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Investing/Strategies / Mechanical Investing
|Subject: Re: ot: low interest rates at Interactivebrokers||Date: 5/16/2013 12:03 PM|
|Author: Rayvt||Number: 243094 of 265913|
I have been trying to think of ways to take advantage of their low margin rates.
For the last few years, I've held 3X leverage on BND there. 1x (without margin) paying ~3.4% and 2x paying ~(3.4% - 1.6%) or 1.8%, for a total yield of ~6.5%.
And I watch it like a hawk for when rates turn, at which time I'll sell BND completely.
However....that game is nearly at an end. The yield on BND has been dropping, and the spread between yield and margin is shrinking.
Don't forget that IB has a $10 monthly minimum commission. The way I worked around that is the same way I worked around the margin limit --- moved one of my 10-stock monthly MI portfolios to the IB account.
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