Earning interest income in cash with IB

Quote from Daal:

I believe investment grade bonds counts for IB buying power. C is bigger than AIG and LEH combined, now just as paulson delivers me a nice capital gain :p
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Not so sure about that... according to IB's website: "Bonds must be paid-in-full in a Cash account."

And most places that do allow bonds to be margined usually require the bond to be trading at 70% or higher than it's par value.
 
Here's another idea for current income. Take a look at LQD.....this is an ETF for Investment Grade Bonds. "No matter how gruesome the economy, no matter how troublesome the financial strain, the idea that an index of the most highly rated corporations will all fail to pay their bondholders is silly." Check out the yield...6.47%.
 
Quote from Daal:

according to this the maintance margin is 35%. The bond I bought is rated A according to fitch
http://www.interactivebrokers.com/en/trading/marginRequirements/margin.php?ib_entity=llc
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yep..it's all good on paper...35% my ass..
check this out(my screen shoot on page 4)-
http://www.elitetrader.com/vb/showthread.php?s=&threadid=141896&perpage=6&pagenumber=4

this account filled with investment grade bonds and i use to day trade on it with 1:4 margin,earning interest on bonds,while day trade on borrowed money(basically free).
take a really good look...
i agree-there is many bonds today with really great yields,secured,guarantied etc..but..this is my experience and as you can see-multiple problems from many different angles suddenly arise right out of nowhere and timing is perfect..2008 my best year in day trading ever, but i would make 2-3 more, if IB would let me borrow against those bonds.their "risk model" is f**d big time..btw-i still did not receive ANY respond from IB on ticket i mention on that thread. and i open another one on different account-same shit-no answer for 3 weeks..

btw-lehman was AA+ rated(goes down to D in less that 2 weeks,currently trading at 8 (!) cents on dollar)..
i'm not advising against the idea..once again-here is my experience with "safe investments vehicles".just make sure you prepared for something like this..
 
Quote from Daal:

I believe investment grade bonds counts for IB buying power. C is bigger than AIG and LEH combined, now just watch as paulson delivers me a nice capital gain :p
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Right on schedule, lets see if these bonds rally. The goverment pretty much made the bonds as good as treasuries, I'm not an expert on this but it seems that the government agreeing to take losses on C asset base makes the bond recovery in a bankruptcy huge
 
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