Interactive Brokers

[Lone Wolf]

Hi Lone Wolf,

The ASX exchange has very strict rules regarding order submission at prices it deems are outside the range of fair market value.

Hi Perry,

Thank you for the information. I do appreciate that it's an ASX requirement. But it would appear that Australian brokers (maybe because it's their primary business) have staff available for vetting orders quickly without customer interaction. I only believe this because the IB thread is the only thread I've seen with people complaining about order vetting. However I still think IB is the best broker we have, I just may not use it for a system that tries to get ASX orders filled on market open.

 

[bellenuit]

I opened a CommSec margin account a month or so ago and transferred my existing shares with CommSec to the new account to use as collateral. I haven't yet traded on the CommSec margin account.

In the meantime I have nearly completed the process of opening an account with IB and will also have margin facilities available. I am funding that account using shares from the USA, but will trade both US and Oz shares.

Comparing both brokerages, it is apparent that IB will be a lot cheaper. As far as I can see most of my transaction will be at the $6 fee compared to ($19.99+$10) at CommSec and I also won't have the $10 fee for cash deposits/withdrawals.

Once my IB account is operational, I will transfer all the CommSec shares from my margin account there to IB and use CommSec purely for non margin trading. Has anyone done this before and will it be treated by CommSec as an Off-Market Transfer, even though it is the same owner. They charge $54 (I think) per security for off-market transfers.

 

[bellenuit]

I've now got my account initiated with IB and will start trading once my funds come through.

I understand that IB plan to join the Chess system at some stage and provide us with a HIN like other Australian brokers do. In the meantime, how do we manage details such as bank to use for dividend payments, whether we want to participate in DRPs etc.? I know we initially get a letter from the company when we first purchase the shares that allow us to set up those details, but if we subsequently want to make changes, do we do it through the respective registry such as Computershare or Link Marketing Services. If so, how are the IB holdings identified with the registries? I currently have 2 accounts with CommSec and identify each holding with the registry by the two different HINs.

 

[skc]

I've now got my account initiated with IB and will start trading once my funds come through.

I understand that IB plan to join the Chess system at some stage and provide us with a HIN like other Australian brokers do. In the meantime, how do we manage details such as bank to use for dividend payments, whether we want to participate in DRPs etc.? I know we initially get a letter from the company when we first purchase the shares that allow us to set up those details, but if we subsequently want to make changes, do we do it through the respective registry such as Computershare or Link Marketing Services. If so, how are the IB holdings identified with the registries? I currently have 2 accounts with CommSec and identify each holding with the registry by the two different HINs.

Dividends are simply paid into your IB account by default. You won't be able to access your IB share holdings with Computershare/Link because they are simply not in your name. With DRP etc you should be able to instruct IB by sending them a ticket under account management interface.

 

[PinguPingu]

I am currently under the age of 21 (20) so my required deposit would be 3,000. Does this mean the upfront brokers commission deposit of $10,000 is waived?

All I wish to do at the moment with IB is long and short stocks and indexes. Are there any age restrictions with this? I wasn't able to find any but it appears you need more than a simply cash account to short.

 

[arnie78]

Re: Interactive Brokers fees commissions

hi guys i see everyone is recommending ib, however im a bit confused with all the fees involved. eg the drop down list other fees.

If you only trade futures eg globex, cme, cbot sfe us and aussie no europe exchanges.

withdrawal fees etc etc.

Im old school used to trade with the telephone, haven't delved in the internet trading platform as yet. However im advanced with computers so no problem.

So what are the fees? say a 50,000 account.

cheers

 

[tech/a]

I've only ever noticed brokerage

 

[bellenuit]

Re: Interactive Brokers fees commissions

hi guys i see everyone is recommending ib, however im a bit confused with all the fees involved. eg the drop down list other fees.

If you only trade futures eg globex, cme, cbot sfe us and aussie no europe exchanges.

withdrawal fees etc etc.

Im old school used to trade with the telephone, haven't delved in the internet trading platform as yet. However im advanced with computers so no problem.

