Margin trading allowed in SMSF?

[yonnie]

Interactive Brokers from the States are coming to Oz and they allow margin trading on Australian shares.

It`s not a margin loan you apply for.

It works like this:
If you place an order for $ 20,000 and you have $ 15,000 in your account, they will lent you the missing $ 5,000.

So it is always done on a per trade basis and they will lent to a maximum % of the value of the trade.
Not sure how much that is, but might be up to 50% of the trade.

Is Macquarie Prime not a bit similar in the way that they dont have cfd`s anymore, but you buy those shares in your name and you pay margin on the top 200/300 shares?

I wonder if this type of trading on margin is allowed for your superfund?

 

[reece55]

Interactive Brokers from the States are coming to Oz and they allow margin trading on Australian shares.

It`s not a margin loan you apply for.

It works like this:
If you place an order for $ 20,000 and you have $ 15,000 in your account, they will lent you the missing $ 5,000.

So it is always done on a per trade basis and they will lent to a maximum % of the value of the trade.
Not sure how much that is, but might be up to 50% of the trade.

Is Macquarie Prime not a bit similar in the way that they dont have cfd`s anymore, but you buy those shares in your name and you pay margin on the top 200/300 shares?

I wonder if this type of trading on margin is allowed for your super fund?

I wouldn't have thought so.....

Primie facie, it's a loan which is prohibited by the SIS rules. CFD's are OK because they are a separately tradeable instrument.

Cheers

 

[CanOz]

I wouldn't have thought so.....

Primie facie, it's a loan which is prohibited by the SIS rules. CFD's are OK because they are a separately tradeable instrument.

Cheers

Your a handy fellow to have around Reese.

I've heard that you need to have at least 100k in Super to be worth a SMSF, is this true?

Cheers,

 

[yonnie]

I wouldn't have thought so.....

Primie facie, it's a loan which is prohibited by the SIS rules. CFD's are OK because they are a separately tradeable instrument.

Cheers

hi reece,

that would mean that you also cant trade Macquarie`s "cfd`s" in a SMSF, because those are not real cfd`s, but shares in your name on margin.

 

[Garpal Gumnut]

Interactive Brokers from the States are coming to Oz and they allow margin trading on Australian shares.

It`s not a margin loan you apply for.

It works like this:
If you place an order for $ 20,000 and you have $ 15,000 in your account, they will lent you the missing $ 5,000.

So it is always done on a per trade basis and they will lent to a maximum % of the value of the trade.
Not sure how much that is, but might be up to 50% of the trade.

Is Macquarie Prime not a bit similar in the way that they dont have cfd`s anymore, but you buy those shares in your name and you pay margin on the top 200/300 shares?

I wonder if this type of trading on margin is allowed for your superfund?

Its not allowed to borrow to trade in a SMSF

Assume you cannot trade on margin in a SMSF unless you get it in writing from ATO.

Garpal

 

[yonnie]

Just got a reply from Macquarie that you`re not allowed to trade their "cfd`s" in a SMSF account.

IB is the same set-up, so also not allowed in a SMSF account. However IB will let you trade the exchange traded cfd`s that come out later, so you will be allowed to trade those in your SMSF.

 

[reece55]

Your a handy fellow to have around Reese.

I've heard that you need to have at least 100k in Super to be worth a SMSF, is this true?

Cheers,

Thanks Can, I contribute where I am able to.

Normally, due to the accounting compliance costs, it is typical that $100K is required for it to be beneficial. This is because the MER would be too high with a lower cost base (say for 30K super, the accounting fee is 1K, thats 3.33%, whereas for 100K it might be 1200, which is only 1.2%).

yonnie, review the ATO site - Macquarie are talking rubbish - provided you have a GSL, CFD are permitted within a SMSF - but I suggest you read up on the ruling to give you a better idea....

Cheers
Reece

 

[yonnie]

yonnie, review the ATO site - Macquarie are talking rubbish - provided you have a GSL, CFD are permitted within a SMSF - but I suggest you read up on the ruling to give you a better idea....Cheers Reece

no, Macquarie is NOT talking rubbish.

A lot of people dont realise that the "cfd`s" Macquarie is trading are not really cfd`s. So its not a derivative contract like with the others.
With other DMA providers, the shares will be bought in the provider`s name and the provider will write out a contract with the trader.

With Macquarie with their DMA platform the shares will be bought in your name and thats why you are also entitled to the franking part of the dividend. And they will not write a contract between Mac and the trader.

They will still lent you money on the top 200/300, but now its not a cfd contract but buying shares on margin, just like with IB.

I hope its clear now and otherwise you might contact mac yourself.

Besides you dont have to have a GSL to be able to trade cfd`s. That is nowhere in the ruling.
But again you can ask Mac if you dont believe me............

 

[Junior]

If you want to gear into shares via your SMSF you can use warrants.