Okay, this is a conversion - no Dividends between now and expiry. Buy it for -280.05, it expires at 280. It's only a .05 profit, BUT - it's guaranteed and you hold 28k for a month, collecting (I presume) the small holding interest paid by IB. Also, you can use that money for another trade, right? Or - margin should be nothing, so why not lever it up and collect multiples of the interest? I feel like I'm not getting something. Maybe it's legit, but the payoff is just so low, why bother? and what is the risk?
This is not conversion, this is Reversal strategy. Conversion would usually pay you the amount equal to the interest rate, so you could use it instead of transferring money to a bank and getting interest paid there. Your example (seemingly-profitable Reversal) may happen when short interest %rate increases, and/or there may be risk of it increasing. I'm also not sure you could actually get -280.05 for it, or a sufficient price to cover costs. Usually it's all calculated to get you the standard interest rate in the end, if you don't overpay.