I've seen brokerages intensely advertise their margin interest rate, and I've seen this being use to compare them. Why is this important, when you can get a low interest rate loan using in the following way?
- Sell PUT $X expiring in 1 year
- Buy CALL $X expiring in 1 year
- Short 100 stocks at $X
- Close all positions at the end of the year for a slightly larger amount (denoting interest).
I've tried using the method above, and the rate is usually around 1%, which is lowest than the margin rate of any brokerage I can find.
Am I missing something here, is there any real value in margin rates, or is this all a marketing sham?