I don't love selling options since I'll have to roll the position forward every few months. I'm looking for a way to lock in cheap money for several years. Anyone have any experience with shorting US Treasuries like I linked in the first post: https://ibkr.info/article/3419 ?
SPX options seem to go until December 2022 (so I don't know if the maturity is such a problem). Regarding shorting treasuries: I'm not sure you can use the cash like you want. Did you read the article you linked? It states: "The proceeds of the short sale are not available for withdrawal." I don't know anything about bonds but with selling options you get "clean" money. The other "clean" way would be to transfer the BRK et al. into single stock futures (SFF). Not that I recommend that (practical issues) but just to sum up the possibilities.
Why it shows $200k margin I don't know (maybe this has to do with market order?) Note that buying power will never increase with a BOX, you only get more (usable) cash (so you don't need to lend cash).
IB will currently let me withdraw the money I want which would then be a margin loan. My thought was to sell a 1% bond to avoid being on margin at 2%. I read that I can't withdraw the proceeds, but can I use to avoid being on margin? Perhaps I'm trying too hard to minimize the financing costs. In longshort's example, it appears he is getting $199,516 now in exchange for $200k on May 14th? Annualized, that is a cost of $2,453/year which is 1.2%. Am I reading that right?
For anyone following along, I found this explanation from the OCC helpful: https://www.theocc.com/components/d...-strategies-for-borrowing-or-lending-cash.pdf
No Why? It's about lots of money and almost trivial to solve... Yeah, but you might wanna do longer dated..............
Maybe I wasn't clear since I'm seeing lots of threads about selling boxes to avoid a margin loan. If I withdraw $1m to loan out and am thereby on margin for $1m and then I sell $1m worth of SPX boxes, aren't I financing via the boxes instead of an IB loan?
The order in which you do it matters for this. You have to first sell the box, then perform the activity that allows you to effectively duplicate a margin loan. You can't do it in reverse as you indicated.
My answer was for bonds, because you asked that... "My thought was to sell a 1% bond to avoid being on margin at 2%. I read that I can't withdraw the proceeds, but can I use to avoid being on margin?"
I'm having a surprising amount of trouble getting up SPX boxes in TWS. Should I be using Option Strategy Builder or another window? TWS or Mosaic? I'd like to be able to find a few active SPX boxes that are trading and watch them in Time & Sales. Any advice or screenshots would be appreciated.