FAQs  >  Topic: Trading
Question:

What are the Slide-Risk parameters OptionsHouse enforces?


Answer:

OptionsHouse classifies client accounts as either “Diversified” or “Concentrated.” A Concentrated account is one that holds positions in less than six unique symbols. A Diversified account can hold either six or more unique symbols or positions in broad-based indices (or ETFs based on those indices).

For Concentrated Portfolios:

For portfolios with equity, equity option, narrow-based index, and narrow-based index option positions, we look at your slide risk down to -50% and slide risk on the upside to +20% as measured on the “Market Risk” tab of the “Risk Viewer” tool. A Risk Violation will occur if your account has slide risk greater than 100% of your Account Value. You may then be required to take action (such as reducing your positions or depositing funds).

For a portfolio with broad-based index and/or broad-based index option positions (e.g. SPX, SPY, RUT, OEX, QQQQ, DIA and other similar indices), we look at your slide risk down to -50% and slide risk on the upside to +20% as measured on the “Market Risk” tab of the “Risk Viewer” tool. A Risk Violation will occur if your account has slide risk greater than 200% of your Account Value. You may then be required to take action (such as reducing your positions or depositing funds).

For Diversified Portfolios:

OptionsHouse will look at your overall portfolios slide risk down to -50% and slide risk on the upside to +20% as measured on the “Market Risk” tab of the “Risk Viewer” tool. A Risk Violation will occur if your account has slide risk greater than 200% of your Account Value. You may then be required to take action (such as reducing your positions or depositing funds).

Finally, a Risk Violation will occur if your account has slide risk greater than 100% of your account value on any one symbol at any slide level down to -50% and any slide risk on the upside to +20%. You may then be required to take action (such as reducing your positions or depositing funds).


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