I just spoke with a support person at IB. He said that in the relatively new IB IRA Margin account, a person can trade the same funds over and over again on the same day. That is, there is no waiting for the trades to clear. After a stock is sold, the proceeds are immediately available for the re-purchase of stock. Moreover, he said that normal PDT rules apply, except for the availability of margin. I want to be sure that I understood the support person correctly. Does anyone have experience with this new IB IRA Margin account? If so, is the above description accurate? What is the downside? I appreciate that it is not a true margin account and that you cannot borrow money in an IRA. Norm
http://www.interactivebrokers.com/en/accounts/iraClasses.php Apparently you can daytrade in the account, maybe long only.
IB's so called IRA "margin" account is a misnomer. Those are not really margin accounts. Those are same-day-substitution accounts. There is no margin involved. I also got different type of answers from different sources in IB.
I appreciate that there is no margin. My question is, can I trade many times a day using the same money? In other words, do the sells transactions really clear instantly, so that there is no waiting at all for the money proceeds to be available for the next stock purchase? Has anyone actually done this and is there a downside?
You can trade the money over and over again in the same day. So the IRA Margin account basically lets you trade the money as soon as you sell it instead of waiting 3 days for cash to settle like normal IRA cash account. But I don't think you can short or use more than the cash value of your IRA account.
If your account is less than $25k, you are restricted to have 3 round trip trades in 5 rolling market days in IB IRA "margin" accounts. For equities, I cannot short.
Trader42 You can sell covered calls in most IRA's. I've had my IRA with three different brokers over the past several years. They all allowed selling covered calls in an IRA account.