Here it is. My margin did go up at the time but I just thought it was because CL spiked up. They also got my name completely wrong though it was for my IRA account.
Dear Mr. Randall,
Please be advised that your account XXXX-6219 has been flagged for review by our risk department as part of our concentration process. Your account is currently concentrated in a Crude Oil (NYMEX) position. In reviewing concentrations, futures and options on futures contracts are evaluated based on their trading volume, historic/implied volatility, and liquidity. We then stress test your portfolio and assess the impact of a price move on your account equity.
Being flagged for review implies having large positions that may currently represent significant losses to your account. It is important to remember that options are impacted by changes in both price and volatility and changes in volatility may be pronounced even when strike prices and expiration dates are still far out.
Due to your Concentration, your account, XXXX-6219, now has a Concentration Margin Call in the amount of $18,000 due Friday, 8/30/2013 by 11:00 am ET.
Going forward, should market conditions deteriorate or account equity erode, we may raise requirements on your positions, or may ask for additional funding. Please be mindful that, as stated in your margin agreement, we do reserve the right to take further action, including liquidation, should the level of exposure become a risk to OptionsXpress.
We are very happy to review these issues with you. Please feel free to contact us with any questions or concerns you may have by responding to this email or calling our trade desk at 888-280-6505.
turch, this part of the letter is what concerns me.
You said they were only 7 DTE. They forgot to program the software to look at DTE.
Next time I suggest that everyone make sure they talk to Pandy. Because common sense would say that 7 DTE is not "expiration dates are still far out".
I sincerely hope OX does not go over the edge like they did at FC Stone. I had an account there that was only using 16% to cover margin. They told me it was too risky and I had to trade out of positions. As usual I was far OTM. I closed that account and all other accounts at FC Stone.
Raven, if you don't mind, can you tell us what positions and quantity of each that you had to trigger the concentration additional margin?
I think they are well on the way to messing things up. When I tried to setup a corporate account with OX last month they messed me around for about 3 weeks before finally I spoke to several people who basically told me that you can't have a corporate account with OX for the purposes of investing. The guy told me, "if this was a landscape business then you could open it". Really .
Right now I've got the corporate account with DeCarley and the difference in customer service is night and day.
Here are the settlement prices for ESv3 puts for 9/16 with 32 DTE.
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Based on how the curve starts to flatten out more at 0.35, I have decided that is where I will now exit them instead of riding them to expiration. Price erosion slows down at that point. Will be better ROI%.
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The rates are based on volume and are competitive but not the cheapest thing out there. However, I'm getting actual SPAN rates not 10-30% above SPAN. Most importantly they want my business and have a knowledgeable person on the other side of the phone/email. I'm not talking to monkey #5 who knows nothing about trading or what I do. Somehow that is priceless.
Zaner360 which is a very nice platform considering there is no additional monthly fee. I only wish they had a mobile version.
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We don't really know the CME SPAN rate formula; however, it likely involves some component of the volatility pricing model. The S&P 500 displays attributes of a volatility smile: meaning that as prices climb volatility shrinks. There is a high degree of inverse correlation between the VIX and the S&P 500.