Hi folks. I lurk here from time to time. It's been a long journey but sometime ago I finally qualified for portfolio margin (PM). In fact I have been using it for a while now and quite like it, the only issue is I haven't experienced any major drawdown using PM so all was good when it was good. Recently one of my stock had suffered a major drawdown which led to a major drawdown in my portfolio due to leverage. While major drawdown is not something new to me, Reg T rules were easy and straightforward, and I had navigated these incidents without much drama. I have around 8 positions so it wasn't like the position allocation over concentration issue was overblown. With this recent drawdown, I discovered a peculiar behaviour with PM. Because the majority of the loss (or perhaps assumed risk) lies with this one stock (stock A), I found myself unable to offload other stocks to reduce margin. Basically the platform shows that if I am going to unload some or all of stocks B, C, D etc, the expected initial and maintenance margin reduction are shown as zero. If I am going to reduce stock A (the one with drawdown), the margin reduction is also low compared to what it took up when I initiated the position. Basically, if I am to close all positions, it will only perhaps reduce around 10% of my initial and maintenance margin. Have anyone seen something like this? Is this even normal? I am struggling to find a good explanation but I suppose when PM methodology does a one day stress test and determine the margin for the day is X, but X is now much smaller since the big drawdown had already happened (ie. another 50% fall is now smaller in absolute terms than the initial 50% fall). A small X is broken down and allocated to different positions but only to the buy/sell decision of said positions for the day, not to the portfolio as it is standing. The margin for the portfolio as it is standing is large as X was different and quite large when the positions were initially initiated. This causes a big mismatch in margin control-ability from the perspective of the trader. Is this correct?
This sounds like this has nothing to do with the OCC TIMS calculation but that your broker/clearing firm put a risk add on to that symbol. They should be able to provide a breakdown. If you email, not a private message, your current portfolio I can run it on the OCC calculator and tell you what margin would be with us.