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Re: Margin Lending

I was looking at an ASX50 company awhile back the total volume it traded for the month for a particular installment warrant was less than the volume I wanted to buy. I also noted that the spread was quite large as well. Note that Installment Warrants also have a call option and the entire loan priced in, so that needs to be taken into account if you want to see if the warrant is fair price against the underlying share. I'm thinking of using Installment warrants to buy some solid bluechips when we have a major correction and just put them in the bottom draw. Aren't most installment warrants 50%?

I use Commsec for margin loans and found it great. I find that my portfolio on average allows a maximum lending ratio of around 68% (before the buffer). I keep my LVR at around 60% which is a good buffer. I'm of upping my limit as even during the October downturn my LVR never went above 63% before my stops kicked in.

I like the fact that as your position grows you can take capital out, without needing to sell. When I reach the size position I need, I plan to use this to draw a constant value out of the account monthly while keeping a constant position size and the LVR changing taking up the normal ups and downs in trading.

MIT

<blockquote data-quote="mit" data-source="post: 25307" data-attributes="member: 1435">Re: Margin LendingI was looking at an ASX50 company awhile back the total volume it traded for the month for a particular installment warrant was less than the volume I wanted to buy. I also noted that the spread was quite large as well. Note that Installment Warrants also have a call option and the entire loan priced in, so that needs to be taken into account if you want to see if the warrant is fair price against the underlying share. I&#039;m thinking of using Installment warrants to buy some solid bluechips when we have a major correction and just put them in the bottom draw. Aren&#039;t most installment warrants 50%?I use Commsec for margin loans and found it great. I find that my portfolio on average allows a maximum lending ratio of around 68% (before the buffer). I keep my LVR at around 60% which is a good buffer. I&#039;m of upping my limit as even during the October downturn my LVR never went above 63% before my stops kicked in.&nbsp;I like the fact that as your position grows you can take capital out, without needing to sell. When I reach the size position I need, I plan to use this to draw a constant value out of the account monthly while keeping a constant position size and the LVR changing taking up the normal ups and downs in trading.MIT</blockquote>

[QUOTE="mit, post: 25307, member: 1435"] [b]Re: Margin Lending[/b] I was looking at an ASX50 company awhile back the total volume it traded for the month for a particular installment warrant was less than the volume I wanted to buy. I also noted that the spread was quite large as well. Note that Installment Warrants also have a call option and the entire loan priced in, so that needs to be taken into account if you want to see if the warrant is fair price against the underlying share. I'm thinking of using Installment warrants to buy some solid bluechips when we have a major correction and just put them in the bottom draw. Aren't most installment warrants 50%? I use Commsec for margin loans and found it great. I find that my portfolio on average allows a maximum lending ratio of around 68% (before the buffer). I keep my LVR at around 60% which is a good buffer. I'm of upping my limit as even during the October downturn my LVR never went above 63% before my stops kicked in. I like the fact that as your position grows you can take capital out, without needing to sell. When I reach the size position I need, I plan to use this to draw a constant value out of the account monthly while keeping a constant position size and the LVR changing taking up the normal ups and downs in trading. MIT [/QUOTE]

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