Interactive Brokers

[MS+Tradesim]

$6.00 is cheap! What do you mean $6.00 and 0.08% are expensive? Can you give us an example of a broker that charges less? (not that cost is everything)

What he's saying is that those prices for ASX trading are still expensive relative to trading other markets. For example, FX through IB is 0.0025%.

But nevermind that, IB is the cheapest and best way to trade Aussie stocks. Ignore the market 'snobs'.

Now I've transferred all my trading funds to IB, I'm scalping Aussie stocks everyday and loving it. However, I'm using Paritech Pulse for my data platform and IB for executions.

 

[Mr J]

$6.00 is cheap! What do you mean $6.00 and 0.08% are expensive? Can you give us an example of a broker that charges less? (not that cost is everything)

That's good for aussie stocks, but still significantly more expensive than forex, futures, US stocks etc. I've avoided aussie stocks due to their cost.

Much of the expense is because it charges a percentage of the value of the trade, rather than a fixed amount per stock. The amount at which commissions are the same for aussie and US stocks is about $6, and above that aussie stocks just become more expensive per stock, while US stocks have a fixed fee. For example, 1000 shares of a $30 aussie stock will cost you about $50 in commissions. For 1000 shares of any US stock, it costs just $10.

A single contract of an SPI future costs $10 roundtrip, and $25 per point. If the SPI rises 1% in value (say 38 points), you get nearly $950 profit minus the $10 in commission. For a 1% rise in 3500 shares of a $30 stock, you'd see a $1050 profit minus about $170 in commissions. To give yourself the best chance of success you want to minimise your expenses, and for a trader this means minimising commissions.

Of course you may prefer trading shares, but the lower commissions of other markets are something to consider. Something else to note is that you can short the SPI, but you can't short stocks at IB, so you may want to consider futures anyway.

 

[MS+Tradesim]

Of course you may prefer trading shares, but the lower commissions of other markets are something to consider.

This is not necessarily true. If I scalp 300,000 shares of XYZ at $0.03, I earn $300 for one tick and pay less than $15 for the round trip. To earn $300 for one tick on the SPI you would pay $120 for a round trip.

What the SPI will have going for it is probably higher liquidity (though I don't obviously scalp illiquid stocks), long or short, and more volatility for the same time-frame...at a guess.

 

[Mr J]

The aussie stocks are fine for cheap stocks. $6 is roughly where the cost of aussie and US stocks are even. Above that, aussie becomes significantly more expensive. Below that, it becomes quite cheap.

Also, we can't ignore that the ticks on a 3c stock are going to be worth a far larger amount as a percentage to the ticks of the SPI, so they're not comparable as individual ticks. You may be able to make more per tick, but you will also lose more.

There's also the matter of the spread and slippage being far more significant and that lowers the tradable range. If some can trade it that's great, but I can't. Either I'm put off by the lack of room for error, it doesn't suit my trading style or I just lack the skill to pull it off. I don't picture scalping penny stocks as the easiest way to trade, not that I know anything about it.

Aussiest, what type of stocks do you typically trade? Do you prefer stocks?

 

[Aussiest]

The aussie stocks are fine for cheap stocks. $6 is roughly where the cost of aussie and US stocks are even. Above that, aussie becomes significantly more expensive. Below that, it becomes quite cheap.

Also, we can't ignore that the ticks on a 3c stock are going to be worth a far larger amount as a percentage to the ticks of the SPI, so they're not comparable as individual ticks. You may be able to make more per tick, but you will also lose more.

There's also the matter of the spread and slippage being far more significant and that lowers the tradable range. If some can trade it that's great, but I can't. Either I'm put off by the lack of room for error, it doesn't suit my trading style or I just lack the skill to pull it off. I don't picture scalping penny stocks as the easiest way to trade, not that I know anything about it.

Aussiest, what type of stocks do you typically trade? Do you prefer stocks?

I usually trade stocks and prefer blue chips. But, obviously, i want to expand into different markets. I hear what you are saying about costs vs. potential profit. I think it's good to expand. I like to scalp as well as hold positions overnight, or over several nights.

 

[MS+Tradesim]

Also, we can't ignore that the ticks on a 3c stock are going to be worth a far larger amount as a percentage to the ticks of the SPI, so they're not comparable as individual ticks. You may be able to make more per tick, but you will also lose more.

Per tick, you make or lose the number of units times the incremental value. If you hold 1 share of a sub-10c stock you will make or lose $0.001 per tick. If you hold 1 SPI lot you will make/lose $25 a tick. If you hold 300,000 $0.04 shares you will make/lose $300 per tick. If you hold 12 SPI lots you will make/lose $300 per tick.

There's also the matter of the spread and slippage being far more significant and that lowers the tradable range.

What spread? Tradeable penny stocks have 1 tick spreads, same as the SPI. And slippage is a problem on any instrument that one doesn't know how to trade.

I don't picture scalping penny stocks as the easiest way to trade, not that I know anything about it.

Which makes me wonder why you have so much opinion about it. Seriously, you are arguing in absolute terms yet you admit to not being a trader in that market.

Edit: On a day like today, the real advantages in trading the SPI (et al) will be apparent. I probably won't find a penny worth scalping.

 

[skc]

Now I've transferred all my trading funds to IB, I'm scalping Aussie stocks everyday and loving it. However, I'm using Paritech Pulse for my data platform and IB for executions.

MS, can I ask you a dumb (and off-topic) question?

I see plenty of penny stocks with no liquidity, and some penny stocks with huge liquidity. If there were several million in the depth of the order book, and you are joining the back of the queue, then wouldn't it be difficult, if not impossible, to get a fill? Especially if you are only aiming for 1 tick?

The opposite applies - anything with liquidity that's <$10K in value per level means prices can easily gap and buyers/sellers may disappear in the blink of an eye.

