Shld 25d R/r

Quote from heech:


If you're holding C long right now, and planning to hold it at least through June 19th, for example... you can "make" an extra $0.40 per share by selling your stock (~$3.50) and buying the June future (~$3.10).
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This is over 11% per month. Wow! What's the downside?
Don't you need to sell SSF and buy stock to make profits? That's what I always thought.
 
Quote from gkishot:

This is over 11% per month. Wow! What's the downside?
Don't you need to sell SSF and buy stock to make profits? That's what I always thought.
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There's no downside. This is exactly the question you asked earlier... why shouldn't someone holding a stock long (in a margin account) be getting paid, when the stock gets lent out?

This is how you get paid.

Selling the stock and buying the SSF is equivalent to holding a long position in the first place. The IB link explains it in great detail:

http://www.interactivebrokers.com/en/trading/pdfhighlights/PDF-ExchPhysical.php
 
What if the long stock does not have SSF. Does it have to be paid for being borrowed?
Since IB still charges interest for shorting it.
 
Quote from gkishot:

Hi Mark,
Regarding your suggestion: wouldn't be broker charging interest on the short stock so you end up having no profit at all?
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That's the point. You spoke of owning long stock.

Sell the long stock and replace it with the long call and short put. There is NO short stock.

I don't check this stuff, but C has been among those stock for which this can be done for a long time now.

All you have to do is look at IBs list of stock that cost money to borrow, and that should be your list.

But what you really need to do is check the stocks you already own long. Otherwise you cannot take advantage of this play.

This is a gift for those who own, and intend to keep, stocks.

Mark
 
Quote from gkishot:

What if the long stock does not have SSF. Does it have to be paid for being borrowed?
Since IB still charges interest for shorting it.
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Nope.

Keep in mind it's not "IB" that charges interest for shorting it... it's whoever actually has the stock to lend. IB is just charging you market rates for borrowing it.

But whatever that process is for borrowing/lending shares... it's invisible to retail traders. So, we don't get to take advantage of it... unless the SSF exists.
 
Quote from hedgex:

Guys, go vote for displaying indicate rates in the shortable column. Indicative rate in the shortable column
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That's a good idea and thanks for posting the link. Obviously, this is for IB users on;y (voting)
 
FWIW, I recently learned that you can set up a template under IB's Account Management which will break down the margin charges issue by issue (the daily statement presents an aggregate total).
 
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