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I use IB and am looking to get into day trading. Does anyone know how to set up a margin account on IB?

I know it has to be through a Pty Ltd or a trust... I have no idea on how to 'set up' one.

I heard someone saying that you can make an LLC (I'm guessing this is the same as a company or Pty Ltd) in the US for just $800... but is it as simple as that? Or is there more to it?
 
Sorry, I'm not sure how to edit my own posts, but one more thing to add:

Say if I can apply for a margin IB account if I trade through a Pty Ltd company, can't I set up my own Pty Ltd company? Just following the steps according to the ASIC website: http://www.asic.gov.au/for-business/registering-a-company/steps-to-register-a-company/

It only costs ~$800 to do that. So why aren't more people doing it? Am I missing something here?

Sorry I'm not very business literate yet.
 
Lantus said:
Am I missing something here?
Click to expand...

Hi Lantus,

Probably not, just a barrier.

There are things to consider like higher accountant fees, yearly ASIC fee plus different tax rate/rules compared to an individual. One big one is you can't claim loses in following years.
 
Sir Burr said:
Hi Lantus,

Probably not, just a barrier.

There are things to consider like higher accountant fees, yearly ASIC fee plus different tax rate/rules compared to an individual. One big one is you can't claim loses in following years.
Click to expand...

Thanks for your reply, I appreciate it.

How does one trade shares through a company? Do I need to be an employee of a company to trade through a random company?

Again, I have limited understanding of how this all works.

So for an individual like me, who has let's say $150K in capital available for investing/trading but is not part of a company/trust, what would be the easiest way to set up a margin account via Interactive Brokers?

Thanks and I highly appreciate any help.
 
Hi Lantus,

I got an accountant to setup a company but think you can do it yourself.

As director you can setup a company (margin) account with IB and trade.

You will also need a bank account in your company name to send money to your IB account. I use a Westpac business account and costs nothing.

Transfer personal $'s to your company account then to IB.
 
Sir Burr said:
Hi Lantus,

I got an accountant to setup a company but think you can do it yourself.

As director you can setup a company (margin) account with IB and trade.

You will also need a bank account in your company name to send money to your IB account. I use a Westpac business account and costs nothing.

Transfer personal $'s to your company account then to IB.
Click to expand...

Thanks again for your swift reply.

I don't actually have any company in mind at the moment.

Can I just make my own ambiguous company with no purpose/goal where I am the only person in charge and have no employees? And no plans to purchase/sell any products and services?

Thanks again.
 
Actually I just signed up for a new company via https://www.ecompanies.com.au

I am the director and sole officer and shareholder.

Does this mean I can get a margin account on IB once the company is approved by ASIC?

It almost seems too easy to me? Although it did cost me $600 lol.
 
Sir Burr said:
Transfer personal $'s to your company account then to IB.
Click to expand...
Just be careful here you cannot treat your cash and the companies cash as one and the same. As a director you can lend money to the company interest free. This should stay on the company books as a liability. The company can then pay back the loan to you without any issues. However any company profits will need to be taxed at the appropriate corporate rate and can be paid out to a shareholder as a dividend.
 
Lantus said:
Can I just make my own ambiguous company with no purpose/goal where I am the only person in charge and have no employees? And no plans to purchase/sell any products and services?
Click to expand...
You can have a company where its sole purpose is to invest or trade shares. That's no problem.
 
^ Thanks for all your help guys!

I just sent the certified copies of the 2 required documents to Interactive Brokers. Hopefully I have my margin account approved by the end of the week.

Honestly, it was quite easy, and I don't know why more Aussies aren't doing it.
 
I have only recently started using an IB cash account (not ready to register a company yet) but I was wondering about GST on commissions. I don't appear to be charged GST which makes sense because it's a US company but I use Stator AFM to record all my trades and the default cost profile for Interactive Brokers includes a GST component. Will I have to pay GST on these trades when I do my tax return?
 
I think I have read here somewhere that the following will happen in cash accounts (individual non-margin), but would like confirmation before doing so.

I have an individual account so no margin is allowed. I want to buy some US equities that will cost more than the current balance of my USD account. I have sufficient AUD balance in the account to more than make up the shortfall. Do I need to convert sufficient AUD to USD to make up the shortfall before I make the USD equity purchase, or will IB automatically do it after the purchase to ensure my USD balance doesn't become negative?
 
Indoril said:
This post confirms that. https://www.aussiestockforums.com/t...e-with-interactive-brokers.33308/#post-955321
Click to expand...

Thanks, Indoril. Your link suggests a slightly different process, but one that is actually better again. It seems to suggest that you can buy US stocks with a zero USD balance and that will be OK so long as your overall balance (AUD + USD) is above the minimum account requirements. (AUD 500 or AUD equivalent of USD 500 I think). IB will allow your USD balance to stay negative so long as that requirement is met.

I was assuming that IB would, immediately following the stock purchase, convert sufficient AUD to USD to bring the USD balance back to positive. I much prefer the method described in the link.
 
I've just received a reply on that topic directly from IB and it confirms what was said in the link, but with additional information in respect to converting to USD prior to the purchase.

Currently there are restrictions on FX trading for Australian resident clients as requested by the Australian Securities & Investment Commission ("ASIC"). Due to this regulatory restriction, Australian resident accounts are not allowed to initiate new non-AUD Forex positions (i.e., a currency position that is leveraged or financed) and thus your account is not allowed to convert the sufficient AUD funds to USD prior to purchasing the US shares. After the US Share trade is executed for the trade value more than your current USD balance, your account will hold a debit balance in USD cash and you may do the currency conversion to cover the debit balance against the Australian cash. There will be no automatic currency conversion placed by the system as long as your account's margin requirement is maintained.
 
brisman said:
IB has established an Australian subsidiary Interactive Brokers Australia Pty Ltd (IB Australia), who holds an Australian Financial Services Licence, number 453554, so looks like we're back in business!
Click to expand...


Hopefully this means margin accounts for individuals soon! Can't wait to tell my big 4 broker to get stuffed with their ridiculous fees.
 

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