I've recently started trading covered calls with Interactive Brokers and find that I can't use cash from a position I've just closed until three days afterwards due to the 'T + 3' rule. Is this the same for all the big online brokers? (I'm based in Australia btw.)
Just one (major) problem Robert - as an Australian (not sure about other countries) IB won't allow me to open a margin account. Btw using margin aren't you paying a bunch of money in interest?
I can't be 100% sure, but I'm not aware of any such restriction with us at Wedbush Securities. Margin accounts only charge interest if you borrow overnight. E.G. Account equity $50,000. you buy $50,000 in stock and hold overnight, no charge Account equity $50,000. you buy $60,000 in stock and hold overnight, you are borrowing $10,000 and will pay interest until you sell out $10,000 worth of stock. In a margin account, you would not have to wait for a trade to settle. There are two types of Reg-T margin accounts. One offer up to 2X for DT and overnight and one offer up to 4X for DT and up to 2X overnight. For DT, you need an account of $25,000 or more at all times.
Hi Robert, Do you mean that it might be possible for Australians to open a margin account with Lightspeed? I'd be interested if possible. I'm in the same boat as the OP. Interactive Brokers only offer margin accounts to Australians who register as a business.
According to IB Australia they do provide margin accounts: https://www.interactivebrokers.com.au/en/index.php?f=4745
From IB chat just now: "Margin account is available only for Corporate registered in Australia." Looks like it might be the way to go - create a company of one person and then the margin acct. According to IB I don't have to use margin in the account either.