FINRA Adopts "Protected Options" Exception to Margin Requirements

FINRA adopted amendments to Rule 4210 ("Margin Requirements") to provide margin relief for specified index option positions, referred to as "protected options." The amendments go into effect on March 19, 2024.

According to the FINRA Notice, the relief is applicable, subject to conditions set out in amended Rule 4210, to short option positions or warrants on indexes that are offset by positions in an underlying stock basket, non-leveraged index mutual fund, or non-leveraged ETF that is based on the same index.