So what are the fees? say a 50,000 account.

cheers

Same here. I find their site difficult to understand. I have just opened an account and am awaiting funds to come through before I trade. Base fees for brokerage seem OK, but I am not sure if there is a fee to wire in or out funds. I read it that you pay $10 for the 2nd and subsequent wire deposit/withdrawal each month. Wire seems to be the only way to deposit or withdraw funds for Australians as far as I can tell. Hope someone else can throw some light on this subject.

 

[SevenFX]

Re: Interactive Brokers fees commissions

Same here. I find their site difficult to understand.

Yes Agree at the begining but after first few weeks its like a Super Broking Account with everything you could want and [much more] so dont let initial impressions put you off and try activating & using the TWS paper trading account first.

Base fees for brokerage seem OK, but I am not sure if there is a fee to wire in or out funds. I read it that you pay $10 for the 2nd and subsequent wire deposit/withdrawal each month..

This is the cost of running a business and if trading is what you plan to be good at, well these fees will seem like a drop in the ocean.

Also I have used IG (market makers, [never] again) & commsec and could never see myself going back to them again.

I have only used IB for little while now but cant see myself chaging anytime soon as they [more] than suffice my needs.

Rate them 9/10 to date.

SevenFX

 

[tech/a]

Re: Interactive Brokers fees commissions

Yes Agree at the begining but after first few weeks its like a Super Broking Account with everything you could want and [much more] so dont let initial impressions put you off and try activating & using the TWS paper trading account first.



This is the cost of running a business and if trading is what you plan to be good at, well these fees will seem like a drop in the ocean.

Also I have used IG (market makers, [never] again) & commsec and could never see myself going back to them again.

I have only used IB for little while now but cant see myself chaging anytime soon as they [more] than suffice my needs.

Rate them 9/10 to date.

SevenFX

Totally agree.

The platform is awsome.
Yes it is daunting
Yes it is a painful process to get going.
But once up its fantastic.

 

[bellenuit]

I have just done my first two purchases with IB after opening an account. Although I found understanding what to do very difficult at first when I was reading the user guides, it has now become a lot clearer once one focuses in on only the tasks I want to do, which currently is to just buy and sell US and Australian shares.

I do like the ability to create an order without transmitting it and then just hit transmit at a later stage when the bid/offer are where I want them to be.

I have 3 questions if Steve or anyone else can help.

1. The commission for Australian share trades is 0.08% of the order value (AUD 6.00 minimum). But the fee page has this note at the bottom: "VAT, also referred to as consumption tax, goods and services tax, where applicable, will be separately applied for eligible services". However, I haven't seen any GST yet applied.

So when is GST applied and is it applied to each individual order (like CommSec) or to gross commissions for the month? Is it also applied to the minimum $10 monthly fee for inactive accounts.

2. If I were to open a second account in order to separate "trading" from "investing" to make it clearer to the ATO which is which, can my collateral of shares, which currently supports my margin trading in the currently opened account, be used as margin security for the new account, without having to transfer some of the shares to the new account. Since these are long term investments (moved from another US broker to IB), putting some of them into the new "trading" account would defeat the purpose of having one account exclusively for "trading" and one for "investing".

3. When I transmit a trade I get the message (can't remember the exact wording) about it being dangerous to place orders without market data. However, I use CommSec and Ameritrade to give me market depth data in another window. Is there anyway I can turn that message off?

 

[tech/a]

I have just done my first two purchases with IB after opening an account. Although I found understanding what to do very difficult at first when I was reading the user guides, it has now become a lot clearer once one focuses in on only the tasks I want to do, which currently is to just buy and sell US and Australian shares.

I do like the ability to create an order without transmitting it and then just hit transmit at a later stage when the bid/offer are where I want them to be.

I have 3 questions if Steve or anyone else can help.

1. The commission for Australian share trades is 0.08% of the order value (AUD 6.00 minimum). But the fee page has this note at the bottom: "VAT, also referred to as consumption tax, goods and services tax, where applicable, will be separately applied for eligible services". However, I haven't seen any GST yet applied.

So when is GST applied and is it applied to each individual order (like CommSec) or to gross commissions for the month? Is it also applied to the minimum $10 monthly fee for inactive accounts.

