We’re going to buy an apartment soon. As I will finance it with my own bank, I’ll have to transfer all our 3a assets from Viac to that bank. There it will be reinvested once it arrives. But this whole thing will result in being out of the market for around one week. Usually that’s no big deal but as you know, I get very unlucky in those situations. Worst case scenario: 56k Viac gets sold and market goes up 5% by the time it’s reinvested. CHF 2’800 gone…
Of course it could also be the other way around, but I don’t want to risk that.
So I was thinking using my IBKR account to cover that. I have 40k in there and was thinking about buying VT on margin (maybe around 40k) on the day our Viac accounts are liquidated and sell it again once it’s reinvested.
But I don’t know the margin requirements. Is it even possible to be 2x leveraged for a couple of days? Are there possibilites with options?
The maximum overnight margin for a Reg T margin account is 50%, i.e. a leverage of 2x. So yes, it is possible but also very risky. Any drop of the market will lead to assets being liquidated to maintain the max. 2x leverage (not counting intra-day movements, that threshold is lower).
Yes, you can use options to hedge, but you will pay for the privilege. VT is at 99 USD at the time of writing, let’s assume that you want to buy a ‚call‘ at a strike of 100 USD. This gives you the right to later exercise the option and buy VT at 100 USD, or let it expire if VT stays below 100 USD.
To hedge VT for a total of 40’000 USD this way costs you about 800 USD. Meaning break-even for this hedge comes in a VT price of 102 USD. Worth it? I don’t know… At least the maximum loss is 800 USD, which seems less risky than boosting to 2x leverage.
I would rather go with futures at least for US part. 5x leverage for a week should be safe. Especially if you have other stocks in the same portfolio and can tap into margin if it is really necessary.
Another option is that you are going out of market and we are buying VT calls. After VT runs 10% up in one week, we compensate you your opportunity costs. And I am even not joking.
Anyway maybe it is time to try an experiment on turning Cortana effect into a market manipulation tool.
Is this a single 3a account/portfolio that you’re transferring or do you have 3-5 accounts, as many people do? If it’s split into multiple accounts, staggered transfers should significantly reduce the overall risk.
I wouldn’t fret this too much. As you say, the market can move both ways and even if (big if) we are giving credit to your legendary unluck with the timing of your investments, you are but one person and there are tons of people with legendary unluck who are taking different actions that would be pit against yours.
I don’t think your lack of luck so far with the timing of your investments is actionable, so I wouldn’t act on it.
Great idea! I have 4 accounts and my GF has 5 accounts. We will do the transfers one by one each week till everything is transferred. So this should even out things.
Why do you need to move the money in the first place? Can’t you pledge your Viac assets? Or do you want to use the money directly as equitiy capital (Eigenmittel)? (but why is it reinvested then). I am asking because I might be in a similar situation like you (buying house, assets in Viac account).
You can’t pledge 3a accounts from other banks. It has to be at the same bank which is lending you the money. This works only for vested benefit accounts, pension funds and life insurance policies.
P.s. Markets are crashing. This was clearly caused by me?
When I had to make a similar transfer the solution I came up with was to sell deep in the money put options on SPY ETF of duration ~1 week in IBKR
My logic was that SPY is the most actively traded ETF so lowest spreads and a proxy for the wider market, 1 week means you gain from premium decay
Risk is that you will likely end up with 2x exposure for a while because you don’t know precisely when your 3p provider will sell / buy assets. But if you are building a position this may be acceptable
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