What are the pros and cons of Margin Portfolio vs Reg T for IBKR customers who wish to apply leverage conservatively? When does it make sense to switch from Reg T to Margin Portfolio? For those investors who invest more in non-US stocks than US stocks, does it make sense to move to Margin Portfolio account?
This is kind of like getting a mortgage. A lot of people say you should get a 15 year mortgage because it pays off faster. This is retarded. There is nothing stopping you from paying down the principle of a 30 year mortgage and the lower payments of a 30y will cut your risk in case you encounter an economic down turn. Portfolio Margin essentially gives you more margin (in most cases) by taking a closer look at the securities you are holding. Weather or not you actually use the margin is up to you. Intentionally limiting yourself to less margin by using a reg T account does you no good. Portfolio Margin seems like a win-win to me if you meet the account criteria. Lets see what the others have to say...
Is the interest rate lower for Portfolio Margin compared to Reg T? If yes, then it's a no-brainer to switch to Portfolio margin.
There is no advantage to keeping your account woth Reg T when you are able to have Portfolio Margin. I believe the min acct. value is $125k.
Portfolio margin gives you a higher leverage ratio, so given the same positions, you are less likely to be autoliquidated/margin-called. The interest rates that IB charges do not vary based on PM or Reg-T margin.
Ha! That's what I'm getting at. You are focused on denying the banks income, instead of focusing on your own needs. Its spite and hate slowing you down. If you get a 30Y but prepay principle at the 15 Y payment rate you save money. Bonus, you can always make the 30Y payment if your budget gets tight.