Nope, being a pro investor requires a lot more than just having a loan. You also need to behave like one.
How much leverage you use depends on people’s risk assessment. Leveraging is riskier and not for everyone, it works for some and don’t for others, no need to compare yourself 
There is nothing wrong in talking debt as long as you don’t get over-leveraged and get bankrupt.
Anyone who ever gets bankrupt is mainly because they couldn’t pay back their loans. It’s never because their assets were valued less than before.
In summary - only take debt when you know what you are doing.
You most likely invest in stocks of companies who themselves use debt and you’d (rightfully so!) berate them if they did not use debt.
So why not use it more directly yourself?
Obviously there’s reasons not to, but your friends strategy is exactly what I have in mind (even more so with Swiss interest rates being so low). I’ve got my finger on the trigger for a significant market drop and am considering then taking a 200k loan to buy a certain stock, then write call options on that stock.
Let me add something in plain: Can you take a 100k loan and directly put that into the ETF market without getting the „Pro Trader Tax Status“?
Why is that? Doesn‘t it say in one of the five rules, that you should only use your own money?
Breaking a rule doesn’t mean you’re pro, it’s just a safe harbour.
As long as the interest you pay on the loan is lower than the interest and dividend income you’re earning from your investments, you’re not breaking that safe harbor rule. (And to be clear, even breaking a safe harbor rule doesn’t mean that you’ll be classified as professional trader.)
Jay, can you explain that in more detail?
Interest and dividends deriving from exactly that money from loan? Or from overall portfolio?
I think it is all debt together compared with the taxable income it generates. If total tax generating income estate divided by the generated income is higher than the debt interest percentage you are OK. Self occupied real estate therefor is included in this calculation.
Not sure if all Kantons handle that the same way.
I think professional trader status is not so common. Most people who have this status know that they are professionals
But if in doubt, you can ask Tax office.
Probably not such a good idea, never wake the sleeping dogs.
From the whole portfolio, as I understand it. It would generally not even be possible to determine which investment is paid with what money.
For reference, the exact wording from the Kreisschreiben Nr. 36 is
Debt and leverage are like nitro for an engine. Can make it go very fast but also blow up and/or burn.
Have you ever heard anyone going bankrupt without having debt?
No
Debt is a good vehicle to generate higher value. But one needs to learn how to use this vehicle before driving too fast
Does the Word „anteiligen“ change anything?
Yes, it does. I think unless your debt is lower than any taxable income generating value except stocks you are fine. You can argue that the debt is not for stocks.
Anyhow, if the total value of taxable income generating goods divided by the tax is higher than the debt divided by the interest you are fine. That is what “anteiligen” means.
And as mentioned, you hardly ever get taxed as a professional, even if you don’t adhere to all the rules. Just wait, don’t wake the sleeping dogs.
The stupidity of this plan is assuming he can identify the bottom of a crash as it happens.
So he’ll jump in as soon as the market drops 30%, with borrowed money. How long will his nerves last when the market
while the loan interest starts to increase and hurt?
I suggest he first read The Great Depression: A Diary by Benjamin Roth
My expectation would be that a tax office realizes that someone takes a 100k debt and two weeks later placing that amount into the stock market.
I don’t have a private loan, but I assume you would need to declare what you need it for, no?
Yes.
There are basically two situations: you’re either too poor or to rich to do this.
And for the rare person in between: stop playing when you won the game.
It is not on topic, but I do the same. Margin loans are at the top on market highs and the margin loans are down in bear markets. Just do the opposite and you are fine. Of course you need a strict plan, I use mechanical investment strategies with strict formulas for money management that includes margin loans.
In my dividend portfolio I only use margin loans when I take out money or in a bear market (needing spending money is a bad reason to sell), up to 150% meaning a credit of 50% in addition to the value. In my momentum strategy I always use margin loans depending on the actual state of the market. At market high the loan is limited to 150%, after a loss of 50% it goes up to 300%.
Don’t do that at home!
You’re right, and to add some colour: 30% drops don’t happen overnight, the largest single drop was in 1987 as you’ll know and it was 27%, when people are describing a market crash it’s in peoples’ minds that it happened overnight, while in reality it could take 1-3 years (!!!) to play out, all with “X of the best days of the market”, dead cat bounces, fakeout shakeouts, grinding sideways…it’s a shitshow! I spent some time going through the graphs from 2000 and 2008 to try to put myself in the shoes of someone going through it, I think it’d be super stressful at best, utter soul destruction if a loan is added on to that too.