Interactive Brokers

[VSntchr]

Hi VSntchr,

Doesn't matter, stock or cash is fine.

More importantly, keep you margins within limits, personally I like to have plenty of cushion.

Thanks Cutz. As for margin, I was under the impression IB is not offering margin to Aus clients at the moment!

 

[cutz]

Thanks Cutz. As for margin, I was under the impression IB is not offering margin to Aus clients at the moment!

Sorry,

I didn't mean to confuse.

I was referring to margin, not margin loans, the restrictions apply to margin loans.

If you are only buying stock using cash, margin will not be an issue.

My personal opinion only, please check your individual situation using official channels.

 

[bellenuit]

Question for those using interactive brokers - Are the minimum balances required to be held in cash at all times? Or does stock also count?

For instance can I have an account with $0 cash and $50k worth of stock? Or do I need $10k cash and $50k of stock....

For a cash account, you must maintain a minimum balance of $500 in cash.

 

[cutz]

For a cash account, you must maintain a minimum balance of $500 in cash.

Even if the account has 50k worth of stock ??

 

[So_Cynical]

For a cash account, you must maintain a minimum balance of $500 in cash.

Even if the account has 50k worth of stock ??

I have gone under $500 (cash) a few times, didn't seem to be an issue :dunno: maybe because it was only for 3 or 4 weeks?

 

[bellenuit]

Even if the account has 50k worth of stock ??

Yes, I think so. They require the cash balance so that you do not go negative if they apply charges (commissions etc.) as they cannot offer you margin (individual accounts).

I have a big share portfolio but just had $2,072.12 cash in my account yesterday, which consisted of about AUD600 and the rest USD at yesterday's exchange rate. I currently am entitled to participate in the QBE SPP offer (which allows you to buy up to AUD15K in QBE shares at a special discount). When I looked under corporate actions, the most IB would allow me to allocate against the SPP was AUD1,572.12, which was my cash balance less AUD500.

I don't think they worry much about going a bit under as would happen anyway if your minimum balance was exactly AUD500, but was composed of some USD cash holdings and the latter were to fall in AUD value due to exchange rate fluctuations etc., but they expect you to get back to the minimum within a few days. They also seem to allow for going under if you are awaiting settlement and that would get you back to the minimum.

That being said, my account may be slightly different to a "normal" cash account, as it actually was a "portfolio margin" account but had margin facilities removed last year when it was withdrawn from individuals. It still has the "portfolio margin" status, though margin is not available under it.

This is the response I received to a question I put to IB on this issue a few months or so ago. I notice, re-reading this response, that they use the term cash buffer rather than minimum balance which may account for their flexibility in maintaining it:

Cash account only allows trading with settled cash and is not allowed to have a negative cash balance in any currencies. For your account, it was originally setup as a margin account. Due to the Australia restriction, it is currently being restricted from performing trades that would create a margin loan. A margin loan is defined as the borrowing of cash against collateral in the form of securities. IB determines whether a margin loan exists by measuring all cash balances in your securities account for its value in a common currency (for example, AUD). If the net cash balance is negative, then a margin loan exists. In addition, short stock market value has to be removed for the calculation of net cash balance and a AUD 500 cash buffer is required to be maintained for any possible future interest, dividend payable and/or fees.

 

[PinguPingu]

I wish they would fix their margin accounts already.

 

[waterbottle]

Hi All,

Does anyone know if it's possible to "fade" with forex trades on IB? Every time I add a profit target, it doesn't allow me to change the parcel size and is always equal to the original parent order.

Cheers.

 

[Weatsop]

I wish they would fix their margin accounts already.

Anyone got any news on that at all? Is killing me finding a non-IB mob to trade with. I've got broker exhaustion - I can't even remember which idiotic flaw goes with which broker anymore.

Is this the one that crashes if you move the stop too often? Or it is the one that doesn't let you attach a stop to the entry? Or is it the one that claims to be commission only on forex with no artificial spread, but somehow has a constant 1.2 - 1.5 pip spread on the EUR/USD?

IB, my god! Take my money!

 

[aarbee]

Interested to hear opinions of people having their SMSF accounts in IB and trading options.
Is trading in IB with SMSF account any different than under ordinary trading account, i.e. are their any peculiarities, restrictions imposed on SMSF accounts in terms of which strategy one can or can't trade. For example, for Americans having IRA accounts, they are not allowed to trade undefined risk strategies like naked options or short strangles.
Very interested to hear your opinions

Cheers

 

[PinguPingu]

This margin lending thing really does seem to be a headache for IB. All I get from them is that they are in communciation with ASIC. From reading this article it seems they may require a whole new company now to give Australian clients margin lending: http://leaprate.com/2014/08/exclusi...to-launch-new-company-for-australian-clients/


Great work ASIC, basically relagating us to rip off local rates.

