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,
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
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.