No taxpayer would ever use any option strategy to lend their securities. Only those who take mark to market accounting find the options of use via rev/con. Best David
Yes, tax deferral. Would you respond to those here whom are holding your product out to 2020? By what date do they have to get flat the 2020 SSFs?
Sec Lending is not a tax deferral issue. It is maintaining the original basis in appreciated assets. It is my intention to keep the exchange open into 2020. If that changes I will let you know. Best David
The NDR products are superior to any options combo that I've tried. Short synthetics don't have the same risk characteristics over the test range for portfolio margin for a pure delta hedge. Spread cost to roll is also an issue. I agree with David's argument that there is no equivalent option replacement.
Forget it. Anyway, if the screens go dark then I'd assume that there will be a problem closing the March 2020s?
The haircut on an SSF against physical is > than the conversion. I don't see any perpetual SSFs. I would think that it's prudent to produce a release on the site to inform participants of the product going offline.
So the market makers are leaving after December because of the margin requirements? I'm confused how this affects them. Do they hold them in futures account or not hedge with the underlier? The margin requirement for holding a hedged SSF in a securities account with portfolio margin is trivial.
If you were going to hedge a long position on a high yield stock (10-12%) such as NLY where all the call option's time value was less than the dividend, how would you do it then? The call leg is always going to get exercised.
The margin treatment is pretty favorable. It's one reason I was excited about the NDR products. I can't do the same leveraged dividend capture strategy using options effectively.
IB is my broker. Will there be there any way to get access to larger block trades (say 100-1000 contracts per trade) if things change? I have some people that want to use it with portfolio margin accounts, and I may be wrong but don't think the proposed changes will affect their ability to use covered SSF in such accounts, except that the product may not be available. Will it be available to professional traders with certain certifications?