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Portfolio Margin
Portfolio Margin
For example, if a position in the portfolio is netting a positive return, it could offset the
liability of a losing position in the same portfolio. This would reduce the overall margin
requirement that is necessary for holding a losing derivatives position.
KEY TAKEAWAYS
Portfolio margin requirements have only been recently instituted in the options market,
although futures traders have enjoyed this system since 1988. The Chicago Board of
Options Exchange (CBOE) imposes rules on margin accounts. In 2007, it introduced
expanded margining requirements to more closely align portfolio margin amounts with
the riskiness of a customer’s entire portfolio.