Portfolio margin

[zdreg]

Quote from gkishot:

Right, but why at IB only cash has necessarily to be a collateral? Why the long marginable securities do not make the cut?

That's what makes IB different from other brokers.

not true. where do you get that idea that long marginable securities cannot be used as offset to short securities?
if you are long 100,000 fully paid securities
you can be short $100,000 overnite or short $300,000 intraday.

lets try this:
you put in $100,000 into the account.
intraday you are allowtobe at 4:1`. or $400,000
you buy $100,000 worth of stock.
the stock is fully paid for. lets assume you do nothing that day. the next dayassuming the price is unchanged you still can add $300,000 in positions.

 

[jimrockford]

Quote from zdreg:

not true. where do you get that idea that long marginable securities cannot be used as offset to short securities?
if you are long 100,000 fully paid securities
you can be short $100,000 overnite or short $300,000 intraday.

lets try this:
you put in $100,000 into the account.
intraday you are allowtobe at 4:1`. or $400,000
you buy $100,000 worth of stock.
the stock is fully paid for. lets assume you do nothing that day. the next dayassuming the price is unchanged you still can add $300,000 in positions.

zdreq,

the info you are giving throughout this thread is incorrect.

You are confusing the issue of interest calculations with the very different issue of margin requirements.

IB does not allow the proceeds from a stock short sale to be used to reduce the interest you will be charged on a long stock position.

 

[gkishot]

Quote from jimrockford:

zdreq,

the info you are giving throughout this thread is incorrect.

You are confusing the issue of interest calculations with the very different issue of margin requirements.

IB does not allow the proceeds from a stock short sale to be used to reduce the interest you will be charged on a long stock position.

True.

zdreq,

Let's say you have 200k in equities ( stocks, not cash ) and 0 cash balance. You sold short stock with 100k of proceeds. Now this short stock went up by 20% and it's worth now 120k to buy it back. IB will charge you interest on 20k even though there is 200k of stock equity in your account. You have to have cash set aside in your account to finance your short positions. Wouldn't be better for your to put it to work instead and buy some stocks? Yes, it would, but only if your broker agrees to use long stocks as collateral for your short sales.

Otherwise you need to borrow cash loan from your broker and to pay the interest.

 

[zdreg]

Quote from jimrockford:

zdreq,

the info you are giving throughout this thread is incorrect.

You are confusing the issue of interest calculations with the very different issue of margin requirements.

IB does not allow the proceeds from a stock short sale to be used to reduce the interest you will be charged on a long stock position.

i reviewed all my posts on this thread. they are correct.

IB does pay interest on short sale proceeds exceeding $100000 for everyone including individuals and hedge funds


there are two separate calculations. debt interest arising from long positions. credit interest arising from short positions.

 

[jimrockford]

Quote from zdreg:

IB does pay interest on short sale proceeds exceeding $100000 for everyone including individuals and hedge funds


there are two separate calculations. debt interest arising from long positions. credit interest arising from short positions.

This time you got it right.

 

[zdreg]

jim-

i know it is difficult for you to admit but every post by me on this thread was correct and you learned something this time around.

 

[jimrockford]

Quote from zdreg:

jim-

i know it is difficult for you to admit but every post by me on this thread was correct and you learned something this time around.

If it were true, I would have no difficulty admitting it. But it isn't true, so there is nothing for me to admit.

 

[zdreg]

Quote from jimrockford:

If it were true, I would have no difficulty admitting it. But it isn't true, so there is nothing for me to admit. [/QUOTe

if you are able to point out the errors in any of my posts on this thread.