# IB Set Up



## wtji (3 July 2008)

Hi Guys. I m trying to set up an Interactive Brokers account and I have ran into some difficulties. 

On one of the pages, I was asked to tick boxes that would verify my status within the US-Australia income tax treaty/benefits framework. I had a look through the government tax treaties/documents but I wasn't really sure that I understood some of the treatments. 
And customer service didnt seem to explain it that well either. 

I m currently a full time university student so I was wondering which of the boxes I should tick. 

If anyone could offer some help on explaining the procedure, I would really appreciate it.

cheers


----------



## Trembling Hand (3 July 2008)

You need to fill out and sign Form W-8BEN.

in part II 9a tick box  and put in Australia.



(of course when the FEDS come after you I will insert this DYOR)


----------



## nizar (3 July 2008)

Hi TH,

Do you know if you can use the TWS paper trading account "free" as in without putting in the $10,000 which is required to open an account?

The only problem I have with depositing the 10k is that I may be testing for several months before I even start trading real money with them...


----------



## julius (3 July 2008)

Nizar,

You can log into the demo version of TWS with the username & password 'edemo', but I don't think you can backfill data or track your balance.

Otherwise, just open the account & deposit the money, then withdraw most of it until you're ready to start trading.


----------



## nizar (3 July 2008)

julius said:


> Nizar,
> 
> You can log into the demo version of TWS with the username & password 'edemo', but I don't think you can backfill data or track your balance.
> 
> Otherwise, just open the account & deposit the money, then withdraw most of it until you're ready to start trading.




Thanks Julius.
I think I will do as per your suggestion.


----------



## jersey10 (4 July 2008)

Can someone with experience with the demo system for IB tell me how similar it is to the real thing.  I have had a bit of a play with the demo and can see US stocks but can't get any ASX stocks to display.


----------



## nizar (4 July 2008)

Does anyone know if you can (and how to) transfer portfolios over from aussie brokers to IB?


----------



## Trembling Hand (4 July 2008)

jersey10 said:


> Can someone with experience with the demo system for IB tell me how similar it is to the real thing.  I have had a bit of a play with the demo and can see US stocks but can't get any ASX stocks to display.



Have you subscribed to Oz data?


nizar said:


> Does anyone know if you can (and how to) transfer portfolios over from aussie brokers to IB?




From experiences of people that have tried I wouldn't.


----------



## jersey10 (4 July 2008)

Trembling Hand said:


> Have you subscribed to Oz data?
> 
> No not through IB.  So they provide free US data for the demo but not free Oz data?? Is this correct?


----------



## nizar (4 July 2008)

Trembling Hand said:


> Have you subscribed to Oz data?
> 
> 
> From experiences of people that have tried I wouldn't.




Why not exactly?
You can PM me if you want.
Thanks


----------



## Trembling Hand (4 July 2008)

nizar said:


> Why not exactly?
> You can PM me if you want.
> Thanks




It seems to take forever and a lot of stuffing around, from other peoples experience. Sometime a month with the stocks in limbo. Not sure if now is the right time not to have quick access to your holdings. 

check the other IB threads to ask members experiences


----------



## Trembling Hand (4 July 2008)

jersey10 said:


> No not through IB.  So they provide free US data for the demo but not free Oz data?? Is this correct?





yep. and i think that US data is only free if you place a couple of trades, I think.


----------



## IFocus (4 July 2008)

jersey10 said:


> Can someone with experience with the demo system for IB tell me how similar it is to the real thing.  I have had a bit of a play with the demo and can see US stocks but can't get any ASX stocks to display.




Pretty much no difference between the simulator and the real thing, as for stocks you should see all the exchanges you *selected*.

I did not select IB data for the US or ASX (I don't need it)and receive none on the simulator as a result....maybe you are paying?


----------



## MRC & Co (4 July 2008)

^^^

Actually, I believe on the *demo* the data you can get is already pre-determined and lagging (I think).

I personally, only used it briefly (before signing up, this is where you pick your data Ifocus, you are talking about the paper trading simulator, wheras Jersey is talking about the actual demo) and only accessed US equity data.  

Cheers


----------



## nizar (4 July 2008)

Can you still trade ASX stocks even if you don't subscribe to real-time streaming data for $49.50/month?


----------



## jurn (5 July 2008)

nizar said:


> Can you still trade ASX stocks even if you don't subscribe to real-time streaming data for $49.50/month?




Yep the prices turn up blank, and I've managed to send limit orders through.

Now I can see my P&L for the share, and my average price paid - just not the current price!


