>Allowed to buy $566,000 worth of stock for every $100,000 worth of equity
Not sounds too good to be true. It can happen for the day traders when the daily activity is not reconcile yet. For buy and hold person, $100,000 can max around $200,000 buying power which I don't even like to get close to this because you can get margin call and lost all your money when market melt down.
>The ANNUAL interest to borrow that million dollars is .75% (less than 1% interest ANNUALLY)
I don't think it is that low. I sometimes dip into a little margin for just a few days a month. The interest charge is charged right to my account the next month definitely a lot more than 1%. Once the FED raise the rate, the loan rate will go up too. IB used to pay decent rate(3%?) for cash. Now it basically disappear after FED drop the rate to 0.25%.
That for 100 shares trade only bacause they charge 0.005 commission per trade. So, it is $5 when you buy 1000 shares. Also, the hidden charge of monthly account fees of $15 if don't generate at least $30 commission for a month. The fees may be waiver if you switch to plan B which pay $9.95 flat commission per trade. So IB is no good for low active investors considering the service department is very hard to reach.
The original poster is correct. Interactive Brokers allows you to borrow 5.66 times your equity. (Google "portfolio margin") Currently right now I have $480K of equity and own $1.67 Mil of stock/MLP's and have another $930K of buying power.
He is correct on interest rates as well. For Balances below $1 million it is FED FUNDS (<.25%) + 1%. For over $1 mil it is FED FUNDS + .5% for a total of .75%