My Portfolio is as follows, I have a NAV of around 1.2Mil and IB initial margin of 1.127Mil. So my NAV is around 106% of my NAV. My excess liquidity is 150k and available funds are 71k. The market value of all my securities is around 3 Mil and I have short options covering pretty much all my long with a value of 1.4Mil I then currently have a open margin loan with IB of around 425k. For the lasts couple months not a single stock in my 3Mil in positions has been lent out. I even hold stock in positions that have a short utilization of well over 50%. I keep on getting told by IB CS chat that it is because there is no interest, but I find that very hard to believe. I saw on the FAQ the following, Excess margin securities are securities that have not been completely paid for, but whose market value exceeds 140% of the customer’s margin debit balance. I wonder if the lack of lending is related to this. I have tried to ask CS chat but I don't think they are understanding what I am asking. Does anyone have any experience with my situation?
IB chat is hit or miss, sometimes you get a genius, most of the time it's a dimbulb. You need to escalate.
I was looking over the specifics, it shows my leverage at 5.56. I think that is because they are calculating the gross position values of my short and long over my NAV, but not netting them out.
When you have a margin loan, your shares are kept by the broker as collateral and can be lent out by them without paying you. This is known as rehypothecation. Even if you only have a small margin loan, they get to choose which shares are kept as collateral, and they'll choose the ones with the most demand for short selling. In my experience, even if you sell a box spread to erase the margin loan, you still won't get paid when your shares are lent out. I've never been able to get a clear sense of what the rules are for these situations when you have levered complex positions but no margin balance.
Very helpful, yes I've sold some SPX box spreads already the 425k to IB is seperate. So even if I zero out the 425k in margin loan with actual equity? So bringing my NAV to actual 140% of my margin requirement do you think I will be able lend?
My NAV is usually ~3x my margin requirement with leverage of 10-20x, and I sell SPX box spreads when necessary to keep my cash balance (excluding proceeds from short sales) above zero. I know shares are being lent out because I often receive payments in lieu of dividends, but I don't receive fees for lending them. The only exceptions have been a few days where my cash balance was something like 3x my NAV.
I have been seeing payments in lieu of dividends, I didn't think anything of it. Is that what that would imply though?
Yes. From here, "a Pil in the form of a credit is made when a long stock position in an account has been loaned out on its ex-dividend date." I don't know of another case in which you would receive a payment in lieu.