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Interactive Brokers

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kefa said:
So a one man company is ok? Interesting, maybe I need to investigate a bit further.
Click to expand...

Hopefully someone could post a Company Setup 101 for IB soon

I'm stumped at the first page:

Interactive Brokers offers account structures for:
Corporation
Partnership
Limited Liability Corporation
Unincorporated legal structures
 
Sir Burr said:
Hopefully someone could post a Company Setup 101 for IB soon

I'm stumped at the first page:

Interactive Brokers offers account structures for:
Corporation
Partnership
Limited Liability Corporation
Unincorporated legal structures
Click to expand...

I presume you'd purchase a shelf company about $800
Then you have a Pty Ltd
the third one on the list.
 

I tried to open a new account with their Reg-T facility back in June / July and I could only open cash only back then, so they've known about this for a long time now.

Now If I want to trade US stocks looks like I gotta find somewhere else, somehow, or go to the trouble of strting up a company.
 

Seems the changes will mostly affect stock traders who short stocks, or buy stocks using leverage. You need a margin account to do that.

From what others have said, and from what I've read, futures traders can still long and short with a Cash Account, but they don't get the 50% intra-day margin discount.

Not sure about the situation with a Company. Hopefully they'll still allow margin accounts for company accounts. I guess we'll find out tomorrow when we contact IB.

Also, they did say in the email that they may be able to offer margin accounts again in 4-6 months time.
 
The 4-6 month thing will most likely be extended.

Just to clarify/re-iterate what tech/a said, It doesn't appear that option/futures traders will be influenced by this change, its only really those running a stock position on margin.

Correct me if im wrong.
 
captain black said:
It only affects securities (ie. shares) not futures so it's business as usual for futures trading with IB.
Click to expand...

Are you sure? Even though earlier notifications in August said explicitrly forex and future trades were not affected, after talking with IB this morning I get the impression that ruling out margin accounts WILL affect futures and forex buy/sell trades.

I'm happy to be proved wrong!
 

My understanding was that the issue was with margin lending for securities so perhaps IB are changing the complete account structure for Australian accounts affecting all products?
 
captain black said:
I've lodged a ticket regarding futures trading. Will post the reply here.
Click to expand...

I have too!?

I have also lodged a ticket about having dual British/Australian citizenship (with U.K. bank account) which has also been mentioned in this forum as a workround to get a margin account.
 
I rang IB and got some answers..


Can you still long/short futures on a Cash Account?

YES, they said you can. The only issue is that settlement is T+1, not real-time like a margin account. So you might need more cash in the account to cover trades.


Are margin accounts available if you open and account under your company?

YES. They said margin accounts are still available for company accounts. The minimum opening balance is $10,000



I'm going to open an account under my company name, to avoid the T+1 settlement hassle.
 
Why am I not surprised that the solution involves paying fees to ASIC for company registration whilst losing the tax free threshold.
 
OZ Trade said:
Why am I not surprised that the solution involves paying fees to ASIC for company registration whilst losing the tax free threshold.
Click to expand...

Yeah. Costs me around $650 pa to keep the company - $230 to ASIC and the rest to the accountant.

If you payout the company's profits as wages/bonus, you can still effectively get the tax free threshold and avoid the 30% flat rate. However, the company's gotta contribute 9.25% to your super.

I already have the structure setup, so that's why I'll go down the company account path. If I didn't, think I'd battle on with the T+1 settlement hassle and look for another futures broker.
 
bellenuit

For those thinking of setting up a company structure for IB trading and then transferring your shares and margin balance across, that will trigger a CGT event if you are an investor (not trader) and could result in tax consequences you may not have anticipated. For traders, it may also have tax consequences depending on how you value your closing inventory.
 
This why IB stopped providing margin accounts...

"....David Friedland, Asia Pacific managing director, Interactive Brokers, said the problem stemmed from a rule change in 2010 regarding margin trading in Australia. His firm was co-operating fully with ASIC and had applied for a variation to its licence..."

The SMH article...

Licence glitch shuts down online US broker's loans dealing
 
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