Risk-less collars and margin

What should the margin be with portfolio margin? Should I be pleased with tying up 10 percent or so of the underlying? mean, really, what is the risk I need to post margin for? How can I blow up? What if I used ES/MES and SPAN?

 

What's a riskless collar?

 

XYZ bought at 10 and simultaneously selling a 10 call and using the premium for buying a 10 put, all the same expiration.

 

It's riskless, but you cannot make anything. Stress it in your front end.

Short call + put = synthetic long at $10-strike. Price should equal the forward to exp.
Long shares at 10.

Should be less than $70 under PM to carry the arb. There are no greeks (outside of some rho).

 

Note the delta position.

 

This is called a Conversion. The short side is called a Reversal.

I had so many more questions, but was hoping someone else would ask. Riskless collar? 10%? SPAN/PMA? I have never hear of a Riskless collar,

 

Nobody is going to give you edge on a 3-way so you will lose comms even if you fill the above prices.

 

Conv is long shares, but it's semantics.

 

His example was long stock, long put and short calls. Like we both said, that is the conversion.