What's the Big Deal About Portfolio Margin?

Discussion in 'Options' started by Sbelmont, Sep 27, 2007.

  1. I've been hearing about PM for months now, but I can't find out much about what it really is or why I should give a #$@&!

    Has this change to PM really made a difference for anyone out there? And, at the risk of sounding foolish, what the heck is it? I've heard that it lets you trade more size. Is that true?
  2. MTE


  3. It all depends on how you trade. If you ever want to sell options naked, do reverse calendars, or try to gamma scalp effectively (to name a few things) then PM or trading at a prop firm would be the way to go. If you just buy options or do strategies where the Reg-T margin is reasonable then there may not be any benefit to you.
  4. archon


    The OCC is always a good source for margin info. You should also check out these pages to learn more about margin:

    CBOE PM Micro Site

    Let's Talk About Portfolio Margin

    Hope that is helpful. Good luck! Enjoy all of the newfound capital in your account!
  5. Thanks for all the info guys.

    I ran into a friend of mine the other day who recently received approval for PM in his account. He seems to enjoy the increased amount of leverage that it brings.

    PM seems to be a good thing or a bad thing, depending on the people involved. If you're a responsible trader, then it will allow you to diversify your positions and have more leverage to enhance your trades.

    If you are a crazy trader or some hedge fund nut, then you're probably going to get just enough rope to hang yourself with.

    In any event, I've applied for approval with my broker. Hopefully I'll get the nod. I'll let you all know about my progress.
  6. lc.junk