I've been in this program for like 15 days. I trade almost exclusively hard to borrow or slightly hard to borrow stocks, both long and short, and I've made maybe $1.00 thus far. Really disappointed thus far. For whatever reason, IB just isn't getting to the front of the line on the lending.
I've been in the program for two+ months. I'm a short term trader so dividend considerations are unimportant. I also frequently buy hard to borrow stocks. 46% (my half of 92%) on BVSN adds up quickly. I'm pleased. It covered my short cost fees last month. I wish I'd signed up earlier.
I'm still struggling to get any benefit from this (like 0.001% of account value thus far) but to be fair I learned that it has to do with my margin position and long/short portfolio. IB-AN, who monitors and posts here frequently, was very helpful in explaining this to me via PM. Essentially what's happening is that because I've got substantial leverage and a substantial cash debit (when backing out the cash generated by short sales) IB has the right to hypothecate 140% of that margin debit. The disappointing part is that IB gets first dibs on the best SBL opportunities with their 140% and then I get the chance to gain proceeds (well, half the proceeds) from everything over and above that. They're definitely paying themselves first, but I can't blame them for it. They are doing all of the work. Bottom line, I think whether this program is good for you depends on your individual situation
So if I understand this correctly, if I was 100% long & 100% short, I would be carrying an initial short margin requirement of 50%. IB would be able to hypothecate that 50% * 1.4, or 70%, leaving a possible max of 30% available to me to earn lending fees.
I don't think that's quite right, but maybe IB-AN can confirm. If you had a $10K account, long 10K and short 10K, your cash balance would say 10K, but when you back out the $10K cash generated from proceeds of the shorts, your cash balance would be 0. They could hypothecate 1.4x of 0, so you'd be OK If you ran more like 200% and 200% (assuming portfolio margin here), then on a 10K account you'd be -10K in cash after backing out the 20K cash proceeds from the short sales. They could hypothecate 14K of your longs, so you'd still potentially be able to take advantage of it, but the key point is that IB cherry picks the most attractive lending opportunities and you only get anything over and above that. In my case this means I occasionally see a few pennies here and there, but it's usually exactly a few pennies because some of my longs are HTB some are not IB-AN, did I get this right?
In a portfolio margin account, the OCC and your broker have a lien on all long positions, even if fully-paid-for. So are long positions in a PM account eligible for the IB Yield Enhancement Program? From FINRA, Special Rules for Portfolio Margin Accounts, Rule #9: Furthermore, the carrying broker-dealer has a lien on all long positions in a portfolio margin account, including margin equity securities, even if fully paid. Accordingly, to the extent that a customer does not borrow against long options and margin equity positions in a portfolio margin account or have margin requirements in the account against which the long options or margin equity securities can be credited, there is no advantage to carrying the long options and margin equity securities in a portfolio margin account and the customer should consider carrying them in an account other than a portfolio margin account. http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=3051&print=1
Lol, i have been in the program for a few months.... Similar results , similar sizes..i still hold out hope nonetheless.
I made .03119% ($31.19 per $100k) in March. It may not seem like much, but I'll take every little bit I can get.