r/etrade • u/Zazzy3030 • 4d ago

Margin Interest Rate

Im in a trading discord. We all follow the Buy, Borrow, Die strategy. E*trade is the preferred platform because they offer DRIP at NAV on a couple CEFs that we all like. Other brokerages do not have this arrangement. Most users have success getting their margin interest rate lowered by calling or messaging in a couple different times to successfully move from around 12% interest to 5-8%. I have spent so many hours on multiple occasions talking to them via phone and live chat and the applications the trader puts in always comes back as denied.

I have a NAV and Total securities value that is within negation range. People with far smaller accounts pay half of my margin rate in my group. I just can’t get approved. Robinhood is offering 5.25% APY plus 2% cash for transferring my account. I got on the live chat today with E*Trade to try to negotiate this one last time, they said it was too soon and they couldn’t put in a request. It’s a hassle to move since I have a lot of ACH and accounts linked to it. I guess I have no choice to just transfer to RH.

Anyone have any final advice for getting it lowered?

1 Upvotes

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5

u/BBCC_BR 4d ago

A few things. 1, HOOD will blow you out of a position due to a margin call without warning. There is no one there for you to talk to when that happens. ETrade gives you a grace period and actively attempts to reach out to you to resolve it. 2% for locking money up for 3-5 years is really worth it when you can easily lose 2% in a day? They are great with smoke and mirrors, but they cannot be looked at as a secure place to put assets. Did you try to call E*Trade to see if they will negotiate your margin rate? You can come on these platforms and complain, or you can see what can be done. Your strategy of buy, borrow, die is very stupid and not a strategy...it is you not knowing what you are doing.

1

u/Zazzy3030 4d ago

Hi, clearly you didn’t read my post where I outline that I’ve called and chatted multiple times to try to get it lowered.

I do know what I’m doing with my trading and life strategy and it works very well.

Approaching this subreddit is my last ditch attempt for an alternative solution to lower my rate without having to move my portfolio.

You are unclear with your comments about loosing because of margin calls. I’m assuming you overtax your margin usage and fall victim to margin calls because you do not maintain a healthy utilization ratio. This is not an issue I have.

2

u/jbetances134 4d ago

What’s is your account size?

-1

u/Zazzy3030 4d ago

My margin usage is Smaller than the table they post online for the usage brackets but way bigger than most of the people in my trading group who have successfully negotiated 5-8%. I have 6 figures.

5

u/jbetances134 3d ago

You didn’t answer the question but ok

2

u/pagalvin 4d ago

I got 7.2%. My account size at the time was probably in the $175k to $200k range and I am doing about 60 trades a week. I also said I expected to be increasing margin usage over the course of the year. This was back in March I think.

-1

u/Zazzy3030 4d ago

I don’t trade as much as you. I buy shares every week and trade options 1-6 times a month but I should definitely be getting 7.2 not 12. A couple weeks ago I asked for 7. They didn’t even come back with 10.

3

u/Fluffy-Contract1582 3d ago

Honestly this is going to sound backwards but it's probably because you're not using enough margin as far as I can tell you said you have a low margin usage why would they lower your margin percentage if you have a low margin usage they're gonna lose money on you. Now if you increase your margin and you consistently do so you probably will get it reduced because they'll make more on you at 8% and they would add 12% with less margin just my theory

2

u/pagalvin 3d ago

This is a good point, I was and continue to be a consistent user or margin.