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For those of you who trade securities options the SEC approved rule 12.3
which, effective at once, provides limited marginability for options
over 270 days in life. I won't reprint the entire piece and your
individual broker does NOT have to reduce their requirements if they
chose not to ... but in brief the rules provide for options with a
life of over 9 months to provide a 25% release.
There are also new rules for
LONG TERM OTC OPTIONS, LONG(DEBIT)BUTTERFLIES, LONG(DEBIT)BOXES,
SHORT(CREDIT)BOXES, MARRIED PUTS, SYNTHETIC SHORTS, CONVERSIONS,
REVERSALS, and COLLAR trades.
There are also new escrow provisions for credit spreads.
I very much doubt the brokerage community will hurry to implement these
changes and there is absolutely no requirement that a particular house
use exchange margins .. most set their rates higher and I'm skeptical
many will rush to drop to the new rate.
There is also a serious challenge with the new rate .... a LEAP
provides loan value for margin purposes. The day it becomes less than 9
months the loan value goes away totally .. so the mere passage of time
could result in a margin call.
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