PMA Accounts
Portfolio margin accounts (PMA) are about to become the newest innovation on the trading landscape. Recent rule changes have lead to developments in programs for portfolio margining of broad-based index options, corresponding exchange-traded funds and cross-margining of these securities with broad-based future products. These accounts are currently awaiting approval from the U.S. Securities and Exchange Commission. Once granted, sophisticated traders, small hedge funds and long-term investors with PMA accounts will receive risk based margin requirements.
PMA accounts are very similar to JBO accounts, and have two significant advantages:
- The investors’ capital is covered under SIPC and accounts are insured up to $1M.
- The regulatory burden associated with the JBO accounts is eliminated.
PMA accounts will only be offered to sophisticated investors that can demonstrate economic suitability and trading experience. Qualified individuals and groups will be able to take advantage of the extraordinary levels of leverage in margining that until now have been the privilege of only large trading firms.
DRO|WST has arranged with our partner Merrill Lynch to offer PMA accounts as soon as they receive regulatory approval. Return to this site or subscribe to the DRO|WST email service to keep updated with the PMA approval process and how it can work for you.