Stock Margin Increased
Margin Increased Scenarios:
Concentrated Position: When a single stock or ETF represents too high a proportion of a client's portfolio（e.g., exceeding 50%）, the system will automatically require additional margin.
Insufficient Liquidity: When the average daily trading volume of the underlying stock is low, a rapid liquidation of the client's may cause market price disruption, preventing timely clearance.
Proximity to Float Shares: If a client holds a significant portion of the outstanding shares, it could affect market liquidity and increase price volatility risk.
Example:
Client Example: Alex’s account has a net value of $100,000, and he purchases $80,000 worth of a single stock. The stock now represents 80% of his total portfolio. In this case, the system will automatically impose an additional margin requirement.
FAQs：
Q1: Why was my margin increased immediately after purchasing the stock?
A: When the market value of a single stock exceeds a certain proportion of your portfolio, the system will impose additional margin to prevent the inability to liquidate positions in case of market fluctuations.
Q2: How long will the margin increased last?
A: Once the stock’s market value proportion returns to a normal level, the system will automatically lift the margin requirement without the need for client intervention.
Naked Option Margin Increased
Margin Increased Scenarios:
Excessive Naked Option Positions: When a client has sold a large number of naked options, causing the nominal risk exposure to become too high, the system will require additional margin.
Example:
Client Example: Kevin’s account has a net value of $120,000, and he has sold 50 contracts of MSTR Call options. The initial margin requirement is $80,000. If the initial margin for naked options exceeds 60% of the Kevin’s net assets, the system will determine the position’s risk to be excessive and increase the margin requirement.
FAQs：
Q1: Why does high naked‑option concentration trigger a margin hike?
A: If the client is concentrated in options of the same underlying in the same direction, a sharp increase or decrease in the underlying price could lead to a margin shortfall.
Option Strategy (Near-Expiration) Margin Increased
Margin Increased Scenarios:
High Proportion of Short Position near Expiry: When the short leg of an options strategy represents too high a proportion of the total position and is approaching expiration, the system may require additional margin to mitigate the risk of unilateral assignment or exercise.
Example:
Client Example: Client Lee holds 10 SPY 0DTE vertical spreads that expire shortly. The long leg is out‑of‑the‑money (OTM); the short leg is ITM and equals 35 %+ of NLV. As expiry nears, the system increases the margin requirement to mitigate one‑sided assignment risk.
FAQs:
Q1: Why can a vertical spread require margin above the strike‑width (maximum theoretical loss)?
A: The “max‑loss = strike‑difference” formula assumes simultaneous exercise of both legs at expiration. If the long leg expires worthless while the short leg is assigned, actual loss can exceed the strike width. Raising margin before expiry protects against that scenario.