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Here is the OCC’s PM calculator: https://www.theocc.com/Risk-Management/Portfolio-Margin-Calculator

I believe people confuse margin and cash. PM allows you to buy much more stock compared to regular margin. But if you buy more stock than the cash you have in your account, your cash will become negative. Which means that the broker gives you a loan. I never heard about interest free loans (well, unless Biden's loan forgiveness plan gets approved).

I traded T-Bills in TDA and with Portfolio Margin. If I buy $50,000 worth of T-Bills then my "Stock Buying Power" goes down by about $500, because it is low-risk asset, but my "cash and sweep vehicle" was decreased by $50,000 .

I've never done it so I have no direct knowledge. From the conversation, I go the impression that the cash and sweep vehicle could be negative, possibly identifying how much margin you are actually using. The problem with quantifying PM margin is that the actual margin applied to a trade is figured with a set formula, but the variables to said formula can change on how risky the broker feels about the underlying at that particular instant. This whole conversation has made me want to look into it sufficiently to understand it, kind of like balancing your check book, I've done it for over 50 years but I've never found a mistake by the bank, but I'm going to still do it.

This is going to be covered in the exit thread. But the general reason is profits don't accrue that fast. In fact, its entirely possible for the trade to be down after the dividend is paid (basically option makers aren't stupid). Take my MPW trade I did, where I sold the 5 call and bought the 5 put (MPW was about $9 at the time), and paid $5.41 for the trade and entered 5 days or so before it went ex-dividend. The dividend was $0.29 and I would get 4 of them over the life of the trade. After receiving the first dividend, the trade was down by MORE than $0.29. So if I closed, it would be for a loss. I have now received 2 dividends. My basis, not including interest, is now $4.83. The position mid-point says it's worth $5.36 -- if I could close for that I would. But I can't. I run a constant calculation of profit remaining vs current price -- and remember what I can get on other trades. If there's only a 10% gain left to be had out of the original 90% potential gain and six months left on the trade, we absolutely would exit and just enter another trade. But what if there's a potential 110% left to be had? Then we stay. That's where trade management comes in (I'm writing posts as fast as I can on this )

Since this new trade is dependent on Portfolio Margin, I thought I would mention one more thing about Thinkorswim/TDAmeritrade. Over the last 6 years I've had 5 margin calls, 3 from early assignment and 2 from PM requirements changing due to stock movement and increased risk from TDA's point of view. I've heard horror stories about other brokers liquidating assets (especially IB) and just doing a disservice to the trader because of a margin call, possibly to discourage that kind of behavior. TDA has a pretty laid back attitude about it. In each case, I called in before the market opened or within a few minutes and made them aware that I was aware. They just thanked me for taking care of it and in one case requested I get it done pretty quickly, otherwise their normal policy gives you a couple of days, IF they have heard from you and know you plan to handle it. That kind of customer service I can live with. And no, I don't work for TDA and am not receiving a kickback for the above statements. 😁