

[Quanto]

View attachment 331439

PM value $75, House value $90

Is that the total margin requirement for the collar?
How much would RegT margin req be for the same?

 

[Robert Morse]

Max loss based on $13.80 is $130. I do not make up the PM numbers. And, Reg-T margin depending on how your broker pairs off the trade will be higher. Reg-T is not risk based. My system estimates REG-T margin at $399. That might not match your broker. It could be more.

Is that the total margin requirement for the collar?
How much would RegT margin req be for the same?

 

[Quanto]

Robert, thx! It makes a big difference, indeed.
PMA looks very interesting, will need to read the fineprint...

Btw, that's the PnL chart of the said trade: https://optioncreator.com/stfqol4

 

[Robert Morse]

PM requires more money, higher financials, and more experience.
Further information can be found on these websites:
https://www.theocc.com/risk-management/customer-portfolio-margin
https://www.finra.org/rules-guidance/key-topics/portfolio-margin/faq

 

[destriero]

I'm going into guest mode but the 12.5/15 call spread is 1.25 here. Ppl are ppl. Bob, GL dealing with these idiots.

 

[Quanto]

PM requires more money, higher financials, and more experience.
Further information can be found on these websites:
https://www.theocc.com/risk-management/customer-portfolio-margin
https://www.finra.org/rules-guidance/key-topics/portfolio-margin/faq

Thx, just a final question regarding PMA margin req:
Is the computed margin req kind of constant (static) for that trade, or can it vary with passage of time?
Ie. is the procedure similar to ReqT which has 2 MRs: Initial MR and Maintenance MR ?

 

[Robert Morse]

The OCC only does this math after the close based on the closing prices. So yes, if the stock is $5 or $16, the requirement would change. Our Risk/margin system estimates EOD values. REG-T is static. PM is not.

Thx, just a final question regarding PMA margin req:
Is the computed margin req kind of constant (static) for that trade, or can it vary with passage of time?
Ie. is the procedure similar to ReqT which has 2 MRs: Initial MR and Maintenance MR ?