Which broker do you recommend and negative interest rates

Hello everyone, This is my first post here. I found some really interesting things, I hope I can get some advice and in the future with my experience help other too.

I’m in my 50s, I live in Switzerland and the last time (ten years ago) that I invested in the stock market it was with Swissquote (I had really great experience). From then I missed the 10 year bull market but I kept on saving, and I have now the intention to retire early and live off my savings.

I’m looking to trade options, especially on Swiss and UK stocks, starting by selling puts on stocks that I eventually will want to own, then when I possess them for the right price I’ll use covered calls.

As my first choice I have IBKR, I’ve been testing their platform (paper account) but I really find it’s not user friendly, but its pricing is top.

First question is, for individual investors like me with nearliy 2 mln Swiss francs to invest/trade is there anything better than IBKR?
Unfortunatelly Swiss banks are really expensive, and the Swiss stamp tax is crazy.

Second question is more to do with negative interest rates on cash held in a cash account.

IBKR has negative interest rates on over 100k held in cash in Swiss francs, but when I sell put options (monthly expire) and the cash I have is blocked as collateral do you think it will be considered as cash not invested so taxed with negative rates or is cash used as collateral seen has “invested”.

I’ve sent an email to IBKR but I’ve had no answer yet.

Can’t wait for your feedback.

Cheers from Marco


yes, but nothing stops you from only moving junks of less than 100k until your puts are eventually exercised. Or you just convert the cash portion into USD which afaik still might give some interest.

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Hi Marco
-I am a buy and hold investor and IBKR is my broker. I did not find a better offering. In the past I have used them to write puts to open positions on US stocks and ETFs and it works fine (as well as the occassional covered call to exit positions I no longer wanted). I don’t have experience with options on UK or CH stocks.

-I find the webportal and phone app ok to use and better than SQ. The main inconvenience is the process to transfer in /out cash which feels like it has been put there to test if you are really serious about opening an account, but you have to learn it once. When I opened my account I remember it pushed me toward the TWS program, this is complex and seems to be targeted more at “pro” traders and I never use it

-Yes, I assume they will apply negative interest on your positive cash positions >100k so perhaps you don’t want to transfer all your cash at once

-My watchout is customer service and inflexibilty in case something goes wrong. I was recently been put on hold 1 hour until the line timed out which got me thinking what happens if there is a cyper attack etc. At one point I may switch to a local bank and accept the higher fees

I know you did not ask for advice on this but I am curious why UK and CH stocks? Going from cash to options seems a big step too. Do you have an end goal asset allocation in mind that you are trying to build up to or you plan to be a trader?

There are some tax risks on using options in CH, if you do it too much you can be deemed a professional investor and have to pay tax and social security on capital gains. The risk is low but I mention it since you say you have 2mln

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Hi Barto thanks for your answer. To begin I have to say I’m a novice at trading, I’ve done in the past but just buying and selling stocks as a long time investor. I’ve been doing forex but I never got into options trading, but for my strategy it seems a good choice. My end goal is to sell put options on stocks that I want to own, but not at these crazy bubble prices. I was going to wait until prices come down, I’ve been bearish since 2011 but I missed this great bull market. I’ve stopped working and now I need an income, so my Idea is to sell put options and then buy good dividend stocks on Swiss and UK stocks, purely to simplify my tax compilation, because from my understanding it’s somewhat complicated to get back the witholdings tax in other nations. Since the UK doesn’t have any WTH taxes, and it’s a market I know well I feel more confident in investing there. Once I own the stocks I’ll get income from dividends and covered calls. This is more or less my strategy. Unfortunaltely if cash taken as collateral is not considered invested and I have to pay negative interests then this will make my strategy wothless! I’ve been doing some testing in paper account and with my savings of over 1.5 mln Chf selling puts on monthly basis I can earn (in theory) around 7k a month. Obviously I would start with 100k just to see how easy or difficult selling options is, because theory is one thing reality is another.

Might be worth considering what the odds are that your stock picking/market timing will beat the market compared to a very simple equity strategy.


So if cash held as collateral when selling puts in a cash account is “taxed” wth negative interest rates, and my strategy would only work if I sell around 1.5mln chf, wouldn’t it be better to start using a margin account and the switch to a cash account once I own the stocks. I suppose I could open 2 account, one margin and one cash and switch between them, but I’d have to check if this would work better!

When I sell puts, I’m choosing a strike price that would need a pretty big monthly correction for the contract to be exercised! And even if I end up owning the stocks I’m ok with it, it would still be part of my strategy. Unfortunately I need an income stream from my savings and there are not maby risk free alternatives outhere at the moment!

Technically I doubt you can get a risk free alternative that’s significantly different from the risk free rate (-0.8%), if it’s much higher it probably isn’t risk free (so make sure you understand what the risks are).


