Risk of OCC's lien on long option position(s) and carrying broker-dealer's lien on all of long positions

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
Post Reply
Topic Author
sharukh
Posts: 634
Joined: Mon Jun 20, 2016 10:19 am

Risk of OCC's lien on long option position(s) and carrying broker-dealer's lien on all of long positions

Post by sharukh »

Hi,

This applies to only Portfolio margin accounts.

There is a lien on all the assets, even the fully paid ones, not just 140% of the margin loan like the RegT margin.

Source: https://www.finra.org/rules-guidance/notices/07-14

How much should one be worried of having a portfolio margin account ?
Is some broker(Ex: Fidelity VS E-Trade) better than other for portfolio margin account ?
OCC risk is common across brokers, so changing brokers doesnot remove OCC insolvency risk, applicable to only long options.
Broker-dealer's lien is on all all long Stocks and ETFs

Does this dissuade enough to not have Portfolio margin accounts ?

P.S. I am having synthetic long call options [Stock + put + margin] to get better tax treatment over straight up long calls.
This arrangement works only in Portfolio margin account.

Thank you.
Post Reply