That is interesting and something I've never really thought about. Can you give an example of a position for which Reg T is better than PM?
I'd like to hear about that too. I'm not an expert on Reg-t. BTW, Apex Clearing has a policy that if Reg-t is better than PM , they will use Reg-t. One example might be a symbol deemed PM ineligible.
With a PM account you deal with day trading buying power with option prices. There is no leverage over capital as there is with day trading stock. So for example in a PM account you have $100,000. If you buy a $5 vertical in the SPX for 4.9 10x, where the prices of the individual options are 104.90 and 100. You then sell the spread out immediately for the same price. You have just day traded $204,900 worth of options and you will receive a day trading call (the day after the trade) of $104,900, due immediately. At least this is the way Apex treats this scenario. I actually was hit with several day trading calls before I figured out what was going on. I tend to day trade time spreads where the option prices are high, but the price of the spread is small. I have a Reg T account at TOS where I do these spreads. They are only concerned with the price of the spread, not the prices of the individual options.
Maybe rmorse can chime in and offer more perspective, but to me this looks like something specific to your broker and/or account. I don't trade options heavily now, but I have in the past, and I've never encountered such parsimonious PM calculations; I think that the trades you described -- even unhedged -- "should" only eat a small proportion of your buying power, like less than $20,000 for the first trade, and then even less than that (like below $10k) once the other half of the vertical is put on.
"If the securities subject to day trading are a part of a hedge strategy, then FINRA does not consider the collective transactions as day trades and therefore it would not subject the account holder to the day trading requirements. A hedge strategy for the purpose of FINRA rules means a transaction or series of transactions that reduce or offset a material portion of the risk in a portfolio. - See more at: http://www.finra.org/industry/portfolio-margin-faq#day" Apex has not built this into their DT calculation and would require a lot of work each day to wave the call. Either way, long options have a 100% margin requirement. Bob
If the spread is left on overnight, it will have almost no effect on buying power. The problem is with daytrading and it may be unique with Apex, not sure of that. At one time they would waive the pm call if they saw it was a hedged position. I once day traded a $1000 box with them 10x and was hit with a huge daytrading call. They ended up waiving it. Later I was told they would no longer waive these calls, even it is part of a spread. They showed me their intra-day pm calculations and sure enough whatever the value of any option, bought or sold, spread or not, came off my option buying power, and they give no leverage for this either. As rmorse said this could be a problem with their computer model, not sure.