I am an active Day Trader. Sometimes I get into Day Trade Calls because I exceeded my Day Trade Buying Power. The Broker pairs positions together to lower the margin required in order to increase my Buying power. This gives me a false sense of buying power which I use however when I close 1 side of the paired position the remaining side can then balloon in the amount of margin requirement. Anyone who goes short and long (which will get paired at low margin requirement) and does calls and puts (which will get paired at low margin requirement) will understand what I am saying. Then when you close (un-pair) 1 side margin requirements can change dramatically (especially on the short and long pair). The bottom line is sometimes I get Day Trade Calls because of the Brokers pairing and un-pairing positions. 2 brokers have told me I should change my Account from the Standard Margin Account to what's called a Portfolio Margin Account. They said I would not get Day Trade Calls in a Portfolio Margin Account. They said in a Portfolio Margin Account the Margin requirements are aligned to the overall risk of the portfolio and not the individual positions. From my initial look at a Portfolio Margin Account it looked to me like I could Leverage my cash up to maybe 10X which is huge. I believe this is the highest level of Account you can have and is only done by experienced Professionals usually. For any of you who have not heard of this and just think it is a cash Account with margin - it is not. It is something totally different and in my 30 years of trading I never heard of it until just recently. I would like to have advice from others who have more experience with a Portfolio Margin Account before I change to that. What are the Pro's and Con's of a Portfolio Margin Account?
Pros and cons - greater leverage. The best thing you can do is get approved if you qualify and gradually - GRADUALLY - leverage up. Don't to max leverage right out of the box.
As far as I know, all you need is a balance above $110k & must remain above $100k. It allows you to use your cash more efficiently when you have long/short positions that make your overall exposure lower. Example of PM - pairs trade comparison https://www.interactivebrokers.com/en/index.php?f=24176