Discussion in 'Options' started by trading spaces, Sep 13, 2011.
Is portfolio margin more generous for option sellers than span margin?
Portfolio margin is for equities and option, span is for futures and option. That makes it hard to compare because futures are leveraged product while equities are not. In general, Span is more generous.
"The beauty of SPAN is that after calculating the worst-case daily move for one particular open position, it applies any excess margin value to other positions (new or existing) requiring margin. "
There are equity options and futures options on the same product eg spx and es. Also commodity ETF options and commodity options.
In the US, there is no cross margin unless you're a self clearing broker dealer. So, if your long ES and short SPY, there is NO margin offset. Also, futures accounts and equity/option accounts are separate. In a PM account, securities are in street name. Futures accounts are all segregated. Many retail accounts give the illusion they are together because there on one platform, but there not and have different margin requirements and have to be funded separately. I mention this because PM accounts require a minimum of $100k, if your futures account takes away cash, you can drop below and revert to Reg-t.
the pm allows me to do trades that i would never be able to do with span but let me just say that its probably not a good idea to max it out. if you are thinking of adding pm just backtest your trades over the past month and see how well or poorly you would have done.
just to add. consider options on futures as an alternative to a pm acct.
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