Anyone using Limited Margin at Schwab (IRA)?
Anyone using Limited Margin at Schwab (IRA)?
Hey Folks,
I'm interested in Limited Margin in my IRA so I can get out of some legacy MF shares that I naively transferred into Schwab, and I was just wondering if anyone here uses it, if you've encountered any gotchas, etc.
They want me to fill out a paper form, which I'm loathe to do just to try this feature out, but love to hear your experiences on whether it's worth the effort. Thanks!
I'm interested in Limited Margin in my IRA so I can get out of some legacy MF shares that I naively transferred into Schwab, and I was just wondering if anyone here uses it, if you've encountered any gotchas, etc.
They want me to fill out a paper form, which I'm loathe to do just to try this feature out, but love to hear your experiences on whether it's worth the effort. Thanks!
Re: Anyone using Limited Margin at Schwab (IRA)?
Might this be a case to use leveraged ETFs to temporarily increase exposure while cash is settling?
Re: Anyone using Limited Margin at Schwab (IRA)?
Hehe - you still need some upfront cash to buy 2x or 3x products
Never been much of a fan for MFs - for their Dividends/CG leak (I know VG mostly minimizes these). We’ve been mostly ETF buyers/holders over 15+ years. ETFs have limited CG/Dividends— and easier to port (between Brokerages). Also, lot easier for securities lending and for accessing margin (hardly recommend it, nor using margin though !!)
Re: Anyone using Limited Margin at Schwab (IRA)?
Here is a guide from Schwab on margin.nalor511 wrote: ↑Mon Nov 22, 2021 1:08 pm Hey Folks,
I'm interested in Limited Margin in my IRA so I can get out of some legacy MF shares that I naively transferred into Schwab, and I was just wondering if anyone here uses it, if you've encountered any gotchas, etc.
They want me to fill out a paper form, which I'm loathe to do just to try this feature out, but love to hear your experiences on whether it's worth the effort. Thanks!
https://www.schwab.com/public/file/P-4193744
I’m not sure what your hesitation is about the margin paperwork. The real question is whether the leverage will pay off which is impossible to know. The margin cost is definitely a drag on the account performance.
"I started with nothing and I still have most of it left."
Re: Anyone using Limited Margin at Schwab (IRA)?
How will using margin allow you to get out of legacy mutual funds? I don't understand the connection. What am I missing?
"Pretired", working 20 h/wk. AA 75/25: 30% TSM, 19% value (VFVA/AVUV), 18% Int'l LC, 8% emerging, 25% GFund/VBTLX. Military pension ≈60% of expenses. Pension+SS@age 70 ≈100% of expenses.
Re: Anyone using Limited Margin at Schwab (IRA)?
What is "MF" and why would you need margin to sell them?
Re: Anyone using Limited Margin at Schwab (IRA)?
Re: Anyone using Limited Margin at Schwab (IRA)?
I was thinking if the OP had anything else in their account that would settle within T+2.
Actually, wouldn't a MF sell settle within T+2, in time for the ETF buy (as long as you didn't overshoot), or would it take longer for external MFs? Or does Schwab not let you trade with unsettled funds like that?
Re: Anyone using Limited Margin at Schwab (IRA)?
I have not been able to trade with unsettled funds thus far, I placed a test MF sale and my unsettled funds balance did not increase000 wrote: ↑Tue Nov 30, 2021 3:50 pmI was thinking if the OP had anything else in their account that would settle within T+2.
Actually, wouldn't a MF sell settle within T+2, in time for the ETF buy (as long as you didn't overshoot), or would it take longer for external MFs? Or does Schwab not let you trade with unsettled funds like that?
Re: Anyone using Limited Margin at Schwab (IRA)?
Are there fees for selling the mutual fund? If not, why not pick a number, e.g., $1000, transfer that amount of cash in, and then sell $1000/day, using the cash to buy before it settles? This obviously isn't feasible if $1000 is a small amount of money compared to what you're trying to get out of.nalor511 wrote: ↑Tue Nov 30, 2021 3:54 pmI have not been able to trade with unsettled funds thus far, I placed a test MF sale and my unsettled funds balance did not increase000 wrote: ↑Tue Nov 30, 2021 3:50 pmI was thinking if the OP had anything else in their account that would settle within T+2.
Actually, wouldn't a MF sell settle within T+2, in time for the ETF buy (as long as you didn't overshoot), or would it take longer for external MFs? Or does Schwab not let you trade with unsettled funds like that?
Re: Anyone using Limited Margin at Schwab (IRA)?
In case anyone wondered, Limited Margin at Schwab does not work for transitioning from Mutual Fund to ETF without being out of the market. I placed a sell in dollars for$100MF and was unable to create a buy for $100ETF. Oh well.