m. Portfolio Margin Minimum Equity Requirement and Downgrade Process (US Options)
Portfolio Margin Minimum Equity Requirement And Downgrade Process Portfolio Margin Minimum Equity Requirement And Downgrade Process
Portfolio Margin accounts are required to fund with at least $275,000 to have Portfolio Margin activated and must maintain an account value in the securities account of at least $250,000 to keep Portfolio Margin active. If a Portfolio Margin account falls below the $250,000 requirement, it will trigger one of the following downgrade processes. Please keep in mind that only trading days are counted. Additionally, if an account starts the downgrade process above $200k but falls below $200k before it completes, the timeline will shift to the more restrictive timeline.
Above $200k
PM Account Closes Between $200,000 to $249,999.99
Day 0: The trading day where the securities account closes with an account value under $250k.
Day 1: You'll receive an email notification that the downgrade process has begun. The account has until the close of business on day 6 to bring the account value above $250k to avoid losing Portfolio Margin.
Day 6: A "risk-reducing trades only" restriction is applied, and the account has until the end of the day to close above $250k if they want to avoid losing Portfolio Margin.
Day 7: You'll receive an email notification that the PM removal process has begun. At this point, the downgrade can no longer be stopped regardless of whether you meet the minimum equity requirement.
Day 9: The downgrade process is complete, the "risk-reducing trades only" restriction is removed, and the account can resume trading as a Reg-T margin account.
Below $200K
PM Account Closes Below $200,000
Day 0: The trading day where the securities account closes with an account value under $250k.
Day 1: You'll receive an email notification that the downgrade process has begun and a "risk-reducing trades only" restriction is applied. The account has until the end of the day to close above $250k if they want to avoid losing Portfolio Margin.
Day 2: You'll receive an email notification that the PM removal process has begun. At this point, the downgrade can no longer be stopped regardless of whether you meet the minimum equity requirement.
Day 4: The downgrade process is complete, the "risk-reducing trades only" restriction is removed, and the account can resume trading as a Reg-T margin account.
Day Counting Example
How days are counted in a PM account for a potential downgrade
As an example, if a PM securities account fell below $250k as of the close of business on Monday (and there are no holidays involved), the day counting would work as follows:
Day 0: Monday
Day 1: Tuesday
Day 2: Wednesday
Day 3: Thursday
Day 4: Friday
Day 5: Next Monday
Day 6: Next Tuesday
Day 7: Next Wednesday
Day 8: Next Thursday
Day 9: Next Friday
