Author Topic: Securities Based Lending  (Read 2261 times)

bci23

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Securities Based Lending
« on: October 08, 2017, 04:22:52 PM »
Does anyone have experience borrowing/setting up a line of credit secured by their stock portfolio? Curious to hear anyone that has done this and what went well, didn't go well? Which company did you go through and would you recommend them?

 

 


aws

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Re: Securities Based Lending
« Reply #1 on: October 09, 2017, 02:25:09 PM »
Unless you're doing this with huge amounts of money and stocks that are definitely going to be locked up for years anyway it's probably easiest to get a margin loan instead.  You would maintain liquidity and still get a low interest rate if you use a broker like Interactive Brokers where the rates are just the fed funds rate +.25-1.5%.  That's where I have all my money and I can take a loan against my assets whenever I want up to the full amount of margin maintenance, pay it back whenever I want, and pay no fees except around 2% APR interest. 

If there is a benefit to a securities based lending account that goes beyond what you can get with a margin account I'd be interested in hearing about it, but I can't really imagine what that would be.

thepupil

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Re: Securities Based Lending
« Reply #2 on: October 09, 2017, 03:23:22 PM »
I fund my living expenses with put protected hedged Berkshire. Interactive Brokers, portfolio margin, hedged to not get destroyed in a broad drawdown. Not sure if there's anything better.

DTEJD1997

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Re: Securities Based Lending
« Reply #3 on: October 09, 2017, 10:23:43 PM »
The only time I've heard of this working well is when it is with pre-IPO shares or stuff that is locked up.

I think in the USA, the only game in town for this type of thing is Interactive Brokers.  All the other brokers simply charge too much to make it of much use to retail investors.


bci23

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Re: Securities Based Lending
« Reply #4 on: October 10, 2017, 11:00:15 AM »
Unless you're doing this with huge amounts of money and stocks that are definitely going to be locked up for years anyway it's probably easiest to get a margin loan instead.  You would maintain liquidity and still get a low interest rate if you use a broker like Interactive Brokers where the rates are just the fed funds rate +.25-1.5%.  That's where I have all my money and I can take a loan against my assets whenever I want up to the full amount of margin maintenance, pay it back whenever I want, and pay no fees except around 2% APR interest. 

If there is a benefit to a securities based lending account that goes beyond what you can get with a margin account I'd be interested in hearing about it, but I can't really imagine what that would be.

Almost all stocks I hold are not marginable hence my question. Sucks things are for the most part so black and white with a margin account, i'd be looking to get borrowing capacity of only 10% of the value of my portfolio.