In the vein of this question, I'm curious about getting a loan by selling treasuries. The issue, apparently, is that the proceeds of the short sale is held as collateral.

As I understand it, however, the prices of treasuries have an upper bound (unless negative rates are somehow possible but even so very rare). So there should be far less risk short selling treasuries than stocks especially when the interest rates are low.

Is there a reason why the broker still takes the proceeds as collateral and are there methods to short sell treasuries with minimal collateral given the lower risk?

  • 1
    "unless negative rates are somehow possible but even so very rare" - you may want to rethink your assessment: bbc.com/news/business-54314971 please don't invest in something you don't understand; shorting investments is considered riskier for a reason. Sep 28, 2020 at 19:05
  • In the US, the 10 year treasury rate for example has never been negative so I doubt the risk of it going negative is relevant to my question Sep 28, 2020 at 19:11
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    *gestures around at everything happening in the world * Sep 28, 2020 at 19:14
  • what i want to know is, if you have to maintain the sale balance as collateral, can you at least earn interest on it, for instance by investing in treasur... wait
    – user12515
    Sep 28, 2020 at 19:30
  • "In the US, the 10 year treasury rate for example has never been negative..." Isn't this the same kind of thinking that has caused hedge fund implosions? It may not be realistic to Ignore rare or outlying scenarios.
    – Flux
    Sep 28, 2020 at 22:46

1 Answer 1


The margin requirement for treasuries is much lower than for options and equities. However, your broker has the right to require a higher amount.

I trade at with a broker that has the lowest margin requirement (the Reg T minimum), one of the lowest margin loan rates and offers portfolio margin (lower than Reg T). Last week, they raised the margin requirement based on their expectation of possible higher market volatility going into the election. Check with your broker.

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