Portfolio margin

• 8 September 2009

• #1

Grinder

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I'm currently using Reg -T margin on all my trading and have no qualms about it. However, I have now become eligible for portfolio margin. So the question is do I use it or not?

For anyone using it now or have used it in the past, some opinions on the pros & cons would be greatly appreciated.

 

• 8 September 2009

• #2

cutz

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Hi mazza,

Can i assume with portfolio margining XJO options and SPI futures can be cross margined or does this only apply to the US markets ?

 

• 8 September 2009

• #3

mazzatelli

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Grinder,

Frees up capital => turnover of inventory > efficient.
Cross margining is a function of this e.g. SPX options can be offset against DIA options

The danger is taking on too much leverage than your account can handle
Too many short more strangles

IOW you should apply for it

Hi cutz,
As far as I'm aware, for what Grinder is referring to, it is for US derivatives.
You should ask IB. I just had a read that portfolio margining will depend on how ASX monitors it.

 

• 8 September 2009

• #4

Grinder

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thanks for the feedback mazza, it's pretty tempting Will most probably ease into it & initially trade as if i don't have it, however I can't seem to find anykind of modeller though to give me an idea of how much better the margining could get, will hunt around to see what I can find.

 

• 8 September 2009

• #5

wayneL

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Grinder said:

thanks for the feedback mazza, it's pretty tempting Will most probably ease into it & initially trade as if i don't have it, however I can't seem to find anykind of modeller though to give me an idea of how much better the margining could get, will hunt around to see what I can find.

Click to expand...

Portfolio margin is based on SPAN. It's pretty complex and obtuse, but you can buy PC-SPAN from CME for about $500.

Here's some stuff from CBOE on it http://www.cboe.com/aboutcboe/special/marginexamples.pdf

 

• 9 September 2009

• #6

Grinder

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I watched a couple of webcasts on the benefits of PM & like what I see. Thanks for the link Wayne, found a simmilar one below (margins on ICs using both sides instead of one side)

http://www.cboe.com/micro/margin/margin_req_examples.pdf

also found this modeller but it's not very useful

https://cpm.theocc.com/tims_online.htm

Do you think PC-SPAN is worth getting?

 

• 9 September 2009

• #7

wayneL

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Grinder said:

I watched a couple of webcasts on the benefits of PM & like what I see. Thanks for the link Wayne, found a simmilar one below (margins on ICs using both sides instead of one side)

http://www.cboe.com/micro/margin/margin_req_examples.pdf

also found this modeller but it's not very useful

https://cpm.theocc.com/tims_online.htm

Do you think PC-SPAN is worth getting?

Click to expand...

.

I haven't got it, but never push to the edges of my margin. Only necessary if you *NEED* to know where your exact margin is at.

I just make an educated guess.

 

• 9 September 2009

• #8

Grinder

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I've been doing alil of that guestimating with % moves & figure an otm IC on PM can be reduced to about a third of what Reg T would be, & if I chuck a bit more on the wings could even get it down further