How to do an SBLOC at Interactive Brokers (IBKR)

[@venkateshsanklapur4874]

Hi Sharon, this was the best tutorial that I saw which was so simple and to the point. I feel IBKR help desk should use it when they are trying to help people like me

[@sharonwinsmith]

Thank you! I love IBKR but find it not to be very user-friendly. Hoping to help people avoid all the time it took me to just figure out how to use the platform.

[@justnit]

That was simple! Thank you so much for this. I’m usually in cash with the way I trade options. I guess I’ll have to become a real investor to create this margin loan

[@CFH298]

Frec has an SBLOC rate of 6.33% no matter the amount. It’s been really good for lower net worth individuals.

[@sharonwinsmith]

Nice!

[@ThisIsCarine]

what's FREC? can you add link?

[@ThisIsCarine]

@cfh298 what's your experience with FREC? trying to compare it to IBKR

[@CFH298]

@@ThisIsCarine they are a start-up but all funds are managed by Apex Security. I love their customer service and fees are great for a direct indexing of SPY. Portfolio line of credit is awesome too with the rates.

[@l0gic23]

​@@sharonwinsmith what the Frec? Any experience with it... Just getting into your videos over the last week. Do you have one that talked to different legit brokers besides the household names?

[@chayden1402]

Hey 👋 Sharon how do you pay back the loan? Also how do you find out the interest you have too pay on the account. Please and thanks for the great content 🙏

[@sharonwinsmith]

Thank you for watching! I am actually in the process of working on a course on the Buy, Borrow, Die Tax Strategy which will have an entire section dedicated to SBLOCs and would answer your questions. I will do a deep dive in the course on SBLOCs because of high number of requests I've been getting around these topics. I hope to have this out soon!

[@RaulAllen-k4q]

@@sharonwinsmithis it soon yet?

[@303Estates]

Great VIDEO!! (as always!! ) - what is your latest thoughts on good place to get low cost SBLOCS?

[@jorgegonzalez4362]

Hi Sharon, thanks for the information. Quick question, interactive brokers have a margin and a portfolio margin account, wish one is the right one to be able to borrow agains?

[@Torestar1]

Hi Sharon, I am very grateful for this. Is it legal to use the money deposited from Interactive Brokers to your ACH bank account to then buy more stock on ETrade and repeat? I’ve always heard that we could only buy other investments with an SBLOC but was wondering if that would also be the case with Interactive Brokers? I prefer to just invest into more stocks as the main investment over and over again with the loans from Interactive brokers.

[@fitzroyw1]

Hi Sharon, Is your course available? If so can you send details please. Great detailed info given.

[@stevecha3612]

Thanks, how have SBLOC rates changed over time? Is there any data on what rates have been over the last 20 years with IBK? I assume the rates vary over time, unlike a fixed rate you may get for a commercial property mortgage?

[@sharonwinsmith]

The rates are variable and are definitely going to change. It is something you would have to monitor if you were to take out an SBLOC.

[@cantaloupefighter]

do sblocs also work for IRAs? or only taxable brokerage accounts?

[@danielmaldonado6388]

They charge comition on trade? What about dividend stock to pay the sbloc saying im making more than interest? It is worth it?

[@gustavodiaz4689]

Hi 👋 quick question. I have my portfolio with fidelity do I transfer my shares to IBK or do both accounts get linked with each other?

[@sharonwinsmith]

I would imagine that you would have to open an account at IBKR and actually transfer the shares over from Fidelity. I'm not aware of anybody ability to link accounts but have never tried that.

[@GrayEwing]

Let's say you use SBLOC funds to buy an investment that has monthly recurring revenue/interest. Are you putting that cash against the loan or do you just ignore the loan and buy more S&P?

[@devinwantsanaccount1551]

What is your strategy to minimize commission fees at IBKR? You said you transfer in the securities from another broker instead of purchasing directly through IBKR, but aren't you still being charged a commission every time they reinvest dividends?

[@estherch8394]

When transfer money into my bank account, does it count as selling some of the stock investment? Thanks.

[@sharonwinsmith]

If you transfer cash into an account with a negative cash balance of an SBLOC, that is going to automatically apply against the outstanding SBLOC balance (and decrease the negative cash balance).

[@RareBoom]

Very very helpful thanks! I wiuld want to know what the interest rate is, i didn't see where that is listed?

[@sharonwinsmith]

Rates are variable and will be different across brokerages. You can find the rates for Interactive Brokers here www.interactivebrokers.com/en/trading/margin-rates.php

[@andersonandrew112]

Are there minimum deposit requirements to open an SBLOC? Does accredited investor requirements apply? Thanks

[@sharonwinsmith]

Most brokerages I'm aware of don't have a minimum to do an SBLOC. You would just have to meet the maintenance margin requirements to support the amount of your SBLOC. But, each brokerage is different so you would want to check the rules wherever you are planning to do the SBLOC. No requirement to be an accredited investor. That really only comes into play when you are looking at making investments in investment funds.

[@bambambino23]

Isnt tgere a fee to transfer positions? Costs more than commissions.

[@MillsM]

How long before being able to withdraw. In IBKR portfolio balance I see an amount in Cash Available but when I go to withdraw I see a ridiculously low amount. Should I have a specific account (margin account vs Portfolio account)?

[@lonamisa_]

hi sharon, are ETF assets considered part of the "securities" definition against which you can get a SBLOC?

