Margin buffers and interest rates - Aussie Stock Forums

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  1. #1

    Default Margin buffers and interest rates

    I currently get the following deal from Avcol:

    $28 a trade
    OCH + 30% buffer
    OCH current RBA rate (5.25%) less 0.5% commission = 4.75% on margin position

    I was contacted by Halifax who offered:

    $60 a trade
    OCH + 20% buffer
    OCH current RBA rate (5.25%)

    Since my margin is around $80k the interest added is around $34 a month. Also instead of a $24k buffer I only need $16k.

    But Im sure someone can do better. Rivkins use to give OCH + 0% before they bumped it up to 30%.

    Do any of you know of a broker offering a better deal?

    I dont want to pay any buffer because my combined positions will be risk free.


  2. #2

    Default Re: margin buffers and interest rates


    If you keep using your increased equity to take more trades(Maximising leverage) then the Buffer would still be required.
    You could simply use the equity in your holdings to be used as security thus releasing cash.
    Just means that the amount youd be given on margin would reduce.
    I personally place an amount each week into the loan to increase my available funds.

    The interest rate you have is better than any Ive seen.
    So is your Brokerage at $28.
    If your doing only a few trades a month using a long term method then the extra 10% on buffer maybe benificial.
    But if shorter timeframe then $ 60 maybe a killer.

    But then ofcourse you know all that so in answer to your question.


  3. #3

    Default Re: margin buffers and interest rates

    yes aware of all that thanks

    I realise I wont get more than 5.25%, but what I am after is no buffer.

    I will pay through the nose for brokerage if I can get OCH + 0% and 5.25%.

    just to compare......comsec wants $55 a trade plus och + 50%.....mahahaha


  4. #4
    Rotaredom wayneL's Avatar
    Join Date
    Jul 2004

    Default Re: margin buffers and interest rates

    IB's option margin requirements.


    commission $1.00 per contract (US contract is 100 shares)



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