In addition to the standard portfolio margin requirement calculations (TIMS margin methodology), tastytrade enforces the following house rules/requirements. All rules and requirements are subject to change with no notice.
What is tastytrade's extra house requirements for PM accounts?
Extended Risk Slides for Indices & Product Groups
Margin requirements on equity based indices and product groups will be calculated by stressing at least -15%/+10% while in a low volatility environment and at -20%/+15% while in a high volatility environment. Low volatility is defined as the market trading below a VIX of 25 for 5 consecutive days (or a close below 20) and high volatility is defined as the market trading above a VIX of 25 for 5 consecutive days (or a close above 30). The current volatility environment/stress is subject to change without notice.
Extended Risk Slides for Individual Equities
Margin requirements on all individual equities will be calculated by stressing at least -20-%/+20%. These stress tests can be extended even further for specific underlyings.
Extended Risk Slides for Small-Cap Biotech Stocks
Margin requirements on all small-cap biotech equities will be calculated by stressing at least -50%/+100%. These stress tests can be extended even further for specific underlyings.
Alternative Minimum Requirement for Naked Options
An alternative minimum requirement will be calculated for each underlying by multiplying the number of uncovered short options by a variable percentage of the underlying deliverable value. While this variable percentage can change at any time and may be different for different underlyings, the default percentage is 50%. For example, if you were to sell-to-open 1 ABC call while ABC is trading at $500 and the variable percentage for ABC is 50%, the alternative minimum requirement for this ABC position would be $250 ($500 x 0.50).
Alternative Minimum Requirement Vega Test
An alternative minimum requirement will be calculated for each underlying by finding the worst case net vega and multiplying it by a variable factor. While this variable factor can change at any time and may be different for different underlyings, the default factor is 10.
Alternative Minimum Requirement Net Long Extrinsic Test
An alternative minimum requirement will be applied to each underlying by calculating the net long extrinsic value.
Extended Risk Slides Prior to Earnings
If a stock is scheduled to announce earnings (typically up to 3 days out), the stress tests used to calculate margin requirements will be extended by 50%. For example, if a stock’s normal stress test is -20%/+20%, it will be extended to -30%/+30% leading up to earnings and through the announcement date.
Cash Balance to Net Liq Ratio
Trades that will result in a cash balance (debit or credit) greater than or equal to 15x net liq will be rejected.