2. If I were to open a second account in order to separate "trading" from "investing" to make it clearer to the ATO which is which, can my collateral of shares, which currently supports my margin trading in the currently opened account, be used as margin security for the new account, without having to transfer some of the shares to the new account. Since these are long term investments (moved from another US broker to IB), putting some of them into the new "trading" account would defeat the purpose of having one account exclusively for "trading" and one for "investing".

3. When I transmit a trade I get the message (can't remember the exact wording) about it being dangerous to place orders without market data. However, I use CommSec and Ameritrade to give me market depth data in another window. Is there anyway I can turn that message off?

No GST

I just flick through the warning its because you dont subscribe to their data.

 

[Hanrahan]

Hi guys: I've just found this thread.

I'm new to IB and to options and there are a few questions I'll be asking BUT FIRST

A mate was stung with Opes Prime and I was stung with Sonray. IB looks similar in that we do not have segregated accounts: Do we have any protection?

 

[pma99]

Hi guys: I've just found this thread.

I'm new to IB and to options and there are a few questions I'll be asking BUT FIRST

A mate was stung with Opes Prime and I was stung with Sonray. IB looks similar in that we do not have segregated accounts: Do we have any protection?

G'day Hanrahan

I'm sure I have read plenty on this forum that has been written to answer exactly this question. I can't point you to a specific question and answer, but would be surprised if you can't find what you are looking for in the following threads. Have a read through them if you haven't already, I would suggest you read through the following threads:

https://www.aussiestockforums.com/forums/showthread.php?t=10838

https://www.aussiestockforums.com/forums/showthread.php?t=8295

Cheers

Paul

 

[Hanrahan]

G'day Hanrahan

I'm sure I have read plenty on this forum that has been written to answer exactly this question. I can't point you to a specific question and answer, but would be surprised if you can't find what you are looking for in the following threads. Have a read through them if you haven't already, I would suggest you read through the following threads:

https://www.aussiestockforums.com/forums/showthread.php?t=10838

https://www.aussiestockforums.com/forums/showthread.php?t=8295

Cheers

Paul

Thanks Paul. There's a lot of reading out there. but I did find this:

Account Protection
Customer securities accounts at Interactive Brokers are protected under SIPC up to $500,000 (with a cash sublimit of $250,000) and under Interactive Brokers' excess SIPC policy with Lloyd's of London insurers for up to an additional $30 million (with a cash sublimit of $900,000). Your stocks, options, warrants, debt instruments, and cash -- denominated in all currencies -- are covered by this protection. Futures, options on futures, and single stock futures are not covered, but available cash will be swept from your futures account to your securities account periodically to take advantage of SIPC and excess SIPC coverage to the greatest extent possible. As with all securities firms, this coverage provides protection against failure of a broker-dealer, not against loss of market value of securities.

This protection is provided by the Securities Investor Protection Corporation (SIPC) and Lloyd's of London insurers. SIPC provides the first $500,000 per customer (including up to $250,000 for cash). For customers who have received the full SIPC protection, the Lloyd's policy provides up to an additional $30 million (including $900,000 for cash), subject to an aggregate limit of $150 million.

For the purpose of determining a customer account, accounts with like names and titles (e.g. John and Jane Smith and Jane and John Smith) are combined, but accounts with different titles are not (e.g. Individual/John Smith and IRA/John Smith).

SIPC is a non-profit, membership corporation funded by broker-dealers that are members of SIPC. For more information about SIPC and answers to frequently asked questions (such as how SIPC works, what is protected, how to file a claim, etc.), please refer to the following websites:

Sonray was criminal fraud (no one charged of course) so their Dutch bank failed to honour the guarantee given.

 

[captain black]

A heads up to anyone using IB to trade small cap ASX stocks on margin. I use a macro that checks the IB ASX special margin web page and emails me any changes so I can keep my watchlists up to date. Tonight's email was much larger than usual.

There have been several hundred small cap stocks that have had their initial margin requirements increased from 50% to 100%.

http://www.interactivebrokers.com/e...try=australia&tag=Australia&ib_entity=llc&ln=

There's a thread on ET forum as well regarding changes to US stock margin requirements as well for anyone trading those.

http://www.elitetrader.com/vb/showthread.php?threadid=227360

 

[bellenuit]

I recently open an account with IB that has AUD as the base currency. I funder the account with US shares that I transferred. I have used no cash.

