portfolio margin

[pam00312]

Hi,

My account is on portfolio margin, and holds mainly shares in different countries. On each share, the ratio of initial margin to value ranges from about 15% to 30%, as shown in the margin report.

I would like to reduce the portfolio margin so I can withdraw a certain amount of cash.

However, when I sold a significant amount of a certain share, the resulting portfolio margin doesn't change. I bought back the shares and also the margin didn't change. This is different to my expected margin impact on that particular share.

I understand the portfolio margin is calculated on a portfolio basis, but is there any general advice about the relationship between each shares and the portfolio margin?

 

[pozexis]

So, here's the deal with portfolio margin; it's a bit more complicated than traditional margin systems. Instead of just looking at each individual stock's margin, it takes the whole portfolio into account. This means it considers how different stocks in your portfolio are connected and how they influence the overall risk. If you have a diverse set of stocks that aren't closely related, your margin requirement might be lower. But, if your stocks are highly correlated, selling a bunch of one stock might not lead to a big margin reduction. It's not always a direct cause-and-effect thing. Your margin can change daily due to market conditions and the potential risk in your portfolio. If you're using options or other strategies to hedge your positions, that can also affect your margin. If you're ever puzzled by why your margin isn't behaving as expected, don't hesitate to chat with your broker's risk management department. They can help you figure it out and manage your account better.

 

[Robert Morse]

Unfortunately, that is not true. The OCC uses the TIMS method. Some broad based indexes provide offsets but there are no offsets for say AAPL vs MSFT. All Options vs that symbol are used to calculate max loss for the requirement of that symbol. Your broker can be more restrictive, but not less. They can't choose on their own to provide a margin offset.

Instead of just looking at each individual stock's margin, it takes the whole portfolio into account.

 

[M.W.]

It's the opposite, if you hold a lot of highly correlated stocks and sell some then your margin requirements should be more significantly reduced than selling uncorrelated shares. In fact, in some cases your margin requirements might even increase if you sell some stocks that are uncorrelated or negatively correlated because that sale increases your risk profile/exposure of the remaining portoflio

So, here's the deal with portfolio margin; it's a bit more complicated than traditional margin systems. Instead of just looking at each individual stock's margin, it takes the whole portfolio into account. This means it considers how different stocks in your portfolio are connected and how they influence the overall risk. If you have a diverse set of stocks that aren't closely related, your margin requirement might be lower. But, if your stocks are highly correlated, selling a bunch of one stock might not lead to a big margin reduction. It's not always a direct cause-and-effect thing. Your margin can change daily due to market conditions and the potential risk in your portfolio. If you're using options or other strategies to hedge your positions, that can also affect your margin. If you're ever puzzled by why your margin isn't behaving as expected, don't hesitate to chat with your broker's risk management department. They can help you figure it out and manage your account better.

 

[murray t turtle]

Unfortunately, that is not true. The OCC uses the TIMS method. Some broad based indexes provide offsets but there are no offsets for say AAPL vs MSFT. All Options vs that symbol are used to calculate max loss for the requirement of that symbol. Your broker can be more restrictive, but not less. They can't choose on their own to provide a margin offset.

%%
I would not call it an offset+ the bid\ ask is wide , like the management fee;
MSFD [MSFT bear x1] can work if its a good move I use other ETFs more , more liquid, more volume+ less risk than single stocks.
Since banks + brokers make plenty of money lending, fine for them .
But I want a certain cash position, regardless of money market % paid or any kind of interest paid.

 

[M.W.]

Curious how did you find ET in 2001 and what drove you to use this site?

%%
I would not call it an offset+ the bid\ ask is wide , like the management fee;
MSFD [MSFT bear x1] can work if its a good move I use other ETFs more , more liquid, more volume+ less risk than single stocks.
Since banks + brokers make plenty of money lending, fine for them .
But I want a certain cash position, regardless of money market % paid or any kind of interest paid.

 

[murray t turtle]

Curious how did you find ET in 2001 and what drove you to use this site?

%%
CERAINLY not from the 2001 Stock Traders Almanac;
mostly green + some red cover book=Master Daytrader book listed it \ by Oliver Velez.
Not a very helpful daytrade book but has some good multiday patterns+ better than XOM Valdez.

 

[Overnight]

%%
CERAINLY not from the 2001 Stock Traders Almanac;
mostly green + some red cover book=Master Daytrader book listed it \ by Oliver Velez.
Not a very helpful daytrade book but has some good multiday patterns+ better than XOM Valdez.

M.W. is shaking his/her head at you. You missed it.

 

[murray t turtle]

M.W. is shaking his/her head at you. You missed it.

%%
LOL. NO target shooter hits 100%.
I like j Cramer, but ''BAC going to hit $60 in a heartbeat'' NEVER happened.
W'ON, IBD founding father said ''get off margin in the latter stages of a bull market''
Of course if someone was very young\ could pay to take a lot of risk.
SPY below 200dma[bear]; QQQ much stronger........

 

[M.W.]

You and @zdreg seem to both have a constant desire to want to draw others into some sort of sandbox fight. Makes for good entertainment if it works but downside is that you give the impression that you have nothing of own value to add to anything. That's at least the impression I get about the both of you. Not seen an insightful market related comment from either of you in a long time...

M.W. is shaking his/her head at you. You missed it.