You can:
https://www.schwab.com/pledged-asset-line https://www.wealthfront.com/portfolio-line-of-credit
And HELOCs are essentially the same for people who own a house but not stocks.
https://www.schwab.com/pledged-asset-line https://www.wealthfront.com/portfolio-line-of-credit
And HELOCs are essentially the same for people who own a house but not stocks.
The debtor avoids the elevated short-term capital gains tax.
The bank gets interest payments on a loan that has an almost 0 default rate due to the loan being fully collateralized.
The problem is that this is not nearly the same as selling stock and withdrawing the sales money, because you keep the risk that the stock will go down thus force liquidating your portfolio. You're conflating selling and borrowing, they're not identical except in these very vague tales about the ultra-rich.
They do.
Wealthfront (as just one example) features and advertises this prominently in their app.
It's also very easy to do with Robinhood, simply withdraw cash using your margin. Interest rates are quite low. 2.5% with Robinhood, 3.65% with Wealthfront.
There's a big "Borrow cash" button right when you open the Wealthfront app.
It's not a win-win, there's significant risk.
> fully collateralized
This is not true! The underlying asset fluctuates in value and is open to lowering significantly in value, leaving the bank holding the bag.
You probably underestimate the ability of banks to evaluate risk. Yes, they absolutely could end up underwater on an asset backed loan, but you also shouldn't assume that you can take out $1 in loans on every $1 of stock.
On Schwab's page, they say: "Schwab Bank, in its sole discretion, will determine what collateral is eligible collateral and the loan value of collateral". So, if you have some recently highly-appreciated shares of AMC for example, they might decide they are not eligible collateral, or only offer to lend you $1 for every $5 of stock.