Margin loan

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Oct 2, 2021 9 Comments

Which brokers are cheapest and best for borrowing money on margin? Any pros, cons and gotchas much appreciated. If it matters, thinking of borrowing at most 25% of portfolio with mostly FAANG stocks.

I saw Interactive Brokers has the lowest interest rate. Robinhood looked next best with 2.5% and then others.

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  • IBKR has lowest rates for regular joes. Don’t use Robinhood, they can easily move their margin requirements and force sale due to their shitty system of handling things and reserves. The gottachas is if there is a crash it will stay deflated unlike before. Why did you do this now and now a year ago?
    Oct 2, 2021 3
    • If a crash wouldn’t happened if people bought the correction like last time in fomo so if a crash did happen nobody will be picking up the pieces especially when there is more certainty in the markets than before outside of China struggling to manage its debt and bond rates. You going on margin on the riskiest time in over a year and half. Certain equities/derivatives have a percentage you must keep liquid. These requirements can change in a short time period. Say if you bought Facebook and it crashed 70% and you get into margin call you need to deposit money to make up the difference within a few days or the house (brokerage) can sell your assets at any time at whatever price the market is at the time they choose to sell.
      Oct 2, 2021
    • Investment Bank
      Glinda

      Investment Bank

      PRE
      HP
       Glinda
      General Dynamics is correct, your timing is off. It is never smart to buy on margin unless you can afford to lose the money and cover a call.
      Oct 2, 2021
  • New
    cidir

    New

    PRE
    Microsoft
     cidir
    Borrowing 25% still gives OP a lot of buffer and seems appropriate given their risk tolerance. With FAANG even in severe drawdowns the major brokers only require 35% down. Also, brokers do raise margin requirements but only on high risk securities or things that drop below $10/share or overly concentrated positions. So margin call unlikely. If you have $1M+ call your broker and ask for negotiated margin rate. They should give you sub 2% at least Fidelity and Schwab do I have accounts at both at pay 1.25%. Use a major firm like fidelity schwab or ibkr, don’t clown around.
    Oct 2, 2021 3
    • New
      cidir

      New

      PRE
      Microsoft
       cidir
      Both will give sub 2% if you have $1M+ and call in. Annoying I know but easy way to save $ if you plan to use margin in your strategy.
      Oct 2, 2021
    • Google
      prime13

      Go to company page Google

      prime13
      That 1.25% - is that for margin loans? And what is dollar total for TDA?
      Nov 14, 2021
  • Amazon / Eng
    wawY45

    Go to company page Amazon Eng

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    Apple
    BIO
    I'm a no-man.
     wawY45
    IBRK.
    Oct 2, 2021 0