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Most liked posts in thread: Interactive Brokers

  1. RowanC

    RowanC

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    Interactive Brokers is pleased to announce the establishment of Interactive Brokers Australia Pty Ltd, which is headquartered and regulated in Australia and which will provide all IB services to our Australian clients.

    More details here...

    Looks like IB are coming to the party with the regulators. Will be interested to see exactly what all that means for Aussies. Hopefully it means full service with margin, clearing etc
     
    Indoril, So_Cynical and bellenuit like this.
  2. bellenuit

    bellenuit

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    I just got an email from IB regarding the final steps I need to take to qualify for margin on my personal account. It requires you to consent to Equifax acquiring your financial information. I gave my consent but then it listed out all banks and asked me to chose which ones I had accounts with. After I made the selection, it then asked me in regards to the first bank I selected - to give them my account number with the bank and my login password.

    IMO this is completely unacceptable no matter how strong IB/Equifax security is. I think you will likely get in trouble with your banks if any fraudulent transactions are made on your account even if due to something completely unrelated. I remember having had a fraudulent transaction once and the bank asked me if I ever had disclosed my account information to anyone. I said no, and eventually was reimbursed by the bank. I don't know what would be the case if you answer yes, that you had given you account information to a third party. It certainly breaks all the guidelines that the banks publish in their booklets on online banking and would probably give them an out from reimbursing fraudulent transactions.

    I've decided to not bother on my personal account particularly as the max is just $25K. I have also applied for margin on my Family Trust account and I haven't heard back on that yet. It didn't mention consent to Equifax intrusion (or alternatively a recommendation from your financial planner) when I did that application, so hopefully it can go through without this nonsense.
     
    blue0810, IFocus and freebird54 like this.
  3. brisman

    brisman

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    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!
     
    PinguPingu and bellenuit like this.
  4. bellenuit

    bellenuit

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    I agree, IB is very cheap when it comes to transferring US dollars to AUD. I can see where the 44 day hold would be an issue. I don't know any way that might be of help to you.

    If you do decide to wait the 44 days one thing to consider is IB charge a withdrawal fee of 15 AUD for the 2nd and subsequent withdrawal per month from your AUD balance to your bank. So do it in one chunk if you can or split over several months.
     
    rodr and noirua like this.
  5. jlryan87

    jlryan87

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    bellenuit, ASIC has been bullying IB and we all know that. All other brokers including the dodgier ones get to offer margins but IB on the other hand, which itself is a major operation listed in the NASDAQ and a component of S&P 400, surprisingly struggles to get the same basic offering approved for a few years already. It is an obvious murder of a genuine competitor, and we are the collateral damage. ASIC is literally murdering Australians (financially) on the pretext of protecting them, and the real conspiracy is really just to protect certain businesses as they cannot compete with IB. This does not sit well with me.
     
    f_oli and freebird54 like this.
  6. Sharkman

    Sharkman

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    nothing strange about that at all. that 2 day delay is what's known as spot, and it's a convention that's observed pretty much universally.

    when you put in an order to sell USD / buy AUD, IB goes into the FX spot market to obtain that AUD for you. whoever they obtain it from won't deliver the AUD to IB until the spot date, as that is the market convention. very few instos will want to wear the risk of letting you have the AUD before they've taken delivery of it themselves, that's why they make you wait 2 days.

    now if you go to ANZ, CBA etc. or any other retail currency exchanger, they let you have the currency straightaway, even though if they wanted to exactly "square" their position, they would also need to go into the FX spot market and wait the same 2 days as IB before they can take delivery of the currency you just bought. the difference is they're quite happy to wear that risk, since of course they are more than compensated for it by the massive spreads they're making off you.

    don't know about you, but personally i'd much rather wait the 2 days and get IB's close to wholesale rates, than pay the rip-off rates of retail exchangers to get it immediately.

    https://www.investopedia.com/terms/s/spottrade.asp
     
    chipotle and peter2 like this.
  7. Sharkman

    Sharkman

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    i had been trading options thru IB LLC under a corporate trust account for almost 10 years with margin, until being migrated over to IB Aust last month.

    the impact of losing margin is not actually that bad for options trading, it's more an inconvenience rather than a major issue. i clarified this with IB on their live chat. as far as collateralising short gamma positions is concerned, they still use the same margin calcs as IB LLC. so no need to have sufficient cash to fully cover naked puts etc. the only new limitation is we can't let our cash balance drop below zero, so for options trading that means closing out/rolling positions on expiry instead of taking delivery if that will drop your cash balance below zero.

    for buy & hold that limitation is going to be a problem though. but i only use IB for options trading, for the larger buy & hold component of my portfolio i just use a CHESS broker. i don't care that much about brokerage if it's a buy & hold position (the difference between paying 0.11-0.12% vs IB 0.08% is chicken feed if you spread it out across the multiple years that such a position would be held for), and i'd rather have the majority of my holdings under CHESS sponsorship instead of a nominee account. as safe as IB seems to be, you just never know.

    as such, i'm not that worried about the loss of margin from the IB Aust migration. it's the loss of SIPC that's the bigger concern to me. my IB account is currently hovering around that 500K USD SIPC limit, i've been drawing funds out periodically to keep it within SIPC coverage for risk management purposes (some might say paranoia). now that we no longer get SIPC, i'm thinking about dropping my IB account to around 200K AUD or so as stocks collateralising covered calls slowly get called away, scaling back my options trading activity, and using the proceeds to buy up more ETF units under a CHESS broker, bringing me more into line with the rest of the FIRE movement.
     
    f_oli and freebird54 like this.
  8. bellenuit

    bellenuit

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    I do all my accounts on my own spreadsheets and gave them to an accountant when I used one a few years back. I now do my accounts for my company and my personal tax myself. I print and store online the annual statements from IB and keep them as proof of my trading for the year, should I ever be audited. I find it easy to maintain the spreadsheet so long as I do it at the end of each day I trade. That way I can see my accounts are correct by comparing with the relevant IB balance.

    I agree, it would be pretty hard for an accountant to make sense of their reports if he/she was not used to them. The transactions they create for stock offers, share buybacks etc are almost incomprehensible.

    You can get a report on franking credits but not until after the end of the tax year. It is available under the tax reports section about mid-July. I usually find a couple of errors in it though.
     
    freebird54 and StockyGuy like this.
  9. Sharkman

    Sharkman

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    you can definitely use long stock holdings as collateral for short calls, even post migration to IB Aust. i do this all the time. when they say we no longer have access to margin under IB Aust, what they actually mean is that your cash balance cannot drop below zero. collateral is still calculated using the old margining calcs eg. Reg-T.

    you can still sell naked puts even with no cash in your account, provided that you have the collateral for it under the old margining calcs. you just can't let them get assigned if you don't have the cash to take delivery, otherwise you'll get margin called and they'll sell off enough of your holdings at random to raise the cash needed to take delivery.

    don't know about CFDs, don't trade them myself.
     
    Chronos-Plutus and fiftyeight like this.