Thanks for your time. Unfortunately my strategy for income (that I need) needs at least 1.5mln chf being put up as collateral when selling puts to generate enough income for me to live on. Obviously if it is taxed with negative interest rates it would make my strategy worthless. I was thinking that maybe untill I sell puts I could use a margin account, and if a contract gets exercised I would move the shares in a cash account to then sell covered calls on those stocks, but I havn’t looked into these yet. Maybe it wouldn’t work either!

Can I ask your opinion too. Another member above stated that even cash blocked by the broker as collateral, above the 100k chf I would need to pay negative interests of 0,75%. Do you also think it is so? I would think that at least the money used as collateral when selling puts would be exempt from that.

Hi Marco, you need enough collateral on your account to cover the cost when the option is exercised. For US option contracts, the option can be exercised by the other party before expiry date. I am not sure if the same applies for UK and CH option contracts but in any case if the prices move and you don’t have the colletaral you are likely to get a margin call from IB before expiry date (=forced liquidation of the positions at a loss)

Hi Barto. Yes I know that, but I would have thought that the money blocked by the broker as collateral (in a cash account) would not be charged by interest rates! A member above stated that in his opinion even cash blocked as collateral is charged with negative rates over 100k CHF. I was thinking of selling every month (if the contracts don’t get exercised) around 1.5mln CHF but and I would get a return of minimum 5k a month (for the strike prices I choose) but If that 1.5mln gets charged with - 0,75% that is a huge amount every month (around 1k CHF a month).

Haven’t been in the exact situation myself, but yes, generally cash collateral will still be facing interest. That was at least the case ages ago with positive interest, and I assume it’s just the same in zero/negative interest times.

But also out of interest: Why are you planning to go from all cash to all-in with cash covered puts? That is a very substantial change in your risk profile, especially if you plan to use >75% of your net worth as collateral that can go wrong very easily. If you need CHF 60k a year to live, that can be achieved with your net worth much, much easier and safer with traditional investments.

Also, where do you have that cash now? Are you not currently facing negative interest?


Was just about to ask as well…

Why not keep the majority of it in “traditional” simple instruments, and maybe use smaller portions for playing with writing put options.
Until you feel comfortable and knowledgeable enough for larger amounts at least.
Be careful with acting out of FOMO (due to missed past decade).

You can easily “generate income” with dividends and selling some parts of your ETFs for example.

SNB policy penalises cash. I can’t think of a way to hold cash as collateral and avoid the interest.

Regards your strategy, sorry so say it but I am not sure that selling puts is a valid long term solution to earn revenue, especially as you state you are a novice.

I am doubtful you could consistently earn 7k a/month on 1.5M by selling deep out of the money puts. Even if you were succesful that is 6% per year which is lower than the historical, long term return on a portfolio of stocks

If you are not working, if you trade options and it becomes your main source of income it is probable you will be viewed as a professional investor and have to pay income tax on any gains you do make and possibly social security too

For non CH residents or employed folks, selling puts can be a valid strategy to open long stock positions at lower cost. As a long term strategy to continuosly earn an income from a cash position there is no free lunch.

If you are looking for advice how to best earn income from your savings, I am sure plenty on this forum will be fortchoming with opinions if you share more details on your spending need /yr and your assets (cash / 2 Pillar / 3 pillar / property etc)


Hi, thanks for your comment. I’m just leaving my job to retire early and since I have enough savings to generate income for my personal needs I was thinking to differend ways to generate income. Before going all in the stock market I’m waiting for a good correction, but since it could take a while and since it’s difficult to time the market, I thought a good strategy was to sell put options on stocks that I would like to have in the future, speculating on the fact that the contracts would not be exercised, at least until the price is good for me. I’m choosing strike prices well below it’s value so I would keep the premium every month. Obviously I have’t tried yet in real-time but only in paper account so it’s all a theory now. I wanted to open a cash account a trying it out with 100k. But knowing that over 100k I’m charged negative interests it doesn’t make sense anymore. I know that there are many other strategies but I’m feeling unconfortable with prices out there now, and I truly think it’s mad going in now with record high market.
But I’m probably wrong.

I know there are lot’s of ways to generate income but finding good ROI is really difficult now. I really wanted to keep it simple and just buy a good chunk of high yeald div stocks and some etfs but as I’m with those investors feeling there will soon be a correction, in the mean time I thought that selling puts on stocks would be a good way to generate some easy income. As I said I have yet no real life experience in options but now that I know that my cash would be subject to negative rates it doesn’t make any sense!

I personally bought stocks in february, march and may and real estate funds every month from january to may. I will also participate fully in a capital increase this month. I think there is almost always oportunities on the market.

Yes it’s true, but with every strategy you should feel ok with it. I thought I found a good strategy (in theory) that I wanted to try in real life and not in a paper account but it seems I’ll have to think otherwise. Thnks for your feedback

If you fear a market downturn, just choose your asset allocation accordingly. But there can always be a downturn, not just after a long bull market and not only when you expect it. So you should choose an allocation you feel comfortable with. You could also do dollar cost averaging if that would make you feel better.

Diversification is to only free lunch in investing. So why not find out a good asset allocation and choose a broadly diversified portfolio?