What prop firms offer the best overnight margin? Or even a retail firm? Is it possible to be 5:1 overnight?
I just read a news story that regulators could have the law passed in May that would change current margin requirements to risk-based margin requirements for retail accounts. I think this could be a big game changer for many traders. Anyone else agree?
There will be an account minimum. Currently it's in beta test with Fimat, but only for accounts $5 million or more. My guess is that number will come down to either 1 million or 500,000. No, I don't think it will affect anyone on ET. It's called portfolio margin and it's only available for indices.
It will not only be available for indices and the press release put out today (if you have DJ news read "Things to look out for this fall") does not indicate it would have a high minimun such as a $1mm. IB said that they are gearing up for the changes.
......The Securities and Exchange Commission is currently considering changes to decade-old rules that would allow brokers to take account of all related stock and option positions in a portfolio before determining margin requirements. Current rules often fail to consider the potential for options to lower risk - as in a put option that serves as insurance against a drop in a stock's value. Industry officials expect the regulator to approve the changes, filed by the Chicago Board Options Exchange and the New York Stock Exchange, imminently. The changes could free up a lot of capital that is currently locked up in margin requirements, said William Brodsky, chief executive of the CBOE who has championed the revision. "This is a sea-change in the way customers can manage money in their portfolios from the point of view of margins," he said. Brodsky illustrated by applying the new rules to a hypothetical investor who bought 500 shares of International Business Machines Corp. for $82.60, and also five IBM put options that give the investor the right to sell stock at $80. Under current rules, the investor has a margin requirement of $20,875 when making this investment. Under the proposed new rules, the requirement is $1,525, Brodsky said, because the put options protect against a decline in the stock. In a nutshell, this means that investors "will have much more freedom in terms of how they deploy the capital in their account without changing the risk profile in the account," Brodsky said. Some firms are already gearing up for the change. "We're working on it right now," said Steve Sanders, managing director for business development at Interactive Brokers Group LLC, though he notes the broker likely won't be able to apply the rules immediately after they are approved. ....... Don