Portfolio margin

Discussion in 'Retail Brokers' started by DayTrader101, Dec 20, 2007.

  1. I'm really confused by how the portfolio margin works for equities.

    If I only trade equities, no futures or options, does the new portfolio margin increase my 4x intraday leverage ? and what about the 2x overnight leverage ? assuming my portfolio is composed of only equities

    Can someone enlighten me ?
  2. you will get roughly 6x overnight leverage without interest cost.
  3. getting 6x overnight without paying interest ?!!
    I think I am not getting this right, what I know is that I dont pay interest for the intraday leverage but anything overnight that is above my balance I would be paying interest for, am I missing something here ?
  4. Every brokerage firm can implement pm the way they want it. I don't think their clearing firms will charge them the interest cost, but they might charge you to increase their profit. There are no rules regarding how the brokerage firms implement pm. Call your brokerage firm to confirm.

    Who is your brokerage firm?
  5. I use many brokerage firms mostly IB, MBTrading and Genesis.

    But I'm still puzzled by how I would take positions overnight above my account balance and not paying interest regardless if its portfolio margin or not!
  6. Did you apply for pm for your account? If not, you are not trading under pm, and they will charge you interest too.

    I know IB offers pm, but I don't know if MBTrading and Genesis will offer pm.

    [edit] I am not an expert in pm. I just offer information that I know (or I believe). You should call your brokerage firms to find out.
  7. I didnt apply yet as I need to get a better idea about how it will benefit or be a drag on my trading style

    so what about the intraday leverage ?
  8. Portfolio margin is not supposed to give higher leverage to daytraders. If your brokerage firm finds out the daytrading patterns in your account, day trading rules (i.e. 4x) will apply instead. If they don't apply daytrading rule to your account, you should get 6x intraday.

    pm is new. It is not clear how each brokerage firm will implement it.
  9. DAV

    DAV ET Sponsor

    In the Trader Workstation's account window there is a "Try PM" button that will provide information about Portfolio Margin.
  10. Dav,
    I've tried the demo account of the PM, I entered 10 positions for different equities some long some short, there was increase in leverage but not much less than 5x

    am I missing something here ?

    and regarding the interest for overnight positions over the account balance do you confirm what Yip has mentioned that in PM account we don't pay interest ?!
    #10     Dec 20, 2007