[throwaway2037]

Nice link. Thank you to share. This notice bothers me a bit:

    > IBKR will assess a surcharge of 1% on large loan balances unless otherwise prearranged with IBKR. The 1% surcharge would apply to all balances in the highest tier.

I wonder what exactly "prearranged with IBKR" means. Call them up... "I need to borrow 50M USD, and pledge my Meta stock." Them: "Hang on. <muzak> Yeah, sure."

My guess, if the loan is large enough, the want to coordinate with their internal stock-borrow lending (SBL) desk to ensure proper liquidity.

<<(Not A) Shill Warning>> I am continuously blown away by the institutional-like level of services (and prices) available to plebs like me. IB is really built to grow with you: From the first 10K USD saved as a 25 year old, to a 50 year old with millions in liquid assets. I still cannot believe they don't have any minimum balance for individual account. Ref: https://www.interactivebrokers.com/en/accounts/required-mini... To be clear for other readers, that cost cannot be zero on their end. I don't know how it works, other than crazy levels of automation.

[beezle]

For many things, IB is great. Certainly if you are a futures trader it is very good, same for most equity/option trading. But for bond trading, expect a complete nightmare at tax time. Their "tax department" has no clue how to properly and consistently amortize bond premiums and quite honestly (personal experience) does not give a rats.

[throwaway2037]

    > bond premiums

Does this mean you are buying bonds with a price greater than 100%? If yes, can you explain why? On the institutional side, there is an allergy to premium bonds; they only want to buy at par (100%) or less, so normally the coupon rate is adjusted just before issuance to meet their needs.

[tomatocracy]

I think it's probably more about hedge funds etc where they will negotiate bespoke terms/pricing across the board (including assessing risk which at that level might partly be based on track record, identity of the underlying investors, strategy etc).

[beezle]

Once the amounts get lumpy there needs to be complete assessment of counterparty risk (you). IB can't assume that you are only borrowing from them and that the collateral in your account won't first be liened by another party, etc.