IB Margin Bond purchase/coupon

Discussion in 'Retail Brokers' started by Soon2Bgreat, Jan 18, 2008.

  1. IB says you need to maintain 3% of face to purchase and keep a long bond position. Is this correct?

    If i am long a bond position on margin...do i keep the entire coupon payment or only the 3% of it?

    I know these are quite simple and basic questions, but the help would be appreciated.

    Thanks,
     
  2. Bob111

    Bob111

    3% * T-bill market value.
    10% * bond market value(investment grade)

    http://individuals.interactivebrokers.com/en/trading/marginRequirements/margin.php?ib_entity=llc


    btw-long pretty much any bond on margin make no sense..you will receive full coupon payment
     
  3. Why does it not make sense?

    Thanks for the help.
     
  4. Bob111

    Bob111

  5. USD 100,000 5.72% (BM + 1.5%) 5.22% (BM + 1%) 1,000,000 4.72% (BM + 0.5%) 3,000,000 4.47% (BM + 0.25%

    Are you trying to say that i will be charged this interest?

    If so, is the answer not simply purchase a bond that pays a higher coupon than your margin interest rate or get a lower interest rate by funding in a cheaper currency?

    I appreciate your input...thank you.
     
  6. Bob111

    Bob111

    check your PM