Feb. 7, 2024
Thanks for letting us weigh in on the whole SR-OCC-2024-001 thing, also known as “Proposed Rule Change by The Options Clearing Corporation on Tweaking How They Calculate Margin Requirements When Things Get Wildly Volatile.” Straight up, I’m not on board with this. Like, at all.First off, the transparency issue is real. The details on this are way too hush-hush, with too much stuff redacted, making it impossible for anyone to really dive in and understand what’s going on. That alone should be a dealbreaker.Then, there's how this plays out for the average Joe and Jane in the market. It feels like the game is rigged in favor of the big players, with the OCC bending the rules whenever they feel like it, reducing margin requirements for the big fish while the small fry are left dealing with the aftermath of market chaos. That’s just not cool.The logic they’re selling us on why this is necessary? That if one big player goes down, it could start a domino effect. So, they’re essentially saying some players are too big to fail. But shouldn’t everyone be playing by the same rules, especially when it comes to managing risk?This whole setup puts the OCC’s Financial Risk Management Officer in a weird spot. They’re supposed to protect the OCC, but this rule kind of nudges them towards saving big players from their own bad decisions, instead of ensuring everyone's playing it safe.And if we’re talking about protecting the OCC and the market, shouldn't the focus be on keeping enough margin in the vault to cover potential losses? This proposal seems to get it backward by making it easier for the big guys to risk more with less on the line.Considering all this, I think we need to hit pause and rethink. Let’s not make it easier for the market to become even more uneven. How about we encourage everyone, big and small, to manage their portfolios with an eye on stability, especially during those rollercoaster market moments?Just my two cents. Hope it helps steer things in a fairer direction