[@sharonwinsmith]

Yes, you should be able to include ETFs in your portfolio value for purposes of using an SBLOC.

[@ThisIsCarine]

@@sharonwinsmith what about mutual funds, will they work for SBLOC? In general, what's the most appetizing thing to have in your portfolio for the sake of getting as much SBLOC as possible: stock, MF or IF?

[@bambambino23]

I dont see anywhere that they have sny comissions at all

[@kymandjamesshh]

If i obtain a sbloc and the stock goes up does the loan shift as well? Also how does one contact you for help/hiring you

[@sharonwinsmith]

The amount of total SBLOC you can take is a function of the value of your stock portfolio. So as your portfolio value increases (as stocks increase), the amount of SBLOC you could take increases. If you have an outstanding SBLOC, it shouldn't just automatically increase as the value goes up. It just means you can take out more of an SBLOC if you want. I don't do any work with clients anymore but will keep releasing content on these topics and more in the future!

[@jamesa8225]

So correct me if I’m wrong. You use e Trade and Interactive Brokers with the same assets and you transfer them back and forth. Or do you also have separate assets in both accounts.

[@jamesa8225]

I guess what I’m asking is if it’s possible to have an account full of assets that can be displayed on different platforms? Like for example I start out using M1 and they give me an ID # that’s unique to that portfolio and I switch to E*Trade using that same Id number? Or are you literally transferring each stock or asset to international brokers? Wouldn’t transferring be a taxable event?

[@sharonwinsmith]

I have multiple brokerage accounts at various places. I only have an SBLOC with IBKR. So the SBLOC is only against securities in the IBKR account. If I need to transfer more securities to IBKR to increase borrowing capacity or avoid a margin call, I could easily transfer from other accounts like E*Trade to IBKR. But the SBLOC is only against the securities in my IBKR account.

[@fjcardenas1]

Sharon. To transfer securities means transfer your stock? Without first selling it?

[@yarmohammadi]

Do you have a referral link for IBKR?

[@sharonwinsmith]

I don't but thank you for asking!

[@AXD-CAPITAL]

Can I accumulate interest payments? If I get 1 stock thats worth 1k and I borrow 500 with 5% yearly interest. If I dont pay interest then my margin call level would be at 550$ right? Or am I forced to pay the interest? Thank you

[@yaskovdev]

Thank you for the video. I guess this does not work with a Cash account and you need a Margin account for that? Just tried that and I cannot withdraw more money from my IBKR account than I have in cash.

[@sharonwinsmith]

Thanks for watching! If you just have cash in your account, you wouldn't be taking an SBLOC. You would just be taking distributions of cash out. An SBLOC is borrowing against securities or bonds in your account. You need collateral in the form of shares for the SBLOC.

[@seerutkaur3773]

Are you from Canada?

[@sharonwinsmith]

I'm in the U.S.

[@RE-jb2ke]

Good stuff. Thx

[@Pteromandias]

How is this different than a margin account?

[@prophetseven728]

I believe Margin you can only buy stocks. With this you can buy anythin you want. Except stocks I believe.

[@Sh0nuff73]

So any follow on the IBKR pro vs FREC? Just curious

[@Docyomotivate]

What is FREC?

[@kimsou2652]

Is there a minimum about of how much I have invested in stocks before I can do an SBLOC?

[@sharonwinsmith]

Most banks don't have a min that I have encountered.

[@bambambino23]

Most have minimums. Every broker I s VASTLY different and there are no industry average. Some require 400k in minimum value. Some require 200k. Some require 100k. Some have no minimum. Some allow 90% borrowed, some as low as 40%. Its best to simply contact them and just ask :)

[@DSS3390]

Can I still sell covered calls on the IBKR acct holdings after taking out sbloc cash against them?

[@GGtheseventh]

You find the answer to this?

[@makesifrank9449]

Hello , the other brokrage accounts for me to get sbloc i must " add to managed account " meaning they get a 1 % fee addition to the manage my account . Is that the case with ibk ? Or you are incharge of your holding ? Also i checked the pro says free trading us stocks ect btw on the website

[@sharonwinsmith]

There are no fees for SBLOCs at IBKR. They do charge a fee for trades which is why I never buy and sell stocks through IBKR. I do that through my Etrade account and transfer securities over to IBKR as needed.

[@makesifrank9449]

I called IBK in the US, and the gentleman said they only do margin loans, not SBLOC. he said that's a banking product and IBK is not a bank? any clarification or he is not aware ? I don't want to move forward and open up a brokerage with IBK if I cannot use this feature in the future. I currently have sbloc with Merill however to get that product I must have an "advisor " which comes with around 1%Fee @@sharonwinsmith

[@rsmiele]

Robinhood margin rates are lower than IBKR Pro.

[@CFH298]

Margin rates != SBLOC

[@DerikAasansLevelUpTravel]

@sharonwinsmith regular account you can SBloc withdraw 50% . Does that change if you get “portfolio manager”? I’m a IBKR too…

[@sharonwinsmith]

Do you mean you have an account at IBKR managed by a financial advisor? I'm not aware of any reason why you couldn't still do an SBLOC in that case. However, your financial advisor is financially incentivized to advise you not to do SBLOCs because it likely decreases the fees they earn.

[@johnwincek9678]

@@sharonwinsmith I think Derick must mean Portfolio Margin.