Fidelity-will-be-making-ALL-ETFs-not-marginable-for-30-day-cash-only

OK that plus the surprise 1% commission on crypto trades has me calling TradeStation today.

fwiw, all aforementioned brokers pay 0.05% interest or less on uninvested cash. While you get free stock trades (which may make it worth it), this seems to be where they're making a good deal of money.

On the other hand, IB pays over 3.1% on cash if your account NAV is over $90K.
https://www.interactivebrokers.com/en/accounts/fees/pricing-interest-rates.php

.. the trick is that, IB still charges commissions for most stock trades. (There's a small group of ETFs you can trade for free though.)

But assuming an account trading only a One Percent system, with an exposure of around 30%, you're sitting in cash 70% of the time. A One Percent system backtest targeting TQQQ with 3.1% cash interest on a $100K account for past 1 year paid $2,550 in cash interest. At the IB commission rate ($0.005/share) you would have paid about $640. The result: $1,910 more in your pocket than with another broker.

Do your own diligence with a WealthLab backtest with the strategies you trade. Set up the cash interest and commission in Preferences (F12) > Backtest.

I called Fidelity and confirmed the change above. They told me other brokers might adapt the same rule as well.

What do you think better: IB or TradeStation to connect to their system and auto trade live? I trade a total of more than 150,000 shares a day.

@glitch

Reach out to Peter @ Tradestation

(312) 803-3860
PAlbino@tradestation.com

Use me as a reference and he will get you setup.

@cone
Tradestation pays 3.3% but you have to ask for it on unused capital in the account.

I am evaluating which platform to move to: IB or tradestation

When IBKR Is “Better”

If your goal is predictability and minimizing hidden costs on large volumes, IBKR has advantages:

Smart routing → better execution

Rebates → reduce effective cost of passive limit orders

Interest on cash → offsets some trading costs

Global market access / algos → more flexibility

TradeStation is cheaper in headline commissions, but:

You lose rebates

Marketable orders may slip more than on IBKR

Less flexibility and fewer advanced execution options

My fidelity account has uninvested cash sitting in SPAXX which is currently yielding ~4%. I also primarily trade individual stocks with only ~10% allocated to ETF style strategies. As weird as this is, it doesn't seem like it will be an issue for me on Fidelity.

@emartin197

QUOTE:
Tradestation pays 3.3% but you have to ask for it on unused capital in the account.

Please elaborate. Ask for it, how?

@eralbanese
Thanks for that. Now I vaguely recall uninveseted cash swept daily into SPAXX (the Fidelity Government Money Market Fund) when I was at Fidelity years ago.

You specifically have to ask your account rep in Post #4 for the improved rate on cash and for a reduction in margin cost.

In my case, I asked mine, it took a week to be reviewed by the committee (reviews happen in a Tuesday meeting if I recall correctly), then it started that next day once approved.

Unfortunately, I have a 401K there at Fidelity that needs to stay there because of my "day-job" (which is fairly consuming, which is one reason I like Wealthlab so much!). But they do have this very nice "BrokerageLink" feature that allows you to actually do equity and options trades for people who want to venture outside of the pre-selected list of mutual funds normally available to 401K and 403B plans.
My question... Did they remove the ability to use MedVed Trader to do automated algorithmic trades from WL8? If so, is there any hope of doing automated trades with Fidelity? I'm not there quite yet, but hoping to get there one day...

The recent Fidelity update impacts only short-term trading in ETFs like SPY and VXX. Trading in options and individual stocks remains unchanged.