I’ve just took out 20k CHF to pay the taxes, which will be automatically re-payed in the next 4 month with my monthly investment money. Had it the next business day in the CHF bank.
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Lets assume I have 100k in VT at IBKR and a 0 cash position.
If I take out 25k:
100k VT
-25k cash
Market now crashes by 50%:
50k VT
-25k cash
As RetT margin requirement is 50% overnight, I’m at the limit here? No further correction allowed? Despite still having 25k net?
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That’s how I count it.
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I’m not sure that’s how RegT works actually.
Here’s how it works, IIRC:
- The 50% overnight is at the end of the purchase day, it’s the “initial” margin.
- From the second day onwards, the maintenance requirement is 25% (at least for long stock positions).
If you were allowed to buy up to 50%, and the maintenance requirement was 50%, any decrease in portfolio value would cause a margin call. The difference between the 50% and the 25% allows for some leeway.
The comment on this post explains it. But I’m not an expert, so I’m happy to be corrected if I’m wrong.
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Not a specialist either, but I had a look at it.
Initial margin is a requirement to open a position, overnight is to keep it overnight 
During the day. IB applies RegT requirements overnight. If you are on RegT margin.
At the end of the trading day, IB applies the Regulation T initial margin requirement.
And as always I am happy to be corrected.
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Ok this is where it’s really confusing. If you look at IBKR’s website, it is actually… “Reg T End of Day Initial Margin”. That’s why I looked into it and found stuff that support my interpretation… but I’m not sure 
Nice idea! Might do the same, I save in a separate pot in my bank, no interest (IB would give me about 1% currently), so will at a minimum, save that amount into IB and get the 1% interest. But, might try investing that and use Margin to withdraw and pay for my taxes.
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I’m not sure to understand what you want to do, but at the moment CHF interest rates at IB are 0% up to 50k, and negative above that amount
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I meant convert to USD. Obviously lose in tansaction costs and currency risk
That’s some very substantial risk, considering the interest rate differential is >1% afaik.
Not a bet I’d take with my tax money…or any other money for that matter
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How exactly did you do that? Did you just make a wire transfer to your bank account for a CHF amount greater than your cash balance?
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Yes, it works like that
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Yeah, I was just not sure whether you need to like configure a margin loan somehow or if it is just as easy as transferring money and creatimg a negative position.
Yes with a margin account you will see two lines: amount available on margin & amount available in cash. IBKR then let’s you take out up to the amount available on margin. After the transfer the balance of the currency you take out goes negative.
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No, you just need account type: “margin” or “portfolio margin”.
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Now if it only was that easy, due to some technical issues I’m trying for hours now to change it to margin 
That takes afaik up to 48h
That’s not the issue, I either get an error that the request can not be submitted or an endless loop where I press continue and nothing happens. I already raised a ticket and they need to escalate it 
Just an update from my side, I was finally able to switch to margin (some magic over night resolved the technical issues). Transferred CHF to my bank account to pay taxes and around 45 min later it arrived. That’s awesome 
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Just don’t get tempted to use it for other purchases, the debt trap is real.
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