HSA options for active trade

thebiggestelephant

thebiggestelephant

I currently use a Lively HSA with TD Ameritrade. For my IRA's, I use a few fairly low risk TAA algorithms that trade once a day. However, this account and all others that I have seen are cash accounts. TAA is impractical in a cash account because the T+1 settlement kills re-allocations over 4% or so. It is possible to hold more cash to buffer turnover, but this would likely reduce the performance below my buy-and-hold portfolio that I rebalance monthly.

Are there any HSA plans compatible with margin accounts? I would obviously expect that you could not borrow against liq, just like you can't in an IRA.
 
Not that I know of. If you find out please post here.

One way you could get over the settlement related performance drag is to trade leveraged funds.

I personally trade triple leveraged funds in my HSA.
 
Re: triple leveraged funds

I don't think leveraged etf will work for me. Some of my replacements would really well, for example SPXL:VOO, DRN:VNQ, and TYD:IEF are great pairs. However some other asset classes don't get as much love, see UGL:GLD. DBC just straight up doesn't have a good leveraged etf (or many good alternatives, at all).

It is possible I could call td and ask for options permissions for that account, it is possible to apply leverage by rolling long dated options. However that seems like a lot of work for the amount of money (~20k)
 
thebiggestelephant said:
Re: triple leveraged funds

I don't think leveraged etf will work for me. Some of my replacements would really well, for example SPXL:VOO, DRN:VNQ, and TYD:IEF are great pairs. However some other asset classes don't get as much love, see UGL:GLD. DBC just straight up doesn't have a good leveraged etf (or many good alternatives, at all).

It is possible I could call td and ask for options permissions for that account, it is possible to apply leverage by rolling long dated options. However that seems like a lot of work for the amount of money (~20k)
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Are you allowed to trade futures in your HSA account?
 
It does not appear that I am able to trade futures in my account.

I did some research using hsareportcard. It appears that the only account similar to lively is First Dollar. First Dollar states that they facilitate a TD Ameritrade that allows the trading of mutual funds, stocks, bonds and options, although say nothing about if it is a margin account.

I am also a little nervous about the Schwab acquisition and what impact that might have on ETF availability.
 
R1234 said:
Not that I know of. If you find out please post here.

One way you could get over the settlement related performance drag is to trade leveraged funds.

I personally trade triple leveraged funds in my HSA.
More...


Okay, it looks like it is possible to gain flexibility with a checkbook control HSA (also called an IRA LLC). The only downside is that getting a custodian for this is expensive and you are responsible for complying with Section 408 and 4975 yourself.

I found some options for this (most of them will do IRA and solo 401k as well):
ReSure LLC $975 (not sure if up front or per year)
IRA Financial Trust $999 up front, $300 maintenance / year

This seems a little rich for me, since that would be 5% of my account up front + 1.5% per year. It could be worth it for someone who trades crypto, or participates in real estate or private equity.

It could be possible to find a lawyer to setup cheaper, I am sure a lot of the $1000 is setting up the legal structure.
 
One more post (trying not to spam)

With the IRA LLC setup, it is possible to use margin. This is a great write up about the coverage of Sections 512-514 https://www.irafinancialgroup.com/wp/margin-self-directed-ira-llc/ .

The conclusion is that you can absolutely use margin. However the profit from any leveraged positions would be taxed from UBTI at 35%. This wouldn't be an issue just using margin to handle settlement. That could be really beneficial in quite a few strategies.
 
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