Margin Loans Brokerage fees and Margin Loan

Hi All

My broker is charging exorbitant brokerage fees on my margin loan trades ($100 or 1% which ever higher). Especially considering that I am not really relying on any advice from him.

Is there any way I can trade from my margin loan, but not doing so through the broker at the same organisation? The reason i would like to stick with this margin loan is that I have an attractive discount to the market interest rate.

Cheers
Tom

 

whos the provider of the margin loan (ie who do you get your statements from?)

 

Its Bell Potter Capital. Not sure who, if anyone, is behind them.

 

Setup an ETrade account ($550 brokerage free), which gets you at least 10, maybe 20 trades.
Buy through this, then ask Bell Potter to bring your ETrade holdings across. This should cost nothing.
Selling is a different matter.

 

I am seeking to utilise the leveraged portion of my margin loan ( ie no cash of my own).

With Etrade, you must use funds in your etrade account to trade with? Or can you point them to your non etrade affiliated margin loan account to get the funds from?

 

I'm not sure, but I'd expect that since you have 3 days to transfer money to ETrade ("T+3" ASX system) you could BPay or nominate the ML account (assuming it's got a BSB and account number that's accessible for withdrawals).
Sorry I can't help you precisely.

 

Hi Alaka,

Contracts with your stockbroker to margin lender settle Delivery vs Payments via CHESS. You can read about settlement here Settlement process for the Australian Securities Exchange

I won't bore you to tears about the exact mechanics but basically when two dvp messages (101 messages in CHESS) match stock code, dollar amount, trade date, settlement date and naturally counterparties then the trade is scheduled to settle on the settlement day at 10:30am (standard business days).

Delivery vs Payment (DvP) transactions are completed by the ASX on each settlement day and last approximately 2 hours depending on the number of transactions settling. Usually on T+1 trades are novated which netts out all the trades to one position per stock. Ie, either long of short with a dollar amount rather than 10 trades being buy or sells.

I hope this has helped scratch the surface on settlements for you.

Warm regards,

Dan

 

Thanks Rod and Dan, Ill contact an online broker and find out if they could do this for me.

 

might be worth telling us ur margin interest rate to see if the screwing around is worthwhile.

It would prob be easiest to set up a margin loan with someone else (etrade/comsec) trade away and then transfer them over and consolidate the loan and investments to bell porter..

other opition is to take a cash redraw out of the account and use the money... wont help ur lvr though

 

Its currently 9.15% which looks fairly good in the current market

Unfortunately im at the stage now of not wanting to invest any more of my cash, but rather rely on geared equity in the margin loan for future trades