It seems to me that pm has a lower margin requirement than haircut. For example, pm is tested with -8/+6% price movement whereas haircut is tested with -10/10% for spx. Pm is tested with -10/+10% price movement for rut and ndx but haircut is tested with -15/+15%. Are there any reasons a JBO requires more margin than a retail pm account?
Percy, I have gone over this countless times on ET. Margin is determined by the exchanges. Then the BD can lighten or tighten those requirements. IB for example has actually tightened many of their PM requirements since they launched it. Most JBO's do not require anywhere near the PM requirements because JBO's will lend you capital. CPM's cannot loan you money. CPM's have margin calls, JBO's do not. JBO's cross margin, CPM's do not. CPM's are 1099, JBO's are K-1. I have said it before and I will say it again, I believe CPM does not even come close to offering what a JBO can. I do think that CPM is a significant improvement over Reg T however.