Jan. 29, 2024
This is my comment on proposal SR-OCC-2024-001 34-99393 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 Experience High Volatility” (PDF, Federal Register). As many other retail investors, I am genuinely befuddled by the many ways in which the stock and options market does not align with the interest of the small, individual investor, who painstakingly has to do their own due diligence without any of the tools or resources that big hedge funds have. This rule protects the interest of *over-leveraged* and naked players in the market, while letting down those who, having noticed these positions, have placed their own on the opposite side. High volatility is not a bug in the market, it is a feature. High volatility also does not come out of the blue. There are always factors that bring it upon us. Factors like inflation, a global pandemic, or a massively shorted company. These are natural events of the market, and we have seen that the market is perfectly able to cope with such high volatility events. Instead of bailing out big players that, due to their own negligence, have put themselves in a suicidal position, we should instead place our efforts into preventing this from ever happening. This rule encourages this risky, all-in behaviour. Therefore, I do not support this rule in any capacity, and it ought to be rejected. On another note, it is a shame that this proposal has to be redacted almost in its entirety. Individual investors, any investor, has the right to know the rules of the game they play. You will find many like me who think alike and perhaps have even more thoughtful and well-researched things to say. But as for me, I do NOT support the approval of this rule. Jacob Sánchez.