Do I Need to Pay Margin Interests If I Offset the Excess Longs with Shorts?

C

Cyrix

Say my account size is $100k on Interactive Brokers.
I have purchased $200k of IBM, and shorted $100k of SPY.
Do I need to pay margin interests on the $100k borrowed for IBM?

What if I short $100k of SPX futures instead of SPY. In this case, do I need to pay the interests on IBM's margin?

Thanks.
 
This is the way it works.

Type 1 account- CASH (For Cash account)
Type 2 account-Margin (For long stock, long and short options)
Type 3 account-Short stock

Type 2 and type 3 do not offset. You will be borrowing $100,000 from your broker. You can offset short options with your long stock and long options.

Futures, no. ES options would not work, as they are in a futures account not you margin account. You could sell to open SPX/SPY options and offset the long stock for the purpose of your debit balance in your type 2 margin account.

Bob
 
In principle, you would also earn some interest on the credit balance in Type 3 from the short proceeds. In practice, with low interest rates and after deducting what costs might be involved to borrow the short shares, there's usually not a credit amount on the short side.
 
Also for the margins position, you need to have a balance before you could trade. If you have bought $200 K of IBM and already in a negative balance, I don’t think they would even allow you to open any further position
 
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