Margin Account

[garfield71]

Hi,
I'm with interactive brokers, my account is in $USD and i trade solely US equities, as an Australian i can not get a margin account with them, i use margin sparingly but if conditions are in my favor I'd like to have it there to use, is there any way to work around this or can someone recommend another broker where i could get margin, IB has everything i need except for this margin situation, thanks

 

[rcw1]

Hi,
I'm with interactive brokers, my account is in $USD and i trade solely US equities, as an Australian i can not get a margin account with them, i use margin sparingly but if conditions are in my favor I'd like to have it there to use, is there any way to work around this or can someone recommend another broker where i could get margin, IB has everything i need except for this margin situation, thanks

Good evening garfield71

Nice hope it has been doing well for you.
For mine:
Get a bank loan in Australia and draw on it when needed. Deposit from that bank into the interactive brokers transaction account and go from there. USD - well that's another matter ... exchange rate easy enough to manage.

Kind regards
rcw1

 

[KevinBB]

I'm with interactive brokers, my account is in $USD

I'm retired, so IB will only give me a cash account. No problems. As @rcw1 points out, the bank loan may be the best option. However, I'd like to question as to why you want the account in USD.

I have an IB account, and trade only US based futures, mainly the more liquid contracts on Globex. My account is in AUD.

If USD is required for mark to market, IB automatically transfers from AUD to USD. It was the same when I was trading US ETFs. If I bought a US ETF, and there was insufficient USD, then IB would automatically transfer from AUD to USD to cover the purchase.

If you don't like the idea of auto transfer, you have the option to manually transfer from AUD to USD as needed.

Now, back to my original question. The reason I keep the account in AUD is that it makes it really simple for tax purposes. In theory, under Australian tax law, each trade (if you are a trader) is to be reported in AUD. So, if your statements are in USD that raises all sorts of problems. You need to keep all records yourself, on a daily basis, instead of relying on IB's statements.

It is simply much easier reporting wise to have the account, and all statements, in AUD. Just let IB manage the currencies.

KH

 

[DaveDaGr8]

My 2C worth.

As Kevin Pointed out, keeping it in AUD is best for tax purposes. There is no need to domicile in USD, just adds work that IB will do for free.

A margin account comes with a number of benefits other than margin.
1 - there is no holding period, ie quick turnaround Buy/Sell/Buy you don't have to wait for 2-3 days to Sell. If you intend to trade short term or day trade then margin accounts are essential.
2 - you can Buy & Sell on the open. ie, transferring a position is simple. In a cash account you need the cash on hand which may mean a delay in your trading.
3 - You can elect to transfer your cash into USD OR alternatively you can simply borrow the USD offset against your AUD. IB Credit you the interest from your AUD position and subtract it from USD. I don't think i've ever paid for interest doing things this way as long as the net is positive and you're not technically borrowing any money. Every now and again when the aud/usd makes big moves i might transfer cash one way or the other to pick up a few percent, but this would only be once or twice a year.

I don't know the best way to set up margin with IB today. Years ago i set up a company and trust to trade through and i still use this system today and still works like it used to.