Riskarb, the spread at IB is definately the best in the retail space. But 280 just doesn't compete with a JBO where most spreads are 100 to 120 bp. Edit: We start at 120 bp but that is completely negotiable. We can go down as low as we have to make it attractive for large accounts.
Hey Mav, my brother said he was reading somewhere that this new PM stuff has even gotten looser. Since positions change so often, he heard that as long as "you're intending to keep positions hedged" will count. That sounds a bit extreme, but with regulators, you never know. You read anything definitive? Don
I can see how hedged accounts will benefit from portfolio margining. Is there much benefit for unhedged accounts, especially if they hold a lot of high-beta issues?
Mav, It looks to me like the spread is 1/2 % at IB for long/short over $3 mill . You'd need at least 900k in equity to do this, and quite a bit more for protection against liquidation. But what you are saying is there isn't anything in particular about PM accts that would cause them to not receive interest, right? I don't quite understand this from IB: "... Accordingly, to the extent you have long option and/ or margin equity securities that do not operate to offset your aggregate indebtedness and thereby reduce your margin requirement, you receive no benefit from carrying these positions in your portfolio margin account...."
The cash SPX options hedged with ES or equivalent Futures will not qualify for margin relief in PM accounts. Just one more reason to have both PM and JBO access to enjoy the benefits of cross margin benefits in ALL asset classes. Yes the regulators (exchanges) ARE PAIN IN THE ASS, but a LLC running a PM structure will be less regulated and can get away with some funky business if you do not know the group well. This will benefit the smaller funds and larger independent traders out there. Trade them up. If you are looking for a platform to measure risk and calculate the risk based margin that PM me and I can lead in the right direction. Most retail BD will have no clue how to measure and administrate this. Trade them up and respect risk as it will bit even harder at 15% requirements. Good luck.
Just the fact that you don't "have" to be hedged, just "intending" to be hedged. From what Bob says, something about being too hard to enforce any type of exact hedging due to options expiring and S&P adds, etc. We just use long short $$ for our guys, but that wouldn't work with derivatives of course. I'll try to find out more. Don
IB, I have upgraded my account to portfolio margin, use tws version 870.2 and when I use the check margin facility tws returns a calculation that must be using Reg T margin. Any plans to change this?
I tried to place an order but it was rejected as it is still using Reg T margin calculations. Anybody able to place a PM order with IB today?