Shorting an IRA

C

cdcolvin

I heard there's a way to manage your own IRA in a brokerage account that will allow you to take full advantage of the account rather than only being able to go long. Can anyone provide any details on this or point to a reference that would describe this more?

The tactic is to create a LLP, name you and your broker as members of the LLP and place the IRA into the LLP and have the LLP invest the funds.

Thanks,
Chris
 
Quote from cdcolvin:

I heard there's a way to manage your own IRA in a brokerage account that will allow you to take full advantage of the account rather than only being able to go long. Can anyone provide any details on this or point to a reference that would describe this more?

The tactic is to create a LLP, name you and your broker as members of the LLP and place the IRA into the LLP and have the LLP invest the funds.

Thanks,
Chris
More...

sounds suspect to me. you can easily short in an ira through rydex type funds.
 
On IBs home page under "New" there was a line:

"Trading futures in your IRA" or something to that effect just this week....I personally know someone who trades the ES in their Roth IRA everyday, both long and short, without any weird shell games...this is not done on margin of course, as you cannot get a "margin call" into your IRA and exceed the allowable contributions. If you do go belly up, they close the IRA account and you pay via a collection firm if you allowed yourself to actually go negative. Anyway, point of this rambling...call IB and ask about the new trading from your IRA, they should know most of the details, or just search the web. It is doable and is done everyday.

Good luck!
 
Quote from cdcolvin:
The tactic is to create a LLP, name you and your broker as members of the LLP and place the IRA into the LLP and have the LLP invest the funds.
More...
If you have your IRA at a trustee that allows investments in non-publically traded issues like LLCs/LLPs, then you can do that.

HOWEVER, if the trustee abides by the regs, you'll have to prove that you are not involved with the LLC/LLP. The investment must be in an unaffiliated entity to avoid people taking the money out of their IRAs early without paying penalties.
 
Rules on investable assets in an IRA are much more permissive than most people assume. You can purchase a home or even rare art in an IRA. To better 'manage' your IRA investment one can, as mentioned, move it to Rydex funds, move it to a broker like Interactive Brokers that allow long or short futures in the IRA and option spreads, or set up a 'self-directed IRA' through any number of futures brokers that accept these types of accounts.
 
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