Why not then just short the single stock futures to begin with if you want a market interest rate for ur short position? Why need to buy EFP after the short stock position is initiated?
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IB no interest on first 10K rule, what do you do with the money?
- Thread starter Daal
- Start date
Why not then just short the single stock futures to begin with if you want a market interest rate for ur short position? Why need to buy EFP after the short stock position is initiated?
Quote from Nasdaq5048:
Why not then just short the single stock futures to begin with if you want a market interest rate for ur short position? Why need to buy EFP after the short stock position is initiated?
This is a true statement. The idea of introducing the EFPs was to allow people already in positions to switch to SSFs, and to create a simpler arbitrage mechanism to keep SSF prices in line. EFPs are just a cheaper and simpler way to conduct opposite transactions in the SSF & underlying.
can someone tell me what the margin used on this trade should be?
long 100 shares BSX
short 1 December BSX SSF
It seems to be using 900$ in margin... Which makes no sense to me...
On IB's margin page is says
"5%*Stock Market Value" for maintenance margin requirement.... Shouldn't my margin used in the trade be like 75$?
what am I missing here?
- mnx
long 100 shares BSX
short 1 December BSX SSF
It seems to be using 900$ in margin... Which makes no sense to me...
On IB's margin page is says
"5%*Stock Market Value" for maintenance margin requirement.... Shouldn't my margin used in the trade be like 75$?
what am I missing here?
- mnx
Quote from mnx:
can someone tell me what the margin used on this trade should be?
long 100 shares BSX
short 1 December BSX SSF
It seems to be using 900$ in margin... Which makes no sense to me...
On IB's margin page is says
"5%*Stock Market Value" for maintenance margin requirement.... Shouldn't my margin used in the trade be like 75$?
what am I missing here?
- mnx
I think u need to select IBEFP and trade it as a package in order to get the EFP margin
I've looked into the EFP's a little bit and here's some tax info that may be useful (if it hasn't been mentioned already)
1. All EFP income is considered short term gains and you'll get taxed at your applicable income tax rate.
2. The 60/40 rule does not apple to SSF's. That is one of the reasons why SSF's aren't very popular yet
3. You can't use an EFP with a high dividend and pay the 15% dividend tax rate instead of the regular income tax rate. This is because the position is perfectly hedged and the tax code specifically prohibits this.
1. All EFP income is considered short term gains and you'll get taxed at your applicable income tax rate.
2. The 60/40 rule does not apple to SSF's. That is one of the reasons why SSF's aren't very popular yet
3. You can't use an EFP with a high dividend and pay the 15% dividend tax rate instead of the regular income tax rate. This is because the position is perfectly hedged and the tax code specifically prohibits this.
Quote from mnx:
can someone tell me what the margin used on this trade should be?
long 100 shares BSX
short 1 December BSX SSF
It seems to be using 900$ in margin... Which makes no sense to me...
On IB's margin page is says
"5%*Stock Market Value" for maintenance margin requirement.... Shouldn't my margin used in the trade be like 75$?
what am I missing here?
- mnx
Look at initial margin, not maintenance margin. Should be 25% of the stock's value intraday, but if you hold thru the close of business, you will be required to have 50% of the stock's value as margin, or your position will be liquidated at the end of the day.
Quote from jimrockford:
Look at initial margin, not maintenance margin. Should be 25% of the stock's value intraday, but if you hold thru the close of business, you will be required to have 50% of the stock's value as margin, or your position will be liquidated at the end of the day.
sign up for portfolio margin and this won't be an issue
Quote from dj8899:
sign up for portfolio margin and this won't be an issue
This advice is useless for the majority of ETers.
The people who qualify for portfolio margin are the ones who need EFPs the least, because their accounts are large enough that they're getting good interest rates on most of their credit balances.