Are there any brokerages that allow me to trade Tbills on margin?

N

nwoptions

Hi everyone. I'm interested in using margin to buy Tbills.

I'm located in Canada and the only broker that I can find on Google that allows this is Interactive Brokers.

TastyWorks doesn't allow Canadians as far as I know.

Are there any other brokers that allow Canadians to trade Tbills on margin?

Thanks
 
Thanks for the replies everyone. It looks like trading Tbills on margin won't work.

What about trading leveraged CFDs on Treasury Bill etfs like BIL?

Questrade offers up to 6 to 1 leverage. There are other brokers that offer 30:1 leverage.

Bil has a predictable daily price pattern. It typically goes up by 1 cent every day.
 
Last edited:
klattermusen said:
wouldnt the margin costs outweigh the interest made on the tbills?
More...

Please correct me if I'm wrong.

Let's say I want to buy a $100,000 1-month Tbill on margin.

IB Canada's margin interest rate is 5.8%

To calculate how much it will cost me to hold a 1 month Tbill, I simply do the following calculations

0.058 x $100,000 = $5800

I then divide this result by 360.

It will cost me $16.11 per day in margin interest.

I then multiply this number by 22, since there are typically 22 trading days in a month.

My gross cost (in interest) will be $354.44 to buy a 1 month $100,000 Treasury Bill using margin.

One the TBills I'm looking at is a $100 Tbill that is being sold at $98.3.

That's a 1.7% profit at maturity. I then multiple $1.7 x 1000 to see what my profit would be if the market value is $100,000, since I'm buying a $100,000 Tbill.

My gross profit for buying a 1 month $100,000 Tbill is $1700.

$1700 - $354.44 = $1345.56.

$1345.56 is my net profit after expenses.

My collateral is $1000. IB has 100:1 leverage. I can buy a $100,000 Tbill with only $1000 in collateral.

$1345.56 / $1000= 134% ROI.

Can you please tell me if I'm right or if I'm way off base?

Thanks
 
nwoptions said:
Please correct me if I'm wrong.

Let's say I want to buy a $100,000 1-month Tbill on margin.

IB Canada's margin interest rate is 5.8%

To calculate how much it will cost me to hold a 1 month Tbill, I simply do the following calculations

0.058 x $100,000 = $5800

I then divide this result by 360.

It will cost me $16.11 per day in margin interest.

I then multiply this number by 22, since there are typically 22 trading days in a month.

My gross cost (in interest) will be $354.44 to buy a 1 month $100,000 Treasury Bill using margin.

One the TBills I'm looking at is a $100 Tbill that is being sold at $98.3.

That's a 1.7% profit at maturity. I then multiple $1.7 x 1000 to see what my profit would be if the market value is $100,000, since I'm buying a $100,000 Tbill.

My gross profit for buying a 1 month $100,000 Tbill is $1700.

$1700 - $354.44 = $1345.56.

$1345.56 is my net profit after expenses.

My collateral is $1000. IB has 100:1 leverage. I can buy a $100,000 Tbill with only $1000 in collateral.

$1345.56 / $1000= 134% ROI.

Can you please tell me if I'm right or if I'm way off base?

Thanks
More...
Too many things are wrong.
IB interest rate is higher than that.
Interest rate calculation is wrong.
TBills return % is lower than that (for 1 month).
ROI calculation is wrong.

Bottom line, if something seems to good to be true, it probably is.
 
nwoptions said:
Please correct me if I'm wrong.

Let's say I want to buy a $100,000 1-month Tbill on margin.

IB Canada's margin interest rate is 5.8%

To calculate how much it will cost me to hold a 1 month Tbill, I simply do the following calculations

0.058 x $100,000 = $5800

I then divide this result by 360.

It will cost me $16.11 per day in margin interest.

I then multiply this number by 22, since there are typically 22 trading days in a month.

My gross cost (in interest) will be $354.44 to buy a 1 month $100,000 Treasury Bill using margin.

One the TBills I'm looking at is a $100 Tbill that is being sold at $98.3.

That's a 1.7% profit at maturity. I then multiple $1.7 x 1000 to see what my profit would be if the market value is $100,000, since I'm buying a $100,000 Tbill.

My gross profit for buying a 1 month $100,000 Tbill is $1700.

$1700 - $354.44 = $1345.56.

$1345.56 is my net profit after expenses.

My collateral is $1000. IB has 100:1 leverage. I can buy a $100,000 Tbill with only $1000 in collateral.

$1345.56 / $1000= 134% ROI.

Can you please tell me if I'm right or if I'm way off base?

Thanks
More...

you are buying any securities on margin, first you need to meet initial margin requirements. In another word, for 1000 bucks a margin account, assuming you buy equities, your buying power at best is 4000 bucks or less. You can buy 4000 worth of t bill, of that 3000 from the broker. 1.7x4=6.8, the best you can make.
 
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