I'm confused...are we trying to put the first 10k to work...or be invested fully? triple 7's has got this right....
lol, I'm so confused I don't know if I have it right or not. We really need to see an actual , real life example of this where you do the EFP thing, retain your intraday buying power (minus the 20% margin) and wind up earning interest on ALL your CASH that is not invested outright in swing positions. I see where someone with a long term short or long position might want to do something with EFP's. We are talking here strictly about getting around the 10k No Interest Zone, and not losing your buying power to do it.
What about buying corporate bonds which are A rated? Get 5.2% or so on them and you can borrow 90% against them for your other trading ....
I'm with others here - I can't figure out, and no one could explain at IB - how this would actually work. Could someone from IB post an example? So, say I've got $10k sitting in my account. I look at high-yielding EFPs - how should I evaluate which one to use? Thanks!
I'm not from IB but I'll take a shot. Find a stock with the yield you want [ I use a combination of the tws market scanner page and the java app available via the web page which is easier to read] then create a combo order using this stock symbol in tws select "smart" and "ibefp". Then sell as many combos as fit in your 10K.
Ok, lets say he did that. Now what does your account look like in terms of daily buying power and interest earned on the original 10k. These are not hard questions , and if IB wants to promote this product they need to make it a bit more transparent. And yes Cferret, I also pondered that question but I seriously doubt that could be done. Even for the genius's at ET that would be a stretch.
I didn't quite understand too. Does it mean around 5% no risk yield on ALL money with 20% margin? If so doesn't it mean a possibility of maxing out a margin and getting 25% no risk yield the same way? Sounds too good to be true...
and you guys are all supposed to be traders yet can't seem to figure out a simple thing like this ... nobody here seems to know the slightest thing about finance ... and no I'm not going to explain it, try to figure it out yourself where the yield comes from, you might learn something (just a hint: look up how futures are priced) ... guess there is a reason why some peoples accounts are below 10k ...
I see what you mean. It is not clear to me how this affects you buying power. I just took all the cash in my account( about 50% of balance) including from shorts and used this strategy and my account still shows a healthy sma balance and buying power. sma balance only went down by about half of the posistion I took. I think it is interesting that you can use cash from shorts to execute this stategy because the first 100K does not earn interest.
I always knew that interest is factored in futures price (currency futures for example), but just thought that it's different with SSF (I have no experience with them and not very much with stocks too) when people say that it's the way to make synthetic interest... So it's not possible with SSF just like it is with currency futs?