Interactive Brokers

[zanyan]

Hi guys,

I've looked through the majority of this thread and have a few things I'd like to confirm:

Firstly, I've noticed there's been different feedback on whether or not depositing and withdrawing funds with IB is free or not (from what I've read, it appears deposting and withdrawing funds requires a wire transfer which is apparently free with Commsec Direct Investment Accounts, although I'm unsure what people meant by 'telling Commsec to transfer to IB online'; could somebody please clarify?)

Secondly, equities bought under IB are held under 'street name', in other words, our name is not on the register with the company, it is IB's name that is. Could somebody please confirm and if not can somebody please recommend other choices of brokers which can trade US equities whilst keeping your name on the register ( as I will be mainly dealing with US equities) as this is something I might have to take into account.

Thirdly, how are people finding it in terms of buying US equities. From what I've read, people must first deposit AUD funds with their Aussie Citibank branch and then exchange those into USD (how's the spread/ commissions?) Then they must purchase the stock. Can somebody confirm this?

Thanks and happy to join the ASF community.

 

[Kryzz]

Hi guys,

I've looked through the majority of this thread and have a few things I'd like to confirm:

Firstly, I've noticed there's been different feedback on whether or not depositing and withdrawing funds with IB is free or not (from what I've read, it appears deposting and withdrawing funds requires a wire transfer which is apparently free with Commsec Direct Investment Accounts, although I'm unsure what people meant by 'telling Commsec to transfer to IB online'; could somebody please clarify?)

Secondly, equities bought under IB are held under 'street name', in other words, our name is not on the register with the company, it is IB's name that is. Could somebody please confirm and if not can somebody please recommend other choices of brokers which can trade US equities whilst keeping your name on the register ( as I will be mainly dealing with US equities) as this is something I might have to take into account.

Thirdly, how are people finding it in terms of buying US equities. From what I've read, people must first deposit AUD funds with their Aussie Citibank branch and then exchange those into USD (how's the spread/ commissions?) Then they must purchase the stock. Can somebody confirm this?

Thanks and happy to join the ASF community.

I think you get one withdrawal free per month, each additional attracts charges:

https://www.interactivebrokers.com/en/index.php?f=otherFees&p=withdrawal

I've also noticed your financial institution may charge you a fee when IB does same day/immediate withdrawals, i.e. cash in your bank account in a couple of hours.

You can determine what your nominated base currency is for your IB account, currency conversion for residual amounts is a piece of cake, minimum commission is about $2.50 AUD I believe, spreads are great.

http://ibkb.interactivebrokers.com/video/1172

 

[hseldon1234]

Firstly, I've noticed there's been different feedback on whether or not depositing and withdrawing funds with IB is free or not (from what I've read, it appears deposting and withdrawing funds requires a wire transfer which is apparently free with Commsec Direct Investment Accounts, although I'm unsure what people meant by 'telling Commsec to transfer to IB online'; could somebody please clarify?)

For deposits, I have done it many times from a CBA transaction account, no CBA fees at all. Its no different to transfer to any other 3rd party bank account via NetBank.

For withdrawal, I have only done a couple test but stayed within one per month to avoid IB fees. No CBA fees at all.

Withdrawals seem to happen quicker than deposits.

For CommSec CDIA, you should check with CommSec if they charge fees for transfer to/from 3rd party bank accounts...

Secondly, equities bought under IB are held under 'street name', in other words, our name is not on the register with the company, it is IB's name that is. Could somebody please confirm and if not can somebody please recommend other choices of brokers which can trade US equities whilst keeping your name on the register ( as I will be mainly dealing with US equities) as this is something I might have to take into account.

Yes, IB doesn't operate the way Aussie retail brokers operate in terms of CHESS. IMO should not really matter if you are an active trader, but you need to decide for yourself.

Thirdly, how are people finding it in terms of buying US equities. From what I've read, people must first deposit AUD funds with their Aussie Citibank branch and then exchange those into USD (how's the spread/ commissions?) Then they must purchase the stock. Can somebody confirm this?

Only been using it for a month and I find it excellent. Yes, IB do not auto convert forex as a matter of principle, you have control over exactly when you convert the AUD (assuming you choose it as your base currency) to USD and vice versa.

Spread - right now AUD sells for 0.91545 and buys at 0.91550. Can't get better than that, IB make money from commissions not from spread.

Commissions are https://www.interactivebrokers.com/en/index.php?f=commission&p=fx1

 

[TheScientist]

Hi all,

So I am having issues transferring my US Stocks from my broker in the UK to IB.

They keep telling me over the phone that I need to initiate the transfer in the account management section of the website using eith ACATS or FOP.

However when I try to do so my broker in the UK is not listed in their drop down menus for delivering brokers.

Can anyone help with this?

 

[Sir Burr]

my broker in the UK is not listed in their drop down menus for delivering brokers.

Try the IB "Live Chat". They might help with that.

 

[Chilli]

Anyone selling covered calls with IB? Where can one easily and quickly see the cash generated in Premiums?
Thanks

 

[So_Cynical]

Anyone selling covered calls with IB? Where can one easily and quickly see the cash generated in Premiums?
Thanks

Yeap..the premiums show up in either positions or that other screen, lol

In web trader.

I have seen them...also show up in one of the account management screens, the one where you can generate a report for a specific period of time.

