Using $TSLA Margin to Buy $STRC and Beat the Market

Added: 2026-05-31

[00:00:09]He suggests using 25% of his Tesla equity on margin to buy STRC using the 11 and 1/2% dividend to pay the margin interest and reinvesting the rest Tesla.

[00:00:19]Another arbitrage. I love it. I love the way you're all thinking.

[00:00:23]Is it?

[00:00:24]And this is the first question. So, assume you got $400,000 in Tesla.

[00:00:30]I know a lot of people in the community have at least that. We've been talking about getting to 300 shares for nearly 5 years now.

[00:00:37]But at 25% equity, you can borrow 100K.

[00:00:42]Margin rates depending on your brokerage, I have different margin rates myself depending on who I'm working with, but they range from 4 and 1/2% to 5 and 1/2%. Sometimes as high as 6% and the STRC currently pays 11 and 1/2%.

[00:00:56]So, your annual annual interest cost on borrowing 25% against your Tesla bag is 4 and 1/2 to $6,000. Remember, if you pay interest on margin, that's a tax write-off. Woo! And STRC is tax-deferred income as well. So, it's like a a double-edged bonus on the taxes right there. And hey, I'm not a tax accountant, so please confer with your AI for tax advice.

[00:01:21]Uh so, 100K position will pay you 11 and 1/2K a year. Your net carry is between Net carry is your net profit from the arb 7K to 5,500. It's 7K if you're paying 4 and 1/2% margin interest.

[00:01:36]And that is sweet. And then yes, you can use that arb to reinvest in Tesla. There's another interesting thing, too. I always talk about my mattress.

[00:01:47]And as your assets grow, so does your mattress. So does your ability to borrow against it. So, when Tesla goes to 650 bucks a share, your Tesla position will be 650k.

[00:02:02]And you'll be borrowing quarter of that, which will be a lot more than 100k. And you'll be able to buy more and more. So, yes, you can do it, but remember SDRC can go to zero and so can Tesla.

[00:02:12]So, this is not financial advice. And yes, DCAS is always a killer. This is an example of DCS. I actually plugged in the actual configuration settings cuz people always ask, "What settings are you using for that DCS?"

[00:02:24]And uh again, this helps you buy dips aggressively.

[00:02:29]You don't buy pumps. You wait for mean reversion, and then you load up. So, on this chart, I probably can't see with my eyes, but it'll have the little blue load, you know, you could be buying if you allocate 100 bucks a week to DCAS, over time, you can see the ROI is 69.9% from just DCA-ing.

[00:02:51]But if you use DCS, you get 116.4%. So, you get more shares, and sometimes you spend a little bit more, but sometimes you have to as well.

[00:03:00]But the point is the ROI is the number you look at. Makes always makes more sense to use DCAS because it keeps you out of chasing big pumps as well. So, go right ahead. I will talk about the allocation though. I do like what you're saying here with borrowing just 25% against your Tesla bag. Remember, the way the rich avoid taxes is they borrow against their assets that grow, and they write off the interest on the borrowing against the assets, and they live off of that. And as the bag grows, they continue to borrow.

[00:03:35]So, it's it's real simple. So, you're onto something, but I like your allocation of just 25% of it.

[00:03:40]And uh go right ahead and use DCS as well.

[00:03:55]>> Woo!