A few points here. All portfolio margin accounts under 5 million will be PDT accounts. There is no way around this. That is a pretty big deal. I don't know any trader that is going to like the fact that he can't actively trade his account. Also, there is no cross margin for futures in the PM account. There is no interest paid on net credits or interest on short stock. Pretty big deal. Also, there are no margin calls in a JBO account. Hello margin call city for you PMers. LOL. In case some of you don't understand haircuts or PM, all PM is a forward margin discount. It converges with Reg T as expiration approaches. Let me explain. Say you put on a position with a 50k portfolio margin today and expiration is 4 weeks out. And let's say you have 100k in your account. Well, as you approach expiration, that margin is going to explode, as it does in a haircut account. By expiration week, you are going to get a margin call when that margin requirement is now 150k!!!!! what are you going to do? Roll? OK, maybe if it's advantageous to roll. and if it's not? See, that is what a lot of you guys are not understanding, the advantage to the JBO structure is the ability to get around margin! Not to just push it off. In a JBO you can hold positions over haircut. No margin calls. I was in NY for the expo and I talked to quite a few people about PM and I can tell you after everyone listened to the spiel, the interest was very lukewarm because of the restrictions. Not to mention the tax benefits to the JBO. The 60/40 tax benefit as well as K-1 treatment.
So are you actually telling all of us retail traders that unless we have 5 mil in equity we will not be able to use port margin and trade more than 4 times a week? This is absurd. You need to post your source when you make claims like these. According to the CBOE's official release the 5 mil req is eliminated come April 2.
Joint Back-Office. Section 220.7(c) of Regulation T authorizes the creation of JBO arrangements. These JBO arrangements permit "a creditor [to] effect or finance transactions of any of its owners if the creditor is a clearing and servicing broker or dealer owned jointly or individually by other creditors." 12 CFR 220.7(c). A JBO participant must be a registered broker/dealer subject to the Net Capital Rule. The JBO participant is required to: ⢠Maintain an ownership interest in the JBO broker pursuant to Regulation T of the Federal Reserve Board; and ⢠Maintain a minimum net liquidating equity of $1 million in the JBO account, exclusive of the JBO participantâs ownership interest in the JBO broker. There is a great deal more but these are not "retail" accounts. Jack
According to my phone call with TOS, they will provide portfolio margin to everyone. There is no capital requirement, and it will be offered in April. I believe it is up to your brokers to decide if they will offer PM. Call your brokers and they will tell you their plans.
No, incorrect. The 5 million minimum that is going away April 2nd is just for the account minimum. Not for the PDT exemption.
Perhaps, as they make no mention of PDT exemptions. You seem to be the only person privy to this information. If this turns out to be true, 99% of traders will see no benefit whatsoever. I highly doubt this is what the intentions are but i guess we will have to wait and see when it's official.
Well I attended the information session here in Chicago at the Union League Club. They made this very very clear. And yes, I see you are finally coming around to what I was saying from day one, that very few people will actually benefit from this.
Day Trading in a Portfolio Margin Account The day trading requirements under Rule 431 shall not apply to portfolio margin accounts that establish and maintain at least $5 million dollars in equity, provided the member organization has the ability to monitor the intra-day risk associated with day trading. Portfolio margin accounts that do not establish and maintain at least $5 million dollars in equity will be subject to the day trading restrictions under the Rule, provided the member organization has the ability to apply the applicable day trading requirements to a portfolio margin account. However, if the position or positions that are day traded are part of a hedge strategy, the day trading restrictions will not apply. http://www.securitiescep.com/Documents/00002459.htm