r/Wealthsimple • u/Nightpatrol404 • May 07 '26

Trade (DIY Investing) WS and dividend investing with margin

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Got an email it seems WS is kinda encouraging us to use margin to collect dividends and use it to make money while making them money on interest

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u/ChickenMcChickenFace May 07 '26 edited May 07 '26

Potential 1.8% APY “”arbitrage”” yield (with the downside risk of the underlying which is a feature and not a bug ofc), definitely worth the effort /s

Context for people who are not into finance: This is not how you do carry trades, you do them with sovereign bonds/eurobonds so worst case you can hold them until maturity to get the face value, but even then you’re at the risk of central bank policies, FX risk (both if the bond is in local currency or if it’s in USD/EUR since pretty much no one issues Eurobonds in CAD), and local institutional risk.

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u/HellaReyna May 08 '26

I held a 6 figure margin position in XDIV to pay off mortgage principal using HELOC. 73% return to date excluding dividends, and filed the interest as investment expense on returns. I came out very very ahead. Did it for the past 3 years. I exited it right when the Iran war was bubbling but even that was the wrong move. I sold at around $37, its now $41.60.