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Broker for buy and hold US stocks: IB questions

Discussion in 'Brokers' started by lurker123, Feb 9, 2012.

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  1. lurker123

    lurker123

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    I'm thinking of creating a account with IB so I can invest in US stocks. I'm currently with westpac and plan to stick with westpac for my daily trading. Basically what I want to do is put some money in a US stock say 5k and let it sit there for a few years without any active trading. Looking at what westpac offers it seems if I don't actively trade US stocks I will be charged $70 or something every year for holding the stock. My question is if IB has similar chargers. Also I notice that IB requires a minimum of 10k to start trading. If I set up a account with IB transfer the 10k and invest say 5k can I transfer the other 5k out? Will I still be able to execute a sell order if I have no money in the IB account?

    Any recommendations for a broker that would suit what I want to do would be appreciated.
     
  2. TeleSonic

    TeleSonic

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    Hi lurker 123

    If you're only going to buy a handful of stocks and sit on them it would be much simpler to do it through a full service broker locally. You'll pay a bit more for brokerage but have none of the other issues you allude to.

    IB offers cheap brokerage and great functionality for self directed traders, but it is geared towards active traders with minimum deposits / activity. If you're adamant you want an IB account, sign up with a local broker who utilises their technology. While you will pay more for brokerage than you will going direct, it will be less than a full service broker will charge, and you will be able to open an account with $5K and not be hit with fees. Ring around there are lots of IB referral partners in Australia.
     
  3. village idiot

    village idiot

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    Sounds like you're doing it the wrong way round. If you're going to open an IB account, why wouldnt you use that for day to day trading since its cheaper?

    Pretty sure IB have a $10 per month minimum activity fee, which means you pay $120 pa if you dont trade, so not suitable for buy and hold small amounts if you do no other trading in it.
     
  4. lurker123

    lurker123

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    Thanks for all the help.

    Currently i'm mostly trading options with westpac and I sorta assume IB will have similar option trading charges. I also like the interest westpac gives me on the linked cash investment account. Wasn't really sure if IB gave interest on uninvested cash. I also prefer dealing with a major australian bank since even if there might not be any difference in safety, just makes me feel safer. Anyway once again thanks for all the help, I think I'll just stick with westpac and take the yearly fee hit.
     
  5. village idiot

    village idiot

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    On aussie stock options IB are $3 for 10 contracts, min $2. What are westpac?
     
  6. lurker123

    lurker123

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    Westpac with the linked cash investment account is $38.95 or 0.35%, whatever is greater is charged.
     
  7. wotda

    wotda

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    Have you tried optionsxpress?

    There is no minimum in opening are account.
     
  8. Movendi

    Movendi

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    Sorry to revive an old thread but i'm in the same position as the OP.


    I want to invest into 2-4 U.S stocks long-term 1-5 years. Locally, comsec and etrade offer global shares at high brokerage which is not too much issue in my case, but their ongoing custodial fees for holding these stocks makes me question if it's worth investing in US stocks with these guys.

    But it seems that may be the same with Interactive Brokers. So i'm not sure what other alternatives i'm overlooking to invest U.S stocks for long term.
     
  9. bellenuit

    bellenuit

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    If you plan to continue to use another broker for trading Aussie stocks, why not consider trading those under IB as well. Apart from the low brokerage on Aussie trades, the brokerage on those trades will offset or eliminate the minimum monthly brokerage of USD10 that IB charges. That way you don't really end up paying a "Custodial Fee" to IB to hold your US stocks.

    It's not actually a custodial fee with IB, but simple a minimum monthly brokerage charge that applies against all your trades; US, Aussie and others if applicable. So if your brokerage for the month is the equivalent of USD6, you will be charged an additional USD4 to meet the monthly minimum brokerage. If monthly brokerage is USD10 or greater, then there will be no additional charge, other than what was incurred. The balance charged to meet the minimum monthly brokerage of USD10 is charged in your base currency, so once you have bought your US shares, you do not need to keep a USD balance just to meet such fees, is you do not want USD margin.
     
  10. Movendi

    Movendi

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    Yea but i'm not an active trader. I buy/sell stocks on average 5 times a year or 2
     
  11. jlryan87

    jlryan87

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    Someone please revive this thread :1zhelp:

    I am in the same situation. I have been holding stocks using ThinkOrSwim for quite a while but very unfortunately TD Ameritrade took over TOS and not long after they altogether dropped Australian clients. At that time I have limited time for the transfer and so took an easy plunge to the long timer Interactive Broker. Recently I just found out that I have been charged 'inactivity fee', which is $10 if no trades are made in a month. I also think that the first three months of the year have no fees. Nevertheless I think it is a waste because the platform is seriously mediocre and there is not even a live data subscription in place of the $10 spent. Back during the days the TOS platform stood next to none, and it is actually free to use with live market and Level 2 data. Back then, IB did not have inactivity fee either.

    Does anyone have a good broker that they are using?

    PS. The $90 annual fee could be steep but IB does have the convenience of letting Australian clients putting in free local funding.
     
  12. bellenuit

    bellenuit

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    Yes, for sit and hold IB can be expensive due to the minimum monthly fee. I also wish they would include realtime quotes and Level II data for free. However, for Aussie stocks I can get that from my other brokerage accounts (Commsec, nabtrade). For US I don't have access to Level II, but you can get live quotes from a number of sources; Nasdaq website, Google Finance.

    However, overall I like their platform and commission is dirt cheap compared to the competition. Particularly for US trades of high value stocks. I can buy or sell 20 or 30 Apple for a total commission of just 1USD (their minimum on US trades).
     
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