Cheaper financing than IB's margin rates?

[Fxmove88]

It looks like selling a bigger amount ESTX50 box will save more on the margin capacity of an account. ie Big box is not linearly bigger in terms of margin requirement compared to a small box.

Is this a correct assumption?

 

[tradegoodstocks]

My Euro securities account does not accrued interest even though it is negative. I will wait for a month to see if I really get charged with Euro interest.

I have compared my account with my wife's which happens to have negative Euro balance since it has not been granted for Euro box trades. My wife's account gets Euro interest accrued on a daily basis.

I would like to see what will happen if the futures account gets more than Euro50k deposit. Will it get negative interest rate?

You are having a weird situation in the first place, as EURO Stoxx 50 (non-futures) index options got credited to your futures account, if what you are reporting is indeed correct. But please let us know if you get charged anyways. If not, I wouldn't apply your situation to any "normal" U.S. account. I did get charged interest in the securities segment.

 

[tradegoodstocks]

It looks like selling a bigger amount ESTX50 box will save more on the margin capacity of an account. ie Big box is not linearly bigger in terms of margin requirement compared to a small box.

Is this a correct assumption?

I made the same observation in a EU based account that I have access to. The margin requirements of the box are higher than in the U.S., and largely independent of the box size, i.e. the bigger the box the better for purposes of margin utilization. For U.S. accounts, the margin requirement is close to zero regardless of box size.

 

[Fxmove88]

You are having a weird situation in the first place, as EURO Stoxx 50 (non-futures) index options got credited to your futures account, if what you are reporting is indeed correct. But please let us know if you get charged anyways. If not, I wouldn't apply your situation to any "normal" U.S. account. I did get charged interest in the securities segment.

OESX Box is the one that I sold. OESX is an option on ESTX50. You would want the net balance between 0 and Euro50k if you trade at IBKR to avoid paying any interest expense. Where do you trade your box? Other brokers may not have the same conditions like IBKR.
Move your account to Interactive Brokers.

I am trying on another box: OSMI which should give CHF. I will try it on my paper account first. I wonder if it will also give negative interest.

 

[Fxmove88]

Selling bigger box vs smaller box, which one is better?

It seems that selling bigger box is better as it saves on margin requirement and option transaction fees. How about other aspects like the likelihood of the box being broken up by IBKR liquidation algo and option costs that we have to pay and we will receive.

 

[Sig]

Selling bigger box vs smaller box, which one is better?

It seems that selling bigger box is better as it saves on margin requirement and option transaction fees. How about other aspects like the likelihood of the box being broken up by IBKR liquidation algo and option costs that we have to pay and we will receive.

Bigger is better for the reasons you cited. You can trick The Algorithm by putting in a GTC order opposite your position that is so far out of market that it will never get hit (and if it did you'd have an instant profit from it) and it uses those as the best bid/ask as it's too stupid to realize the order came from you. Or better yet, use any broker besides IB because now that you figured out a way to get cheap margin there's no reason to put up with their horrible customer service and arbitrary The Algorithm that apparently runs the company with an iron fist.

 

[traider]

Bigger is better for the reasons you cited. You can trick The Algorithm by putting in a GTC order opposite your position that is so far out of market that it will never get hit (and if it did you'd have an instant profit from it) and it uses those as the best bid/ask as it's too stupid to realize the order came from you. Or better yet, use any broker besides IB because now that you figured out a way to get cheap margin there's no reason to put up with their horrible customer service and arbitrary The Algorithm that apparently runs the company with an iron fist.

How far out do you trade the box for best liquidity /fills?

 

[Sig]

How far out do you trade the box for best liquidity /fills?

I've stopped do it because I'm no longer using margin. I usually went out a couple months when I was doing it, but not sure of current market conditions.