SEC Approves Extra Fees to Tame Wild Overnight Options Trading
Published Date: 4/9/2025
Notice
Summary
The Options Clearing Corporation (OCC) is adding a new margin charge to all clearing member accounts to help manage risks from fast, intraday, and overnight trading, especially with short-term options. This change affects all members who clear trades through OCC and aims to keep the market safer and more stable. The new charge will start soon after approval, impacting how much money members need to keep on hand.
Analyzed Economic Effects
6 provisions identified: 2 benefits, 3 costs, 1 mixed.
New Monthly Intraday Margin Add‑On
OCC will add a new monthly margin add-on called the Intraday Risk Charge that applies to all Clearing Member margin accounts to cover intraday and overnight trading risk. The charge is based on members' recent intraday activity and will change how much money members must keep on hand.
Single Midday Intraday Margin Call Window
OCC will monitor intraday risk and may issue a margin call at a single intraday collection time at or around 12:00 p.m. Central Time if a member breaches monitoring thresholds; margin calls outside that time require senior officer approval.
OCC Discretion To Adjust Charges Intramonth
OCC may increase or decrease a Clearing Member's Intraday Risk Charge intramonth if it determines margin resources are insufficient or if a member expands its business; decreases are limited to specific events like business reduction, account termination, position transfers, or protective measures.
How the Charge Is Calculated
The Intraday Risk Charge is generally calculated monthly as the average of daily peak intraday risk increases measured from 11:00 a.m. to 12:30 p.m. Central Time using 20‑minute snapshots over the prior calendar month (e.g., March 2025's charge would be based on February 2025 data).
Exclusion for Certain Cross‑Margin Accounts
The Intraday Risk Charge would apply to all products OCC clears but would not apply to cross‑margin accounts in OCC's cross‑margining program with the Chicago Mercantile Exchange because those accounts do not currently support intraday position feeds.
More Time To Prepare: September 2025 Start
OCC extended the implementation timeframe so the Intraday Risk Charge is slated for September 2025, and OCC must publicly announce the exact implementation date at least four weeks before it starts. Firms will have at least five months from approval to prepare and will receive at least four weeks' notice of the specific start date.
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