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So I'm thinking of joining Interactive Brokers

Discussion in 'Brokers' started by RazzaDazzla, Aug 8, 2008.

  1. RazzaDazzla


    Likes Received:
    Jul 25, 2008
    So I'm thinking of joining Interactive Brokers (IB).

    What should I be aware of? Cheap as chips (compared to full service brokers and even aussie online brokers) share and options trading.

    Though I believe there is a minimum spend of $10US a month.

    I also understand I will have to pay $49.50 p/month for live ASX data. I know I could get this data for free from sources such as my commsec account (hit refresh) but I guess it will be easier to have the price data their in the IB web trader work station (TWS).

    I currently have some long term shares sponsored by ABN Amro so I will look at keeping these where they are and not transfering them.

    Is transfering money from Aus bank account to IB account as easy as a third party transfer? Or do I have to transfer money to an OS IB account and then worry about forex etc?

    From what I read, I also understand theirs no minimum balance for the acccount.

    I also understand they will pay the interest rate - 0.5% on my balance in the account. (so currently that is 7.5 - 0.5 = 7.0%).

    Anything else I should be aware of?

    My only other concern is this;
    some 5+ years ago when trading options, I had a credit call spread over RIO. Due to a RIO share buyback, I was exposed to some $50,000 that I apparently owed! My broker at the time rang me sometime after the event almost in tears and basically said "Hey, you owe some $50,000"

    After writing a leter reminding my firm that I had been paying for full service brokerage and that I should have been forwarned about this event thus letting me choose wheter or not to expose my self to this $50,000 shortfall, they took the hit for me.

    After all my readings and understandings of options, I had completley and uterley no idea that a share buy back would mean I would need to fork out some $50K.

    So if I'm trading options by my lonesome with IB, how can I avoid any nasty suprises like this?
  2. cutz


    Likes Received:
    Aug 10, 2008
    G'Day Razza,

    I am fairly new to trading options myself so i was curious to know how you ended up with a 50K loss on a credit call spread, i would have assumed the higher strike bought call would have capped your losses.
    Keep us posted on your progress with IB, i was looking at joining myself.



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