And people had trouble understanding the PDT rule when it first appeared. This rule (Portfolio Margin) wow. This PM rule has many variations depending how ones structures their portfolio. Its possible to fall below REG T . NEW RULE: Have over $100k on deposit get 6:1 all day, every day and overnight.
It is absolutely unacceptable if you think about it. You put everything in a crappy stock and you are toast at some gloomy day. The worst part is you will take your broker down too. It means loss for all clients. PM is not simple for a reason.
ids, If I have say, 100 stocks with 1000 shares each (unhedged and no futures/options) in my account, am I able to obtain more overnight leverage with portfolio margin?
ALL SEC RULES have had nothing but a negative effect for the small trader. I don't "get it"...why should there be a minimum for portfolio margining ?
I trade a pairs trading strategy in S&P stocks hedged against the S&P sector trackers. Under the PM rule will I get paid interest on the cash generated by the shorts?
This portfolio margin rule should be say 5:1 for any trader depositing 100k or more. The broker could use a higher risk management account for this investor. And the broker would increase their profits by more commish: thereby providing this investor with more capital to trade with. A win/win for both parties involved. The 100k shows that: The trader can lose a lot of money before the brokers money is really lost. Also, the 100k (similar to hedge fund investor requirements rule) shows this person is professional/sophisticated and is more responsible with handling this additional leverage. The broker Think or swim is also considering this portfolio margin change.
As long as your broker offers interest on your shorts you should. PM rules would have no effect on whether you get short interest or not.
How does one confirm that portfolio margin is "enabled"? Supposedly, it's been approved but I don't see any difference. What am I missing to get this going?
In AM, if you go into Trading Permissions, it will say.... If you just got the email today, it probably won't go into effect until tonight. Once it's in effect, in TWS, go to Vuew > Account and RegTMargin/RegTEquity/SMA should be blank. Hopefully, your Initial Margin will also be lower than under Reg T and Excess Liquidity, Available Funds higher.