Short SVXY Put Margin Logic

If I sell one put at 20, the most I can lose is $2,000, right? The why is the margin required $6,500?

 

Must be anticipating it breaking through strong support down at 0.00 and trading in the minuses!

 

I know IB is tough on margins, but c'mon ...

 

Let's make we are have the terminology correct. Are you selling a put with a strike of 20 or are you receiving $2000 for selling a put premium?

 

If you sell (go short) the put, your losses are potentially unlimited. You probably - I hope - meant to say that you were buying the put.

 

IB evaluates your margin based on other positions (total portfolio) and how your total balance would be affected if SVXY dropped that much.
Though it may also be due to leveraged ETFs not being marginable. Check how much margin would it take for you to buy 100 shares of SVXY.

 

Correct. I believe Goldman put a price target on SVXY at -$40. So if he is forced to buy SVXY at $20, he would lose approximately $6,000 (assuming SVXY is trading near -$40).

 

Yeah, can’t wait for equities to start trading at negatives and buy em for credit!

 

If you are short svxy it means you expect volatility increase and a lower price for svxy . At what point would you be be off long with an instrument where it goes higher when the volatility increases?