My broker offers portfolio margin. Any downsides to using this, besides the obvious potential for overleveraging? I am thinking possible change in tax status that I remember seeing somewhere (can't find anymore). Any input is appreciated.
Depends how you trade. Most of the time the $$ holds will be less, but in some positions/situations you would actually be better off with reg T. Downside is there is no real clear way to calculate the holds except for the +15%/-15%. Be careful - If you get called you will have 3 days to deposit the funds, as the broker is liable for any losses accured wheather you pay on time or not. Always remember that if your total portfolio drops below 100k you will immediatly be downgraded back to reg-T margin and they will want a lot of extra $$$$ asap! Btw im speaking for an OX account - Obviously it will vary from broker to broker.
I'm interested to know what positions would be better for reg T. I like to trade mostly option ratio spreads and (reverse) calendars, which would require less margin using portfolio margin. FWIW, I rarely come even close to using my available margin under reg T (never had a margin call), I am mostly interested in portfolio margin as a buffer in margin in case of an extreme move in the underlying. Thanks for the reply!