Haircut of Canadian treasury bills used as collateral

trade4succes said:
Interesting thread about cash maintenance, something I have been very unfamiliar with. Could someone check if I understood correctly (more or less, and I am assuming here futures options and options on stocks work the same)?

I have a Euro account at IB Ireland. Trading mostly US options on stocks. I also get (according to IB advertisement, haven't checked myself) some interest rate on uninvested instantly available cash. Is it correct I could also just buy approved T-bills (earning the T-bill return), which will reduce my univested cash, but hardly reduced available margin for option trades? And since I have a Euro account, maybe even buy (or have to buy?) Euro denominated German bills with the same result? Or maybe I am way off, also very possible :)
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I'm not sure what exactly your first question is - the last few pages in this thread were about T-bills.

If you read the thread, you will notice that I asked the exact same question about allowable collateral (other than cash) for EUR denominated futures. Let us know if you have an answer; you can just try it out, it will cost you a few Euros. I didn't get around trying it yet.

I noticed that in some of my accounts, the T-bills (or whatever other mechanism) have the effect that the futures (here: ICE futures) on exchanges that don't have FOPs, don't affect the margin debt that interest is charged; while in other accounts the maintenance margin of the ICE futures is deducted from the interest-bearing cash balance. I find it really hard to reverse-engineer the rules, and scary that IB is unable to state and to communicate their own rules.

I have a feeling that ICE futures reduce interest-bearing cash when total USD cash is positive, but don't make debit interest bearing negative cash balances more negative when the total USD cash is already negative. Why that so is, is beyond me - seems inconsistent. Both scenarios are under the assumption that there is enough other futures collateral (CME FOPs) for the maintenance margin of both the CME and the ICE futures in the account, of course.
I discovered a number of other bugs in IB's interest rate calcs; so I wouldn't be surprised if their calcs are unintendedly inconsistent. IB seems to be really struggling with some aspects of their systems. It's by far the best platform available for my needs though, so I guess I shouldn't complain.
 
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re cash - yes, idle cash earns interest if above the thresholds and of course varies by currency (it also varies on some entities where we are prohibited to provide direct interest but do our best to replicate the returns when possible. Correct on T-bills/bonds, I believe you can use 95% of the value as collateral on tbills, but would need to check on german bonds which are probably about the same.
 
def said:
re cash - yes, idle cash earns interest if above the thresholds and of course varies by currency (it also varies on some entities where we are prohibited to provide direct interest but do our best to replicate the returns when possible. Correct on T-bills/bonds, I believe you can use 95% of the value as collateral on tbills, but would need to check on german bonds which are probably about the same.
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I would really appreciate if you can check on German government bonds for futures collateral, def. Thanks in advance!
 
def said:
Currently we aren't offering offset on German Gov't bonds. It however, it is up for review. I'll let you know when I hear more (hopefully next week)
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Hi def, any news on EUR futures margin offset with government bonds (or other instruments)? Just asking because you mentioned "hopefully next week". Would be nice to hear progress in this area. Thanks!
 
tradegoodstocks said:
Hi def, any news on EUR futures margin offset with government bonds (or other instruments)? Just asking because you mentioned "hopefully next week". Would be nice to hear progress in this area. Thanks!
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I've been off the radar for a while and apologies for the lack of a reply. This was supposed to be put in place, but other priorities took precedence. I have now confirmed it will get a priority and implemented shortly (shouldn't be complicated but there were some external factors that kept this from being automated and a resolution has been discussed and is being worked on).
 
def said:
I've been off the radar for a while and apologies for the lack of a reply. This was supposed to be put in place, but other priorities took precedence. I have now confirmed it will get a priority and implemented shortly (shouldn't be complicated but there were some external factors that kept this from being automated and a resolution has been discussed and is being worked on).
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Thanks for the update, def!
 
Thanks @tradegoodstocks this discussion is extremely valuable. I have a huge cash drag from futures margin and I wish I had known before about alternative margin collateral. BTW which cash sweep option do you use? Sweep to securities will earn more interests? Thanks

@def with EUR being implemented, which other currencies/futures offer such an opportunity? I trade futures in USD, EUR, AUD, CAD and JPY
Thanks!
 
Def, is there any hope to be able to buy Canadian government bonds/bills via IB?

def said:
I've been off the radar for a while and apologies for the lack of a reply. This was supposed to be put in place, but other priorities took precedence. I have now confirmed it will get a priority and implemented shortly (shouldn't be complicated but there were some external factors that kept this from being automated and a resolution has been discussed and is being worked on).
More...
 
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