Can anyone compete with IBs margin rates?

[manic]

Just sell an SPX box spread and get a 1.5% interest rate at any broker. There is no need to ever use a margin loan.

 

[nooby_mcnoob]

Just sell an SPX box spread and get a 1.5% interest rate at any broker. There is no need to ever use a margin loan.

This sounds like some wallstreetbets shit...

 

[Robert Morse]

nooby_mcnoob-Most clearing firms set up three accounts in the background for a margin account. Type1-CASH, Type 2-Margin, Type 3-short stock. In type 2, they place all cash, long stock, long options, and short options. As a general rule, as long as that account debit balance does not exceed your cash, you are not borrowing. By having a credit balance in options, it can offset the debit balance in long stock.

This sounds like some wallstreetbets shit...

 

[nooby_mcnoob]

nooby_mcnoob-Most clearing firms set up three accounts in the background for a margin account. Type1-CASH, Type 2-Margin, Type 3-short stock. In type 2, they place all cash, long stock, long options, and short options. As a general rule, as long as that account debit balance does not exceed your cash, you are not borrowing. By having a credit balance in options, it can offset the debit balance in long stock.

Interesting, thanks for the information!

 

[Sig]

This sounds like some wallstreetbets shit...

No, it's a completely legitimate way to borrow without paying any broker margin interest. You can also do the opposite to earn that same interest rate. It's really a bit sad that so few people seem to grasp the concept, incredible how much wasted money they're paying their broker in margin interest.

 

[Alexpung]

No, it's a completely legitimate way to borrow without paying any broker margin interest. You can also do the opposite to earn that same interest rate. It's really a bit sad that so few people seem to grasp the concept, incredible how much wasted money they're paying their broker in margin interest.

well if everyone is doing it broker may disallow such a trade. I picked up this idea in this forum two years ago, so I must thanks you guys.

 

[Sig]

well if everyone is doing it broker may disallow such a trade. I picked up this idea in this forum two years ago, so I must thanks you guys.

Good point, maybe we should stop talking about it

 

[vanzandt]

By the way, is a broker short rate same as margin on borrowing? Or rates are different? Thanks!

Did you really just ask that?
Short some Peleton and get back to us.

 

[Saltynuts]

Did you really just ask that?
Short some Peleton and get back to us.

Haha I did, seems that the answer is that the rate charged can depend on the underlying! Anyone know where I can find the particular IB page that talks about this? Not finding it immediately doing a google or IB search. Thanks!!!

 

[Saltynuts]

Haha I did, seems that the answer is that the rate charged can depend on the underlying! Anyone know where I can find the particular IB page that talks about this? Not finding it immediately doing a google or IB search. Thanks!!!

So, if I go into Toolbox in my IB platform, click on SLB Rates, it asks me for a ticker. I type in PTON (Peleton). It says the fee rate is like 61% and the rebate rate is like 59.75%. So is that an annual rate I'd have to pay to SHORT Peleton, or an annual rate I would received if I held Peleton and agreed to let someone short it? YIKES!!!