Quote from yip1997:
With the new margin rule, is it true that a brokerage firm cannot charge you margin interest the way it is now?
For example, I have 100K, and I buy stocks valued at 200K. Can they charge me interst based on the new rule? The brokerage firms might lose a lot of revenue if not. Time to short discount brokerage firms?
Quote from Don Bright:
Good idea, except for the fact that "your" brokerage firm will keep all your short stock interest, not a good thing, LOL.
One of the last great rip-offs in the securities business...our traders couldn't make any money if we didn't give them 5% or so short stock interest.
FWIW,
Don
One of the last great rip-offs in the securities business...our traders couldn't make any money if we didn't give them 5% or so short stock interest.
Quote from Maverick74:
There still seems to be some confusion about the new portfolio margin rules.
Here are the limitations to the portfolio margin account vs a JBO.
The portfolio margin is a pattern day trader account unless you have 5 million in your account. If you make more then 4 trades open and close in a 5 day period your account will be frozen.
In a JBO account there are no limitations to the frequency of your trading.
In a portfolio margin account, you are held to the current 4 to 1 daytrading margins you currently have.
For a JBO, your intra-day buying power is practically unlimited.
There is no cross margining in a portfolio account.
There is in a JBO.
You do not receive the preferential 60/40 tax treatment for equity options in a portfolio margin account like you do in a JBO.
In a JBO, you get a K-1. In a portfolio margin account you get a 1099.
In a portfolio margin account, you pay $37.50 per contract vs $25.00 per contract in a JBO.
At the current time, the only broker that has gone public with account minimums is Fimat USA. They require $150,000 to open a portfolio margin account.
I hope this clears up all the confusion.
Quote from Hooked2000:
Really, 5% short interest is the difference between making money and making zero or less?
Quote from domestic:
mav, early on you speculated that the requirement would be 1mm, then later to 500k, etc. i understand that this was not stated as fact at the time, just what you may have heard; but now one firm is at 150k.
is it possible in your above points regarding jbo vs. the final outcome concerning portfolio margining rules will also adjust as more info comes out as fact and not simply speculation? i understand that you are very concerned to the viability of your business; but even if you continue to get the actual key points incorrect, is it possible for your jbo to retain some advantage by still having one or two advantages over portfolio margining? if that were to be the case; what would be your killer app in your opinion if many advantages are lost? i am at a point now that my account size and desire to learn better option strategies is pointing me toward your type of operation. i just want to be sure of some key points.
Quote from yip1997:
Mav, how do you get these numbers? Since most ETers use IB, I think it is better to illustrate your numbers with IB commission.