Jan. 31, 2024
Salutations, I recently heard about the new proposed rule by the OCC entitled "Proposed Rule Change By The Options Clearing Corporation Concerning its Process for Adjusting Certain Parameters in its Proprietary System for Calculating Margin Requirements During Periods When the Products it Clears and the Markets it Serves Experiences High Volatility" As a US citizen, I do not support this proposal. I have several concerns and appreciate the opportunity to comment. Currently the astronomical size of the derivatives market scares me. Many analysts have different estimates, but all agree it is larger than the GDP of most countries. A large percentage of the derivatives market is options bought on margin. That is, options bought with money they don't have. Times of high volatility are when big things happen in our markets. When someone makes a speculative options bet with money they don't have, they undertake a lot of risk. To reduce the margin requirement during times of high volatility is to protect those who made these extremely risky bets. I believe that in a healthy market (volatile or not) risky bets shouldn't have special protection, and should allowed to succeed or fail naturally. Now we consider the fact that retail investors are rarely buying options on margin and that the practice is preferred by hedge funds, and the wealthy. I believe this proposal serves them and could even be detrimental to retail investors in the long run. I do not believe SR-OCC-2024-001 34-99393 supports healthy markets, and do not want to see it passed. Regards, Simon Didat, US Citizen