Where's the happy medium? Can you name a few examples?

 

[MS+Tradesim]

Skc,

90% of the time I simply meet the ask. I want stocks that are going up, not being sold back. I'm looking for thick buying lines and thin(ish) selling lines, upwards momentum, and plenty of volume. Earning 1 tick is the minimum target (obviously). 2-3 is desirable. But I normally only risk 1 tick on the downside.

Can't find any examples today, but when I do I'll post some pics. As it is getting OT, and I'm as much to blame, I'll start another thread.

I used to do this every day, then hadn't for years (as trend trading became more profitable), and I'm just getting back into it now over the last few months as IB makes it so easy to do! So I'm a still a bit rusty right now.

 

[Mr J]

Per tick, you make or lose the number of units times the incremental value. If you hold 1 share of a sub-10c stock you will make or lose $0.001 per tick. If you hold 1 SPI lot you will make/lose $25 a tick. If you hold 300,000 $0.04 shares you will make/lose $300 per tick. If you hold 12 SPI lots you will make/lose $300 per tick.

You're missing my point. You were comparing positions that can't be compared fairly.

What spread? Tradeable penny stocks have 1 tick spreads, same as the SPI. And slippage is a problem on any instrument that one doesn't know how to trade.

I was talking about the size of the spread relative to the tradable range of the instrument. I'm not stating absolutes at all, and a penny stock moving hard would be an exception.

Which makes me wonder why you have so much opinion about it. Seriously, you are arguing in absolute terms yet you admit to not being a trader in that market.

I don't, and I wasn't. I was talking about stocks in general, not penny stocks, and that is why I stated that I didn't know much about them. I don't talk in absolutes, unless we're talking about politicians being wankers, but even then I'd admit that is just my opinion.

 

[skc]

Skc,

90% of the time I simply meet the ask. I want stocks that are going up, not being sold back. I'm looking for thick buying lines and thin(ish) selling lines, upwards momentum, and plenty of volume. Earning 1 tick is the minimum target (obviously). 2-3 is desirable. But I normally only risk 1 tick on the downside.

Can't find any examples today, but when I do I'll post some pics. As it is getting OT, and I'm as much to blame, I'll start another thread.

I used to do this every day, then hadn't for years (as trend trading became more profitable), and I'm just getting back into it now over the last few months as IB makes it so easy to do! So I'm a still a bit rusty right now.

Thanks and will look out for the other thread.

Mods: few free to remove this conversation.

 

[MS+Tradesim]

Thanks and will look out for the other thread.

Mods: few free to remove this conversation.

Have responded here...just for starters.
https://www.aussiestockforums.com/forums/showthread.php?t=15175

Mods, feel free to delete any/all off my off-topic posts above.

 

[DB008]

Hey Mr J,
I was only talking about trading stocks, with $6 been very cheap in Oz.


For the U.S. and FX markets, if l were trading, l would be using tradestation IMO. Seems VERY cheap to me.

 

[Mr J]

Is there an order type or condition where buy and sell orders are treated independently rather than cancelling each other out? I've taken a look through IB's order types but didn't find anything.

 

[andy1kenobi]

Hi folks

Wonder if anyone can help me on tax obligation questions relating to using IB as I have just become more confused the more I have looked.

I live in Australia (citizen) and am currently using IB to trade ASX stocks. I am also considering US stocks at some point. Do I have any tax obligations to the USA by using US domicilied IB for net proceeds from trading (I know about dividends and interests but can't find anything definitive about trading profits that isn't steeped in confusing terminology)? I thought not, but am just not sure when I started reading about Form 1042S. Would I have tax obligations to the USA if I traded US stocks? Would it make any difference if I did it from a partnership basis rather than a joint account?

Any help would be greatly appreciated.

Andy

 

[Mr J]

Some unreliable answers until the informed backup arrives: Yes you will have to pay tax on trades within the US, but you should be able to claim that against tax you pay in Australia.

 

[-Bevo-]

Today I set a buy order for BBG at 9.31 which was triggered I always set bracket orders with a stop loss I had a sell limit ordered placed at 10.83 and the high for the day is 11.05 but price has fallen back to 9.50 atm problem is my sell limit ordered didn't get triggered and I was away from the computer anyone ever had this happen

 

[cutz]

Hi

If anyone has used IB mobile trader, what sort of handsets are you guys using and how are you finding it, obviously intent is not to trade just keep an eye on things when I’m on the go and maybe close out positions if i have to.

I was looking at blackberry/nokia e71 or something else from that range.

Any thoughts ?

 

[long88]

Hi

If anyone has used IB mobile trader, what sort of handsets are you guys using and how are you finding it, obviously intent is not to trade just keep an eye on things when I’m on the go and maybe close out positions if i have to.

I was looking at blackberry/nokia e71 or something else from that range.

Any thoughts ?

i used ib mobile trader, just for purely on accessing the pricing, nothing special. never place trade, too small, and too hard to use. with platform, it just require java, so any platform that support java should be able to run it no problem.

my handset is htc touch.

 

[Mr J]

Why do I have all of these different currency positions on my activity statement? My account is in AUD and as far as I know I don't have any open positions, yet under cash report is has more than my account balance in AUD, a couple of thousand in USD, and some JPY.

I can only think of a few reasons:
- Some messed up IB practise.
- An fx trade (from a month or two ago) wasn't completely closed.
- ES results weren't converted to AUD.

Thought I'd ask here in case IB takes a while.

 

[cutz]

If you traded ES, profits/losses show up as $US dollars in your cash position till you close that $US cash position.
Suggest checking your trading history RE. the JPY position.

BTW, It's a simple process closing the foreign cash position, from memory the way i did it last time was right click close position from the account window.