Cheaper financing than IB's margin rates?

[Fxmove88]

IBKR Margin requirement for shorting the box <MAX (1.02 x cost to close, Long Call Strike - Short Call Strike)>.
Cost to close = Amount of the loan?
https://www.interactivebrokers.com/en/index.php?f=26660

Anyone ever tried selling ESTX50 Box?
I borrowed Euro3,000. on a demo account and got credited with Euro3,037. i.e. actually getting paid to borrow Euro.

Just like these folks
https://www.wsj.com/articles/with-negative-rates-homeowners-in-europe-are-paid-to-borrow-11616664600

 

[Fxmove88]

another story on liquidation of $500k Box spread for short of $2k intraday shortage, with respond from an IB rep pointing to Box spread's inherent interest rate risk. I assume in a declining interest rate environment.

https://www.elitetrader.com/et/threads/does-ib-take-responsibility-an-amazing-story.63810/

 

[tonyf]

another story on liquidation of $500k Box spread for short of $2k intraday shortage, with respond from an IB rep pointing to Box spread's inherent interest rate risk. I assume in a declining interest rate environment.

https://www.elitetrader.com/et/threads/does-ib-take-responsibility-an-amazing-story.63810/

well done for doing your homework...and sharing. The first is a key skill for success in my view so you are well set (assuming you are early in you investing career).

 

[destriero]

another story on liquidation of $500k Box spread for short of $2k intraday shortage, with respond from an IB rep pointing to Box spread's inherent interest rate risk. I assume in a declining interest rate environment.

https://www.elitetrader.com/et/threads/does-ib-take-responsibility-an-amazing-story.63810/

I had a liquidation from IBKR in a Box, but not due to rho. I had plenty of overhead. Think incompetence.

 

[Fxmove88]

well done for doing your homework...and sharing. The first is a key skill for success in my view so you are well set (assuming you are early in you investing career).

I am just trying to make ends meet. You seem to have a tidy account yourself . Mind sharing how you come up with that 8-figure account perhaps in another thread?
I am thankful to the people who spend time to educate new comers like me so I have been diligently googling key words and try to learn what they actually means.

 

[Fxmove88]

I had a liquidation from IBKR in a Box, but not due to rho. I had plenty of overhead. Think incompetence.

I assume incompetence from ibkr part? the people who programmed IB robot?

I have been perusing IBKR margin requirement and to be honest I don't quite comprehend them well. It depends on a person's residency, type of instruments, percentages of holding, even each exchange has different set of margin requirements.
https://www.interactivebrokers.co.u...ex=eu&rgt=0&rsk=1&pm=0&rst=121204040808080808
ESTX50 for example which is listed on DTB has its own sets of margin requirements

I wish I can see some easy numbers like Current Excess Liquidity and SMA to see if IB robot will liquidate my holdings, instead of running into several what if simulations on IB'srisk navigator.

 

[tonyf]

I am just trying to make ends meet. You seem to have a tidy account yourself . Mind sharing how you come up with that 8-figure account perhaps in another thread?
I am thankful to the people who spend time to educate new comers like me so I have been diligently googling key words and try to learn what they actually means.

The best advice I can give you is to sit for the CFA, all 3 levels, and work for someone you respect for a few years.

 

[destriero]

I assume incompetence from ibkr part? the people who programmed IB robot?

I have been perusing IBKR margin requirement and to be honest I don't quite comprehend them well. It depends on a person's residency, type of instruments, percentages of holding, even each exchange has different set of margin requirements.
https://www.interactivebrokers.co.u...ex=eu&rgt=0&rsk=1&pm=0&rst=121204040808080808
ESTX50 for example which is listed on DTB has its own sets of margin requirements

I wish I can see some easy numbers like Current Excess Liquidity and SMA to see if IB robot will liquidate my holdings, instead of running into several what if simulations on IB'srisk navigator.

It was during the Enron blowout (index Box, not SN) and I was on my honeymoon. I had small stuff on and it was a small % of net liq. Made no sense.

 

[tonyf]

another story on liquidation of $500k Box spread for short of $2k intraday shortage, with respond from an IB rep pointing to Box spread's inherent interest rate risk. I assume in a declining interest rate environment.

https://www.elitetrader.com/et/threads/does-ib-take-responsibility-an-amazing-story.63810/

Have you read the same response from trader when buying a box (long) instead with IB?

 

[Sig]

IBKR Margin requirement for shorting the box <MAX (1.02 x cost to close, Long Call Strike - Short Call Strike)>.
Cost to close = Amount of the loan?
https://www.interactivebrokers.com/en/index.php?f=26660

Anyone ever tried selling ESTX50 Box?
I borrowed Euro3,000. on a demo account and got credited with Euro3,037. i.e. actually getting paid to borrow Euro.

Just like these folks
https://www.wsj.com/articles/with-negative-rates-homeowners-in-europe-are-paid-to-borrow-11616664600

This is due to the Euro zone's current negative interest rate. Keep in mind IB charges you interest now to hold Euro (over $100k) and if you attempt to hedge the position to USD using futures you give back that same amount, so no free lunch.