 

[Sir Burr]

Australia and the USA have a tax agreement. Any dividends you receive will have witholding tax deducted. You declare your total dividend income to ATO and also the witholding tax paid. CGT is paid to ATO on gains in AU$.

Just noticed you can't claim the usual dividend deductions as the US dividend income goes into "Other net foreign source income". If you don't have any Aussie dividends, when adding deductions eTax complains you haven't dividends to deduct against!

Looks like the only thing you can claim is the withholding tax.

 

[Sergio]

seems volume on IB is not align with other data provider?

anyone can help me to clarify this please?

https://www.aussiestockforums.com/forums/showthread.php?t=27378&p=793199#post793199

thanks
Sergio

 

[kefa]

Just got a reply from IB saying they are now expecting it to be more like november or december before margin accounts are re-enabled. Sounds like asic are taking their sweet time with this! And I thought asic were meant to be helping us small guys.

 

[bellenuit]

Just got a reply from IB saying they are now expecting it to be more like november or december before margin accounts are re-enabled. Sounds like asic are taking their sweet time with this! And I thought asic were meant to be helping us small guys.

That is bad news. I'm going to have to open a margin account with another broker so that I can trade in the interim.

 

[Chilli]

Just got a reply from IB saying they are now expecting it to be more like november or december before margin accounts are re-enabled. Sounds like asic are taking their sweet time with this! And I thought asic were meant to be helping us small guys.

I've just been told another 6/8 weeks. I'm not surprised, I expect this to drag on and on. ASIC would far rather we were ripped off by paying 8% interest to an Aussie Broker instead. I'm really sick about this because I fully expected the Aussie market to take off after the election, having suffered huge losses and longing for the day to arrive. Now all I can do is sit back and think about how much I could have made, had the rug not been pulled from under me.

 

[kefa]

Is anybody using the reuters news service available through IB for US$39/month? Is it worthwhile?

 

[CanOz]

Is anybody using the reuters news service available through IB for US$39/month? Is it worthwhile?

I use it as a backup, but its nothing compared to TradeTheNews.com.

It sort of depends on what you want it for, earnings, econo, events, etc....

also, check out Talking Forex...will try and find the link...

 

[DU Trader]

Me too Kryzz. From what has been posted above, it would seem that ASIC told IB in 2010 that their License didn't need updating, but have now decided that it does. So it would seem that ASIC have allowed IB to continue offering Margin loans to existing and new clients for three years when their License precluded them from doing so.
To my mind this is yet another case of ASIC being asleep at the wheel again. I shall be writing to ASIC shortly to express my displeasure. Hopefully if they receive enough similar correspondence, they may pull their finger out and update the Licence promptly.

what makes you think this is ASIC's fault and not IB's? IB didn't apply for the license in 2010 and just kept business as usual with margin lending and not making margin calls despite the new law. this situation is ridiculous. still no update from ASIC or IB. do you switch brokers or wait? wtf

 

[bellenuit]

what makes you think this is ASIC's fault and not IB's? IB didn't apply for the license in 2010 and just kept business as usual with margin lending and not making margin calls despite the new law. this situation is ridiculous. still no update from ASIC or IB. do you switch brokers or wait? wtf

The other thing I would like to know is whether getting the license is just a formality or whether they could be refused for some reason. I don't want to find out in a few weeks/months time that I must repay all my margin within a couple of days as they are not allowed to provide such a facility any longer.

 

[tech/a]

The other thing I would like to know is whether getting the license is just a formality or whether they could be refused for some reason. I don't want to find out in a few weeks/months time that I must repay all my margin within a couple of days as they are not allowed to provide such a facility any longer.

If your in that position you want to seriously look at how you trade/invest.

IB will eventually comply.
The problem us with ASIC
Not IB.

 

[bellenuit]

If your in that position you want to seriously look at how you trade/invest.

IB will eventually comply.
The problem us with ASIC
Not IB.

I didn't say I was close to a margin call. In fact I am very conservative with my LVR. But that doesn't mean I want to be in a position where I must come up with funds within a few days or liquidate some assets within a few days should IB be forced to withdraw the facility completely at short notice. I don't see how that has anything to do with how I trade/invest.

I hope you are right that it is a problem with ASIC only and that IB can comply with ease. But I haven't seen anything official to confirm that is the case.

 

[Chilli]

The other thing I would like to know is whether getting the license is just a formality or whether they could be refused for some reason. I don't want to find out in a few weeks/months time that I must repay all my margin within a couple of days as they are not allowed to provide such a facility any longer.

They didn't update their licence in 2010 because ASIC told them that they didn't need to. Unfortunately I see it as being far more complex than just a mere formality, otherwise it would have been sorted out very quickly. They would have to re write their terms and conditions to remove the bit about not generally giving margin calls. Do they do that just for their Australian clients, just to satisfy ASIC, or do they start doing it across the board? I guess it will come down to how much business they do in Australia and how many Australian clients they have. The lack of any updates is very poor IMO because it has left many completely stuffed. I only have about 25% margin but can't buy back any of my options, without increasing my ML so have just had to wait for them to expire instead.

 

[ftw129]

ThinkOrSwim decided to shut down all Aussie accounts about a year ago and never provided much more info other than "TD Ameritrade made a business decision based on an internal, objective risk assessment. Due to confidentiality needs, we are unable to provide further details."

OptionsXpress shut down Aussie accounts just after the onset of the GFC....

Could this IB issue possibly end with the same fate?