IB is advertising on tv that central banks are flooding the market with cheap money and IB is providing that cheap money to their clients. If you have a $200,000 portfolio margin account ,they will allow you to use upto $ 1 million. The question is how to use this facility and use cheap money to make more money than interest paid without blowing your account. All suggestions and comments are welcome. Thanks.
The idea is that you'll purchase dividend paying stocks that yield more than the low interest charged on margin loans at IB. It's great if you can tolerate the risk of declining stock prices caused by a general market correction, dividend cut, etc.
When someone says "I'll lend you cheap money so that you can make a profit on a sure thing", the logical question I have is "if it's that great why don't you do it yourself and take all the profit....."
what does "they will allow you to use upto $ 1 million" mean? Can I use that 1 million to buy a parking lot?
Buy 1 million in OIA before ex-d, sell after. Dividends are over 5% annual, paid monthly. Many more just like it.
kind of small minded man. That's not how it works. If you have so much money, you don't need me. If you don't you do. I don't make money by taking risks. That's for borrowers. I make money by loaning it to risk takers. I got the money, you got the collateral, let's make a deal. Every now and then one of you makes money. But we almost always do. Before you start finding fault with portfolio margin, you ought to first find fault with pawn shops. Then at least maybe you will understand how the deal works.