I posted a question on this forum last week looking for the cheapest brokerage fees among discount brokers for larger traders: https://www.elitetrader.com/et/thre...trading-frequently.333096/page-8#post-4874344 I am now trying to square the financing question: is it possible to borrow $1m for a lower rate than the one offered by IB? Tony
I used to borrow quite a bit from IB and it was the cheapest by a long mile when considering advertised rates. Yet I heard some brokers can offer much better rates than those published for larger accounts.
Are you saying that those rates are negotiable? https://www.interactivebrokers.com/en/index.php?f=1595
Never tried to negociate with IB, and used to borrow several million almost constantly. I heard Etrade is negociable for accounts of similar size, more brokers might be as well. No idea how much of a risk there is someone call you after a while and claims they can no longer honour the deal offered by another rep, and you have to fo from fed rate+0.5% for instance to their published rate, which is probably 3% or more over the overnight rate.
Interactive Brokers generally does not negotiate...they use "Wal Mart" type pricing (i.e. everyday low price). However, TD Ameritrade, E*TRADE, Fidelity and Schwab will negotiate if you can hit minimum asset levels and share volume targets. There are some people who don't pay any commissions on E*TRADE or TD Ameritrade, although I'm sure they pay more than zero for margin interest.
Almost anything is negotiable if you are real size but think about their profitability. There needs to be something left profitable or there is no point in hosting your account. Trade for free and the broker probably want a few million on file for stock loan margin spread or rebates payment. Negotiate down the margin rate and now all you have left is stock loan and rebates. Put yourself in their shoes. A lot will also depend on the makeup of your portfolio and how much leverage you want. If you are real size with plenty of assets you and your broker is bank margin rates can get really cheap. Leave them nothing and most will tell you to walk or create trial rates so they can analyze your activity.
What I want to know is if you can use the margin loan on other things besides stocks like real estate. For example. E*Trade allows you to borrow up to 50% of your portfolio and you can use it for real estate and others
You sure can - borrow and withdraw. Algo will liquidate your holdings though in the case of a margin call.