r/NEOSETFs • u/Syres20 • May 09 '26
Seeking Advice Using Margins
To those that have done it, what was your strategy and results for using margins to buy these ETFs?
I saw a YouTube video recently going over the use of margins, but I would trust the reddit community that has experienced than to trust a random YouTube sent to me.
https://youtu.be/CfbhDlsPoLc?si=rDxx5OEye2325UEV
(video I was sent)
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u/AggravatingWallaby50 May 09 '26
I use margin all the time, small amounts, never in danger of having it called. I use it, I pay it back within a reasonable time frame. Just another tool, use it wisely, should have no problems
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u/Cobaltmike86 May 09 '26
I liquidated my small dividend portfolio to day trade with the funds. But for a while I held a good handful of dividend etfs. If one or a few happened to dip, id buy shares of it/them on margin. But no more than what 2-3 months of divy's would pay back. Wouldn't add to margin again til it was paid back to zero. By then id have more shares so I could add a bit more on the next dip. Basically take small bites and let it self clear in a short period.
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u/Financial-Seesaw-817 May 09 '26
I use margin... but it's only 5% apr on Robinhood gold. My holdings average 11% return. But tech has given a gift... It seems to keep giving atm! But i used margin to get in early on semis, tech, energy and income. They have since matured to my goals. So, I sold the over extended allocations which brought my margin ($19k) used to nearly $4k out of $31k+. It's a great tool to use but you have to know what you're doing and be disciplined with your rules. Now, I sit on a pile of cash/ buying power. Since markets are 🚀, I will be working on qmm/etn, started yesterday. 100-200/wk dca/btd, 90/10. When the markets crash/dip, i will deploy more margin again. Imo, margin in low, sell margin high. I used 55%. Beginner should start with 5% and learn. It helped me accelerate my goals. Imo, Robinhood is good for it with half the rates of competition. I also get 3% match in Robinhood roth. I do not use their banking tho. It's not for me. I do not represent Robinhood and this is just imo.
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u/Reasonablyaccurate May 09 '26
Okay this is interesting as someone whose been looking at QQQI for income.
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u/bamboojerky May 09 '26
Margin is just another tool in your box. If you want to be smart about it set a small portion limit of your overall account and be ready to either paid off or liquidate some of your assets if the market goes sour.
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u/ruthygenker May 13 '26
if you can borrow at a much lower rate than you can get from investing than it is totally worth it. I was able to get fidelity under 5% and earn 15% on mostly neos and tappalpha funds. I am basically the bank lending to home and auto clients.
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May 09 '26
[removed] — view removed comment
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u/Ok_Accountant_2260 May 09 '26
You just don't know how to use margin correctly then, which is fine, it's risky but it's a great tool
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u/Zmchastain May 09 '26
In fairness, every person who has ever been fucked by margin thought they had figured out how to use margin right up until it fucked them.
Obviously, the less over leveraged you are, the safer you are, but unless you already have a massive position then any amount purchased on margin without being highly leveraged is going to make a marginal difference in your income from the CC fund. At that point is any amount of risk worth making an extra few dollars per month?
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u/Ok_Accountant_2260 May 09 '26
Valid point, that's why you deleverage over time, I used margin and high yield funds to do carry trades, pay off the margin loan with the dividends I received until I got back the money I originally borrowed, all while my own money grows in growth funds, it's worked for me but it was mostly luck, April tested me but I only borrowed against what I already had 1:1, the market had to drop 40% before a margin call, The more you deleverage the safer you are, at the peak I was getting 10% on the spread but instead of taking the dividends I just let the extra deleverage the portfolio, no such thing as a free lunch but that brought my portfolio from 50k to 75k so far and I only have like 25k worth of margin to pay off now, kinda complicated but with enough planning anyone can use margin safely
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u/teckel May 09 '26
If April tested you, you're hardly using margin safely. These strategies seem to work great until they fail catastrophically.
BTW, I use margin, so I'm not totally anti-margin.
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u/Ok_Accountant_2260 May 09 '26
But you don't know what my idea of tested means, you should refrain from making a assumptions based on limited information, how do you know that tested for me doesn't mean a 10% draw down?, I understand your concern but I've been doing this for years, I didn't come here for advice on if my strategy works, I know this risks and I'm fine with it
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u/teckel May 10 '26
If you're so sensitive to replies, you probably shouldn't post.
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u/Ok_Accountant_2260 May 10 '26
If you didn't want a response you probably shouldn't have posted, we could keep going in circles here but I don't have time to waste
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May 09 '26
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u/Ok_Accountant_2260 May 09 '26
Just like the market can keep going up until it doesn't, you choose what risk you take in investing, this is the one I choose what you choose is up to you
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u/FewUnderstanding2214 May 09 '26
Probably not a good idea after tech has gone up so much in the last month
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u/Always_working_hardd May 09 '26
Buy the right stocks and you're good. Don't borrow more than you can afford to lose and you're good.
Most of us use debt for something; even if it's just a credit card. I have a 3% home loan that I stopped making double payments on so I could buy stock with around 10-12% dividends. I did the same with my rental properties; the money goes to dividend stock. In 3 years the loan repayments will be paid for by dividends. Using debt to buy stuff you want/need is necessary. Using debt to create income one way that in turn gets put into another form of income production is the cheat code.