Earning interest income in cash with IB

Discussion in 'Interactive Brokers' started by Daal, Nov 16, 2008.

  1. Jachyra

    Jachyra

    Not so sure about that... according to IB's website: "Bonds must be paid-in-full in a Cash account."

    And most places that do allow bonds to be margined usually require the bond to be trading at 70% or higher than it's par value.
     
    #21     Nov 22, 2008
  2. Daal

    Daal

    according to this the maintance margin is 35%. The bond I bought is rated A according to fitch
    http://www.interactivebrokers.com/en/trading/marginRequirements/margin.php?ib_entity=llc
     
    #22     Nov 22, 2008
  3. Here's another idea for current income. Take a look at LQD.....this is an ETF for Investment Grade Bonds. "No matter how gruesome the economy, no matter how troublesome the financial strain, the idea that an index of the most highly rated corporations will all fail to pay their bondholders is silly." Check out the yield...6.47%.
     
    #23     Nov 22, 2008
  4. Bob111

    Bob111

    yep..it's all good on paper...35% my ass..
    check this out(my screen shoot on page 4)-
    http://www.elitetrader.com/vb/showthread.php?s=&threadid=141896&perpage=6&pagenumber=4

    this account filled with investment grade bonds and i use to day trade on it with 1:4 margin,earning interest on bonds,while day trade on borrowed money(basically free).
    take a really good look...
    i agree-there is many bonds today with really great yields,secured,guarantied etc..but..this is my experience and as you can see-multiple problems from many different angles suddenly arise right out of nowhere and timing is perfect..2008 my best year in day trading ever, but i would make 2-3 more, if IB would let me borrow against those bonds.their "risk model" is f**d big time..btw-i still did not receive ANY respond from IB on ticket i mention on that thread. and i open another one on different account-same shit-no answer for 3 weeks..

    btw-lehman was AA+ rated(goes down to D in less that 2 weeks,currently trading at 8 (!) cents on dollar)..
    i'm not advising against the idea..once again-here is my experience with "safe investments vehicles".just make sure you prepared for something like this..
     
    #24     Nov 22, 2008
  5. Daal

    Daal

    Right on schedule, lets see if these bonds rally. The goverment pretty much made the bonds as good as treasuries, I'm not an expert on this but it seems that the government agreeing to take losses on C asset base makes the bond recovery in a bankruptcy huge
     
    #25     Nov 24, 2008