----------



## nizar (5 July 2008)

jurn said:


> Yep the prices turn up blank, and I've managed to send limit orders through.
> 
> Now I can see my P&L for the share, and my average price paid - just not the current price!




LOL i think i'll just pay for it then, to avoid these hassles.
I need to know the current price to work out my position size.

Now can anybody answer this question for me. If i transfer my shares from my aussie broker into my IB account, does this trigger a CGT event?

Thanks.


----------



## tech/a (5 July 2008)

I dont have IB's feed as I have esignal on Real Time Software.

Nizar you wont have a CGT issue as you havent liquidated your holdings.
Sell them first and yes you will.


----------



## nizar (5 July 2008)

tech/a said:


> Nizar you wont have a CGT issue as you havent liquidated your holdings.




Thanks tech, i was hoping this was the case.


----------



## nizar (9 July 2008)

Hi,

Does anyone know if you can adjust the margin requirement in IB for forex trades?

For the currencies I want to trade, IB offer 50:1 margin (2%), but if I'm not willing to use that much margin, is there a setting somewhere so that I can change it to, say, 5:1 (20%) margin?

Thanks.


----------



## Trembling Hand (9 July 2008)

Not really sure what diff it would make. Do you go all in anyway??


----------



## nizar (9 July 2008)

Trembling Hand said:


> Not really sure what diff it would make. Do you go all in anyway??




What do you mean do I go all in anyway?

Can I just have the simple answer please, can they do it or not?

It makes a huge difference. Trading on 2% is much more risky than trading on 20%. Isn't it? 

I have never traded using margin or leverage before, so I definately don't want to start off at the deep end of 50:1.


----------



## Trembling Hand (10 July 2008)

nizar said:


> What do you mean do I go all in anyway?
> 
> It makes a huge difference. Trading on 2% is much more risky than trading on 20%. Isn't it?



NO. you set your position size by the expected stop and your capital at risk per trade (2% 1% 0.5% whatever)

Margin has nothing to do with it.



nizar said:


> What do you mean do I go all in anyway?



 if you have $1000 capital and they give you 100:1 do you then trade $100,000 lots just because you can? No, you just trade based on % capital risked per trade. personally have never seen that on IB because there is no need to down size it. Just stick to normal position sizing ignore the MAX margin they give you.


----------



## nizar (10 July 2008)

Trembling Hand said:


> if you have $1000 capital and they give you 100:1 do you then trade $100,000 lots just because you can? No, you just trade based on % capital risked per trade. personally have never seen that on IB because there is no need to down size it. Just stick to normal position sizing ignore the MAX margin they give you.




Thanks for your explanation though I still don't quite get it.

Yes I want to ignore the max margin they are giving me and use more of my own cash to fund the trades.

Don't worry I will send them an email and ask them direct once my account is set up and funded. For now, I have about 50million documents to send to them


----------



## Trembling Hand (10 July 2008)

Nizar its very simple. Just position size your trades as you would normally. 

There is no need for you to worry about how much margin they "take" from your account. All your money risk management takes care of that. 

If they "take" more margin per trade how is that going to effect your position size???? its not because you are working out your position size on % capital.

WHY do you want them to TAKE more margin? What is that going to do?


----------



## IFocus (10 July 2008)

MRC & Co said:


> ^^^
> 
> Actually, I believe on the *demo* the data you can get is already pre-determined and lagging (I think).
> 
> ...




Ah didn't realize there was a demo


Nizar like TH has pointed out margin isn't the issue unless you intend on using margin to take more positions in the market. 

Of course if your positions are correlated then this will not be effective risk management if using fixed fractional sizing for each position that effectively add up to one position.

I guess in forex there can be some strong correlation between the majors?


----------



## nizar (10 July 2008)

IFocus said:


> Nizar like TH has pointed out margin isn't the issue unless you intend on using margin to take more positions in the market.




Can somebody please explain how margin works if you intend on using margin to take on more positions?

Thanks.


----------



## professor_frink (10 July 2008)

nizar said:


> Can somebody please explain how margin works if you intend on using margin to take on more positions?
> 
> Thanks.




you have 10K in capital. Lets say you get 3 signals for trades on the day that will require  20K cash based on using fixed fractional pos sizing. Your broker offers 2:1 margin, so you are able to take on all 3 positions without taking on extra risk for each position.

Simple

In forex, if you only want to use 20:1 margin, and your broker offers 50:1, then instead of taking on a 100K position just because you have 2K in the a/c, you will turn around and only purchase 100K for every 5K you have in the account.


----------

