IB. Interest on naked put sales

[lkh]

Does IB pay interest on the cash recieved from naked put sales that are open?Tia

 

[riskarb]

sure do, naked calls too!

 

[Opra]

By extention, interest is paid on any position that is net credit, such as short verticals and IC's, right? Thanks in advance.

 

[riskarb]

Correct, any net increase in credit balance. I liked the rhyme.

 

[Opra]

and thanks again.

 

[TempusFugit]

Not only do they pay, the current rate is 4.313% (!), much higher than, say, thinkorswim.

 

[Don87109]

Quote from riskarb:

Correct, any net increase in credit balance. I liked the rhyme.

Actually, I don't think that IB pays much interest on the credit balance from short stock sales. As I recall, on the first $100,00 no interest is paid.

Don

 

[Don87109]

Quote from TempusFugit:

Not only do they pay, the current rate is 4.313% (!), much higher than, say, thinkorswim.

That's not quite correct. 4.313 is the benchmark rate and they pay a little less than that depending on the actual balance. For example, between $10,000 and $100,000 they pay benchmark minus 1/2% which is 3.813%. On the first $10,000 I don't think they pay any interest.

Don

 

[JackR]

IB interest rates on short sales credits are as follows. Current Benchmark (BM) is 4.310%

< $100,000 = No interest

=> $100,000 = BM - 1.25%

=> $1,000,000 = BM - 0.5%

=> $3,000,000 = BM - 0.25%

See http://www.interactivebrokers.com/en/accounts/fees/interest.php?ib_entity=llc#shortCredit for all rates.

Jack

 

[dougman100]

Does anyone know what the margin requirement is to sell a naked put on ES Jan 06 with a strike of 1200, for example. I know the SPAN system is used, but is there some sort a approximation that you can use to get an idea?
Securities options seem to be at least 10% of the underlying value. I'm not clear on whether futures options are lower.