I recently bought some Australian shares on margin. Even though I am well within the margin boundaries for the portfolio (I use portfolio margin), I have noticed that when I print the Margin Report it shows:

AUD Currency Margin: Initial Margin 7.96 Maintenance Margin 7.96.

What is this referring to and do I need to do anything about it?

I find it very difficult to understand how margin works under IB and looking up currency margin in the user guide doesn't enlighten me one bit.

 

[bellenuit]

Has anyone gone through the process of transferring shares from CommSec, in particular a CommSec margin account, to IB?

Did Commsec charge to do this (assuming it is to the same owner in IB, so not an off-market transfer).

My instructions from IB say that I should also contact CommSec and inform them to create instructions to send the shares over. Did you do this by a letter to CommSec? I can't see any CommSec form to handle this process.

 

[bellenuit]

A heads up to anyone using IB to trade small cap ASX stocks on margin. I use a macro that checks the IB ASX special margin web page and emails me any changes so I can keep my watchlists up to date. Tonight's email was much larger than usual.

There have been several hundred small cap stocks that have had their initial margin requirements increased from 50% to 100%.

http://www.interactivebrokers.com/e...try=australia&tag=Australia&ib_entity=llc&ln=

There's a thread on ET forum as well regarding changes to US stock margin requirements as well for anyone trading those.

http://www.elitetrader.com/vb/showthread.php?threadid=227360

Wow, am I p***** off with IB.

I opened an account just a week ago and funded it by transferring shares from the US that were worth about $240K over 2 stocks, roughly $120K each. I bought about $42K of australian shares using this as collateral. Not having used margin before, I thought I would just dip my toe into the water to begin with and keep well away from getting margin calls.

Earlier today I decided to transfer a bit more US equity over (more of one of the above companies, but not much dollar wise).

Then reading the implications of this new small cap requirement and having a chat with a margin expert at IB, I have discovered I am now borderline to getting a margin call on the 30th, as one of the US companies has a market cap of only $200M. Additionally, as I will have only one marginable stock in my portfolio, I will be switched from Portfolio to Reg T (?) margin.

So I decide to transfer some more stock from the US. More of the same marginable company and another stock that is also marginable. Low and behold, because I have a transfer in progress (it has the status "acknowledged", so cannot be cancelled), I cannot initiate a new transfer until that is completed (4 - 8 business days is the estimate). So there is no chance of getting more positions transferred before the 30th.

As I don't have the cash available, I have little choice but to sell into this **** market to avoid a margin call.

This sucks big time. Those changes should have been implemented over a month, not a week, considering some of the lead times required to take certain actions to avoid a margin call.

 

[skc]

Wow, am I p***** off with IB.

I opened an account just a week ago and funded it by transferring shares from the US that were worth about $240K over 2 stocks, roughly $120K each. I bought about $42K of australian shares using this as collateral. Not having used margin before, I thought I would just dip my toe into the water to begin with and keep well away from getting margin calls.

Earlier today I decided to transfer a bit more US equity over (more of one of the above companies, but not much dollar wise).

Then reading the implications of this new small cap requirement and having a chat with a margin expert at IB, I have discovered I am now borderline to getting a margin call on the 30th, as one of the US companies has a market cap of only $200M. Additionally, as I will have only one marginable stock in my portfolio, I will be switched from Portfolio to Reg T (?) margin.

So I decide to transfer some more stock from the US. More of the same marginable company and another stock that is also marginable. Low and behold, because I have a transfer in progress (it has the status "acknowledged", so cannot be cancelled), I cannot initiate a new transfer until that is completed (4 - 8 business days is the estimate). So there is no chance of getting more positions transferred before the 30th.

As I don't have the cash available, I have little choice but to sell into this **** market to avoid a margin call.

This sucks big time. Those changes should have been implemented over a month, not a week, considering some of the lead times required to take certain actions to avoid a margin call.

Is the increase in margin for small caps an IB initiative or an exchange initiative?

I am not going to question the wisdom of using margin in the current market, but it does seem like if you sell you would have a fair chance of buying it back lower once your positions are successfully transferred.