The only good tip of your broker is a margin call…
BTW: Interactive Brokers sells automatically, no margin call. But you can define which stocks in which sequence have to be sold.
Now, other more expensive brokers often do not even issue a margin call until practically all money is gone. It is good business for them, high fees.
Anyhow, IB gives you 800% margin when on portfolio margin. And that is suicide with stocks. Probably with anything, not only stocks.
I get notifications[$] about margin increases for (some) stocks I hold at IB, but I guess that’s technically not a margin call (and since I don’t have any leverage, I don’t understand why they even send me these notices – I guess I could unsubscribe from them).
$ E.g. for my PAX position:
It is just an implementation detail. What matters are outcomes. And I think, I have shown to a sufficient degree, what those are.
Of course, you can mismanage your portfolio. Stock picking a scamer’s reccomendations vs. your local bank’s fund vs. a Vanguard one also has consequences.
Also, there are instruments that don’t suffer from liquidation. And at low leverage factors, even highly sporadic management won’t end in margin calls.
Is this some kind of social engineering? Writing off-topic nonsense against facts to provoke some kind of reaction? Sorry, I am out…
0.5% excess financing for leverage seems particularily low to me knowing we are talking USD. Especially if CASHX (3 months T-Bills) manages to roughly match inflation on rolling 45 year periods (meaning interest on those bills was more than 0.5% at the very least).
Putting the financing rate at 2% gives some rolling periods where leveraged portfolios have worse returns than the unlevered one (which is not what one would expect when taking leverage. More risk, yes. Less returns over 45 years?).
Of course, we could assume that, going forward, short term interest rates in the US are going to be near 0% and inflation low but that wouldn’t be my personal assumption.
I may have misunderstood your approach, in which case, I’m happy to be corrected.
You can get them yourself with box spreads, on IBKR margin (with enough money), and futures. 1% is reasonable for retail around 100k net assets.
Probably not back in 1900, though.
I can’t find those rates on IBKR regarding USD:
I tend to quickly and dirtily use inflation adjusted returns in USD to simulate returns in CHF with low inflation, I don’t know if that’s what you have done here since your data is in inflation adjusted USD.
I’m not sure how testfol.io calculates it but I doubt that when forcing a specific rate for the financing, that rate is also inflation adjusted. To my understanding, your simulation assumes 0.5% cost for USD cash every year of the 45 years period for all rolling periods.
That would not have been true. Rates would have been higher with higher inflation as lenders would have wanted more returns to compensate for it. By comparing nominal (without inflation adjustments) and real (inflation adjusted) rolling returns for CASHX, at a very quick glance (I’ve only taken the first year, 1980 and 2025), YoY inflation during those periods has been between 1.6% and 3.9%. I doubt lending rates in USD have gone far under those values.
At the very least, 3 months TBills managed to give interests close to inflation since their rolling returns oscillate near 0% in the inflation adjusted chart (between -1.16% and 1.69%, actually). I’d expect lenders to want to make at least as much money with an investor as they would lending money to the government.
It’s excess financing cost, not total.
IBKR is benchmark (the short term rate) + 1.5% excess up to 100K, + 1% for everything above that and + 0.75% above 1 million and + 0.5% for an obscene amount no one here will ever have.
Box spreads will easily get you below 0.5% excess.
Ah, I see the problem. Excess financing rate is not the same as financing rate. In my simulation, I borrow the total return of USD cash-like securities (e.g. CASHX), then I add an excess financing rate to that position (e.g. 0.5%).
To see IBKR rates, frst you can scroll down on their Margin & Financing Rates page. They have a huge list containig all rates for all currencies and amounts you can borrow from them. Per currency there is a benchmark rate (BM) plus their spread.
Now, their BM does not strictly follow any other index (e.g. ultra-short-term treasuries). You can see how they are calculated at “Methodology for determining effective rates”. But basically it is anchored to an external market rate, capped above and below. And that cap is ±0% from the “Fed Funds Effective (Overnight Rate)” for USD at the moment.
The same BM is used in other interactions with IBKR. It is the same for giving them money, or short-selling. BM plus or minus some defined spread.
Edit: Ninjad by @Tony1337
Thanks both for your explanations. It does make sense to me now.
Do you think it would be a good idea to buy the ‘‘SGOV’’ (0-3 Month Treasury Bond) ETF ? I have US dollars in IBKR that I don’t want to invest in stocks at the moment.
When the cannons sound you have to buy stocks.
SGOV is cash and cash is trash. The only investment with a state guarantee to lose value. In fact money is just a promise and when political circumstances change (like right now) this promise may become worthless.
I prefer (and that sounds very stupid) to lose 50% on stocks of good companies because I own something real. And last time I lost 50% I made 400% afterwards.
This said, I prefer the Dollar to get stronger, as my debt is in CHF. I don’t look for tops or bottoms, but maybe I did hit the bottom when buying Dollars…
From my point of view, it’s awful not to have a minimum amount of cash to seize opportunities. And I wonder if that minimum amount of cash is better invested in SGOV than just in a simple IBKR account.
“When the cannons sound you have to buy stocks” < “it’s when blood flows in the street that opportunities arise”.
It could happen. Trump could tank other economies making USD stronger in comparison. Invade Greenland here, tariff Switzerland’s pharmaceutical companies there…
No, actually long term it is not. The interest difference is bigger than the capital gain/loss long term. But actually I wanted to slowly move my debt from USD to CHF because soon I will no longer be able to deduct the debt interest from tax. But then the Dollar fell under CHF 0.79 and I could not resist. My debt interest went down like 75%.
No, it is not, just put on margin debt in a contrarian way. And I do not use a minimum amount but have a limit of 300% margin multiplier depending on the bear market. There is no better time to make an incredible and risk-adjusted gain in the stock market then a bear market, good companies at discount price. That is when everybody sells…
You’re talking about different approaches to the same goal: buying at a discount. Perhaps yours is more ballsy: taking on debt to do, while the other poster’s is more conservative: holding cash on the side to do it. The finance eggheads will say “ACKCHYUALLY buying the dip is stupid” and “you can achieve the same leverage with margin as with a LETF”, but many regular human beings hate the idea of debt, or (chance of) going into negative balance. And does anyone want to be the guy below?
Many do, I consider SCHD and CHDVD to be my “bonds” which factually it’s completely wrong, but my care for others’ opinions is about 0 Kelvin 
I think taking taxes into account, the USD + interest basically always lost/loses against the CHF over most timeframes. Would need to check this first though, definitely has been the case the last 5 years.
If 30% of your 4% interest go to the tax man, it‘s not so nice anymore against 0% tax from CHF.
If you have cash, indeed BOXX or similar MMFs will be better than letting them sit around.
In the meantime, following have been incentivised and is close to conclusion
I think with all the drama , share of US trade in global trade will keep reducing. Somehow all this drama is helping others to get their act together. Yes US have means to cause pain but maybe time will reduce it’s importance
I hope somehow Digital Euro also gets going. In India UPI is largest payment system now processing more than 20 Billion transactions per month while Visa lost 60% of its volume (over 5 years). So its definitely possible to have a home grown competitive payment system.
You made it look like conspiracist were right 
