Is there any broker out there that will let you keep a 1000 share long in SPY and a 2 contract short emini S&P as a hedged position with zero margin to hold?
thanks
thanks
SPY. ES. Position margin
- Thread starter waterman33
- Start date
Robert Morse
Sponsor
Not to my knowledge as there is no cross margining. Why would you want to?
Not that I am aware of. Some brokers will you give a margin credit from small to large if for example you're long 1 NQ in your main account but short 1 NQ in your sub account or long NQ but short MNQ etc. But SPY isn't always trading when ES is, so you'd have to get some kind of special exception likely for the case you're bringing up.
As for why he would do it, ultimately he has to answer that of course, but some people will just counter hedge if they want to be long for example but something changes or they realized probability is market will likely go down some more first, as oppose to just closing the position or making a knee-jerk reversal they can add a hedge get some profit from that while also waiting for the market to get to a place they understand again, have an edge or are wanting to add to their long position.
As for why he would do it, ultimately he has to answer that of course, but some people will just counter hedge if they want to be long for example but something changes or they realized probability is market will likely go down some more first, as oppose to just closing the position or making a knee-jerk reversal they can add a hedge get some profit from that while also waiting for the market to get to a place they understand again, have an edge or are wanting to add to their long position.
thank you
What if the account holder qualifies for Portfolio Margin status? ( assuming the broker has both futures and Equity / ETF under one account)
Robert Morse
Sponsor
Universal Account give the "illusion" that there is one account. In reality, the Futures are regulated by the NFA/CFTC and the Equities are regulated by SEC/FINRA. NFA/CFTC rules require the future be held in a segregated futures account. The regulators on each side have not agreed to allow cross margining for customer accounts as of today. https://www.cftc.gov/IndustryOversight/Intermediaries/FCMs/fcmsegregationfunds.html
https://www.finra.org/rules-guidance/key-topics/portfolio-margin/faq
Futures positions are permitted to be included in the portfolio margin account for the purpose of determining the margin requirements of product groups. Would the customer still be expected to meet any futures margin requirement as determined by the futures exchange?
The margin requirement is calculated on the combined futures and securities position and could be lower than the margin required by the futures exchange. However, until segregation issues between the SEC and the CFTC are resolved, the ability to combine securities and futures products into a single portfolio margin account will be unavailable.
https://www.finra.org/rules-guidance/key-topics/portfolio-margin/faq
Futures positions are permitted to be included in the portfolio margin account for the purpose of determining the margin requirements of product groups. Would the customer still be expected to meet any futures margin requirement as determined by the futures exchange?
The margin requirement is calculated on the combined futures and securities position and could be lower than the margin required by the futures exchange. However, until segregation issues between the SEC and the CFTC are resolved, the ability to combine securities and futures products into a single portfolio margin account will be unavailable.