stock yield enhancement program

Discussion in 'Interactive Brokers' started by ScroogeMcDuck, Jan 20, 2021.

  1. does the stock yield enhancement program affect margin requirements, because it only applies to "fully paid" stock?
     
  2. qwerty11

    qwerty11

    no
     
  3. FSU

    FSU

    I know this isn't what you asked, but,

    Generally you will be better off doing a synthetic with options vs buying stock and participating in a stock yield enhancement program. To do a synthetic, you buy a call and sell a put of the same strike. This way the full "interest" of a hard to borrow stock is "written in" the price of the synthetic.
     
    ScroogeMcDuck and Retief like this.
  4. john7722

    john7722

    Could someone elaborate on this? What kind of interest could you earn doing a synthetic ?
    I am thinking of doing a SYEP with IBKR
    Thank you
     
  5. qwerty11

    qwerty11

    With a synthetic you'll just get the market interest (if you execute well). Of course you cannot be sure that the market is willing to factor in possible high lending rates (that you might expect) for the near future...