 

[-Bevo-]

This margin lending thing really does seem to be a headache for IB. All I get from them is that they are in communciation with ASIC. From reading this article it seems they may require a whole new company now to give Australian clients margin lending: http://leaprate.com/2014/08/exclusi...to-launch-new-company-for-australian-clients/


Great work ASIC, basically relagating us to rip off local rates.

I have heard this is old news and most of the leg work regarding a new company is done. Fingers crossed
margin will be back soon.

 

[Pager]

Just opened an account in a trust name (SMSF) with IB, bit stunned as to how quick it took, set up in 2 days!, read through this thread and others and got the impression setting up a trust account could be a long and frustrating affair with IB, things must have changed?

Couple of tips for anyone else, 1) a SMSF is classed as a ‘Complex trust” (IB is from USA) not a simple trust as it is in Australia and 2) a “Grantor” (I had to look it up) is you, the person who is the beneficiary of the trust, then just fill in the form with basic info, TFN, ABN etc, send in a copy of the front page and table of contents of the trust and the signatory page that is certified, a certified copy of your passport and drivers licence, a bank statement for the fund, and a bank statement for you personally, and within 48 hours your approved.

Simples……….

 

[dlineinvestor]

Just opened an account in a trust name (SMSF) with IB, bit stunned as to how quick it took, set up in 2 days!, read through this thread and others and got the impression setting up a trust account could be a long and frustrating affair with IB, things must have changed?

Couple of tips for anyone else, 1) a SMSF is classed as a ‘Complex trust” (IB is from USA) not a simple trust as it is in Australia and 2) a “Grantor” (I had to look it up) is you, the person who is the beneficiary of the trust, then just fill in the form with basic info, TFN, ABN etc, send in a copy of the front page and table of contents of the trust and the signatory page that is certified, a certified copy of your passport and drivers licence, a bank statement for the fund, and a bank statement for you personally, and within 48 hours your approved.

Simples……….

Helpful to know, what instruments do you plan on trading through them, will you be using their platform let us know if you have any data or connection issues
Cheers,

 

[Pager]

Helpful to know, what instruments do you plan on trading through them, will you be using their platform let us know if you have any data or connection issues
Cheers,

I only trade futures these days, mainly US commodities and stock index’s, been using IB for close to 10 years and traded all instruments with them, my main broker though was Macquarie and was happy to pay a bit more for the service, but when I decided to move all my trading from a family trust to a SMSF and Macquarie jacked up there rates, decided I would do so with IB only.

Very rarely have any kind of issues with IB, the platform is very easy to use, and over the past 6 month have been using there mobile app more and more as its so convenient and easy to use and again don’t have any problems, although data dropouts can occur but that’s not an IB issue and Vodafone who I use seem to have addressed all the issues so its rare these days, also as im more a position trader, my orders often sit in the market all day with attached stop so even if im not online they execute, I just monitor once there placed for the unexpected, and the odd time there is a **** up its usually down to human error………….

Although these days I now were I need to double check my orders for my dyslexic errors, mind you anyone who has traded Orange juice may be aware how IB price this???? i of course had to learn the hard way

One thing with IB, is understand ALL aspects of how what you want to trade is quoted and trading hours, things like not understanding price (decimal points etc) or how that impacts how the system reads and places your orders or not checking after hours if thats what you want can be costly in either unexpected loss (can be a gain but Murphys law means this is rare) or missing a trade

 

[dlineinvestor]

Thank's ...you answered a few questions I've had about IB seems alot of my friends who trade use them too, good information shared "pager.
Cheers for the heads up about those dreaded decimals points, don't you wish they would allow you to config the view ...

 

[Colonel Flagg]

With the ongoing ASIC dramas to have no end in sight, what are the other options to open a Margin account with IB ?

It is not really the margin that is the issue but the T+3 settlement that ties up funds that ordinarily would be available.

Is an Australian pty ltd company exempt ? these can be setup online for approx $500 - 600.

A trust can't have a natural person as the Trustee, so we are back to the company.

Any other advantages ?

 

[bellenuit]

Is an Australian pty ltd company exempt ? these can be setup online for approx $500 - 600.

Yes, you can set up a company and use it to get margin facilities.

 

[minwa]

Anything else getting this BS "exposure" fee ? Not sure if it's new but I've trading same positions for a long time and only recently getting this.



3 dollars a trading day is like a few hundred dollars a year for one account. I have long and short futures in different symbols and they probably assess short positions as having huge risk. Their margin is not even SPAN minimum and they want to charge extra for "large risk" positions (according to their definition, obviously most people trading futures have stops.) Just because I am using a tight stop I am being penalised. There is virtually no chance that the liquid markets gap through my implemented stop to get anywhere their projected loss.

Even if the loss gets to that big, they liquidate account anyway based on net liq value, and what's a few dollars going to do to cover up the loss, absolutely ridiculous. Have been with them a few years but time to migrate most of my trading now.

 

[fiftyeight]

I did a AUD.USD trade so I could withdraw some funds.

It now shows as an open position and therefore has p&l which alter my balances.

Can I close or delete this