Short SVXY Put Margin Logic

dcwriter2 said:
If I sell one put at 20, the most I can lose is $2,000, right? The why is the margin required $6,500?
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Must be anticipating it breaking through strong support down at 0.00 and trading in the minuses!
 
Let's make we are have the terminology correct. Are you selling a put with a strike of 20 or are you receiving $2000 for selling a put premium?
 
dcwriter2 said:
If I sell one put at 20, the most I can lose is $2,000, right? The why is the margin required $6,500?
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If you sell (go short) the put, your losses are potentially unlimited. You probably - I hope - meant to say that you were buying the put.
 
IB evaluates your margin based on other positions (total portfolio) and how your total balance would be affected if SVXY dropped that much.
Though it may also be due to leveraged ETFs not being marginable. Check how much margin would it take for you to buy 100 shares of SVXY.
 
lindq said:
If you sell (go short) the put, your losses are potentially unlimited. You probably - I hope - meant to say that you were buying the put.
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Correct. I believe Goldman put a price target on SVXY at -$40. So if he is forced to buy SVXY at $20, he would lose approximately $6,000 (assuming SVXY is trading near -$40).
 
If you are short svxy it means you expect volatility increase and a lower price for svxy . At what point would you be be off long with an instrument where it goes higher when the volatility increases?
 
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