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They do not allow margin in IRAs.

They don't allow margin, but they do allow margin accounts.

The tax laws/regulations prohibit using IRA assets as collateral for a loan (this is deemed not only a withdrawal but I think it's one of the nasty "you have just withdrawn everything and no longer have an IRA" moves). Since margin accounts are all about using your stocks (IRA assets) as collateral, it is absolutely true that margin is not allowed in an IRA.

But some clever lawyers at IB noted that some of the things that only margin accounts are allowed to do, don't actually fall under the definition of using IRA assets as collateral. Notable among these is using the proceeds of a stock sale before waiting the two-day settlement period, and lending out shares for shorting. And apparently trading futures, which I didn't realize until now.

None of this is "margin" but the rules say all of it requires a margin account. So voila - IB offers a margin-less margin account.

- Jamie
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