Charles Schwab Tightens 110% RIA Short Limits as It Debuts S&P 500 Prediction Product
Updated
Updated · RIABiz · Jun 23
Charles Schwab Tightens 110% RIA Short Limits as It Debuts S&P 500 Prediction Product
3 articles · Updated · RIABiz · Jun 23
Summary
Schwab told RIAs it will enforce new long/short borrowing caps, issuing margin calls if any account’s margin debit rises above 110% of short-sale credits; across all such accounts, the limit is 100%.
The tighter rules mark the latest retreat from Schwab’s earlier push into long/short SMA lending, which it had pitched as a profit and revenue driver before adding guardrails to curb balance-sheet risk.
At the same time, the firm is entering prediction-style trading with a product tied to S&P 500 outcomes, according to the Wall Street Journal, stopping short of sports or other event-based wagers.
That dual move highlights CEO Rick Wurster’s balancing act: preserving a responsible image while responding to rivals such as Robinhood, whose prediction business generated $147 million in quarterly revenue.