HSA options for active trade

Discussion in 'Retail Brokers' started by thebiggestelephant, Mar 31, 2021.

  1. I currently use a Lively HSA with TD Ameritrade. For my IRA's, I use a few fairly low risk TAA algorithms that trade once a day. However, this account and all others that I have seen are cash accounts. TAA is impractical in a cash account because the T+1 settlement kills re-allocations over 4% or so. It is possible to hold more cash to buffer turnover, but this would likely reduce the performance below my buy-and-hold portfolio that I rebalance monthly.

    Are there any HSA plans compatible with margin accounts? I would obviously expect that you could not borrow against liq, just like you can't in an IRA.
     
  2. R1234

    R1234

    Not that I know of. If you find out please post here.

    One way you could get over the settlement related performance drag is to trade leveraged funds.

    I personally trade triple leveraged funds in my HSA.
     
    thebiggestelephant likes this.
  3. Re: triple leveraged funds

    I don't think leveraged etf will work for me. Some of my replacements would really well, for example SPXL:VOO, DRN:VNQ, and TYD:IEF are great pairs. However some other asset classes don't get as much love, see UGL:GLD. DBC just straight up doesn't have a good leveraged etf (or many good alternatives, at all).

    It is possible I could call td and ask for options permissions for that account, it is possible to apply leverage by rolling long dated options. However that seems like a lot of work for the amount of money (~20k)
     
  4. R1234

    R1234

    Are you allowed to trade futures in your HSA account?
     
  5. It does not appear that I am able to trade futures in my account.

    I did some research using hsareportcard. It appears that the only account similar to lively is First Dollar. First Dollar states that they facilitate a TD Ameritrade that allows the trading of mutual funds, stocks, bonds and options, although say nothing about if it is a margin account.

    I am also a little nervous about the Schwab acquisition and what impact that might have on ETF availability.
     
    jtrader33 likes this.

  6. Okay, it looks like it is possible to gain flexibility with a checkbook control HSA (also called an IRA LLC). The only downside is that getting a custodian for this is expensive and you are responsible for complying with Section 408 and 4975 yourself.

    I found some options for this (most of them will do IRA and solo 401k as well):
    ReSure LLC $975 (not sure if up front or per year)
    IRA Financial Trust $999 up front, $300 maintenance / year

    This seems a little rich for me, since that would be 5% of my account up front + 1.5% per year. It could be worth it for someone who trades crypto, or participates in real estate or private equity.

    It could be possible to find a lawyer to setup cheaper, I am sure a lot of the $1000 is setting up the legal structure.
     
    jtrader33 and R1234 like this.
  7. One more post (trying not to spam)

    With the IRA LLC setup, it is possible to use margin. This is a great write up about the coverage of Sections 512-514 https://www.irafinancialgroup.com/wp/margin-self-directed-ira-llc/ .

    The conclusion is that you can absolutely use margin. However the profit from any leveraged positions would be taxed from UBTI at 35%. This wouldn't be an issue just using margin to handle settlement. That could be really beneficial in quite a few strategies.
     
    jtrader33 and R1234 like this.