Bye-bye reg T

From what I hear, SPAN on futs will be unaffected.

 

I'm not asking about SPAN on futures. Right now, if I am long the ZN and short TLT, I have to put up SPAN for ZN and 50% margin for TLT. But it's a hedge trade.

A simpler example would be to be long 1 ES and short 500 SPY. They are exactly the same and the margin required should be close to 0.

 

As per earlier posts, I believe there are legal and regulatory hurdles to work out between CFTC and SEC for this type of cross-margining to take place. It is allegedly being looked at though.

 

Gotcha, sorry. I haven't traded TLTs, but I see it's an SEC product.

 

That theory is nice
However price is still price
Still most wont make it

 

I think this would be the holy grail for retail investors. To be able to hedge ES with SPY or SPX options with low margin. Or even hedge ES with a basket of individual equities with XX% correlation to the S&P.

 

No way they will allow that. They are not doing these rule changes for hedge funds but more for mom and pop. Mom and pop don't pair trade.

 

No, that is a cross margin issue. You need to have a cross margined account for that.

 

That is available now to prop traders who have cross margin accounts. I doubt retail will ever allow that because it requires very active risk management.

 

Yes, certain prop will have an advantage there, but it's not a regulatory issue.

Hey Mav! MOM and POP are going PROP!