Experience Interactive Brokers - 2nd chance

Investing / Brokers
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Dear all,
I tried to convince myself end of last year to go for IB (see here) but in the end I was scared off by the GUI. I ended up with CornerTrader which is fine so far. But recently this great community nailed down [link] how much cheaper it is if you go with IB. So, here is my second attempt documented, hoping to hel out all those shy mustachians in a similar situation!

=> I remember having huge difficulties in navigating the IB GUI or doing actions when I don’t have the feeling I understand what I do. maybe this time goes better!

#Start
Ok, where do I start? with google! entreing Interactive Broker gets me directly to their webpage. I know from last time, i can sign up for a trial account (paper trading). I download their software, run it et voilá:

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the tour continues …

quite overwhelming at first, but hey, they offer a guided tour!
the second slide already explains what all the sub windws are for, great! confusion reduced!

Slide 3 points out how I add tickes to the watchlist, and I instantly add VT:

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I guess the upper window just shows all string matches for “VT”.

So, I found my way to setup my watchlist, accordnig to my current Idea of my future portfolio:

consisting of the ETFs and the USD.CHF, which would buy me USD from CHF.

Question: what difference does it make if I first buy USD.CHF and then VTI or if I just buy VTI and let IB do the conversion?

Since the papaer account started with USD, I just sold 1M$ to set the “right” start condition. therby getting into debt already^^:

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but i cannot find any log for this atm…

[to be continued]

[edit]
so my conclusion is: get the paper account and just implemet your personal portfolio a few times/ rebalance. in the beginning there is more information than you need, but with the paper account, try it out and quickly narrow down the few things you need. it works like a charm!

3 Likes
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Well I also needed a 2nd try for IB (I ended up at Saxo which is like CornerTrader whit cancer).

Also in the trial you do not get access to the mobile app which is really nice.

My account has no margin (i did not want it and I am also not allowed to have any because I am younger than 21) so the going into debt is not really a problem and it also does not let you make orders that exceed your liquidity.

I am not sure what the difference between buying directly and buying usd first is but I do not want too much chf laying on the account because of the negative interest.

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I don’t think negative interest on CHF applies to us (unless you have more than 100’000.- in CHF holdings).

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I might have misread it but there was a warning about negative interest on CHF when I opened the account.

https://www.interactivebrokers.com/en/index.php?f=1595 seems to agree with you, I should really, read this stuff more carefully.

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Try their quick trade web interface, It’s much simpler - everything exactly to the point of placing a quick trade as name suggests

I don’t think they’d do such conversion automatically for you. You’d just end up in the minus in USD if you’re on margin, and will have to trade USD/CHF sooner or later to cover it

3 Likes
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I think that’s correct, you have to buy USD yourself. If you don’t have a margin account you also have to wait for trades to clear before being able to do something else with the money. I chose not to have a margin account for safety, I don’t want to be able to spend money I don’t have.

Really? That’s too bad, the mobile app is great!

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thanks all for your comments!

no margin

at least in the free version, i have not been actively offered a choice. clearly, i dont want to engage in any marging stuff. so i am totally aligned with

that’s coming next, once i find the button. havnt looked for so far.

ah ok. so i will have to anticipate how much USD a position will cost, then exchange CHF to USD accordingly, and then buy it.

I really have no need for a mobile app for 2 reasons: it poses an additional unneccessary risk in terms of cyber security, and i don’t need access anywhere anytime to it. feels pretty un-mustachian :wink:

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I really don’t understand why you’re all so afraid of margin acoount. It’s not like you have to use it after you enable it. It does make everything a lot smoother, for example you can sell a stock and buy something else immediately with the proceeds without having to wait for settlement. You’re not even on margin during this time, because your buy will also only settle in a few days.

1 Like
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On the plus side, the app is actually easier to use than the full-blown software, so it does help you to learn the ropes. Speaking of cyber security, don’t forget to activate 2FA!

Really? I always assumed you were essentially borrowing the money for the next order so they’d charge you for it. It probably wouldn’t be much because it’s only a couple of days, but still… Anyway, what I do is buy USD when they’re cheaper and then just hold them until I have to place the next order. You get some interest on USD, but none on CHF.

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Yes: Understanding interest charges when the net cash balance is a credit | Knowledge Base

“account holder is not assessed interest charges on funds borrowed to purchase a security until such time that purchase transaction settles”

If you sell and buy, you’ll get the money from buyer in 3 days at settlement, but likewise also have to pay to seller only in 3 days, IB determines interest using settled money for both cases

2 Likes
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Another nice thing about margin account - let’s assume you’re fully invested and then IB needs to charge you something. In a cash account they’ll sell one of your securities to pay for their fee. Not nice. In margin account you’ll just get a little short in CHF and you can get the money to cover it whenever at your convenience

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It does have a read-only mode which allows you to check if your orders filled an stuff without doing the 2fa, this might actually increase security as it reduces the amount of times you are fully logged in. But if you want to use it is your decision.

Apart from not being allowed to have it, i just do not like to have “debt” or to use it accidental. But that sentiment may change if I see its use. I used to be extremely anti CreditCard but now I use it for everything because it is convenient and easiser to track spending than cash. Of course I always pay it of in full (LSV FTW).

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The risk with the IB is that their interface is so horrible. you won’t even know you are on margin

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Quick trade interface is very simple and straightforward, try it!

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The quality of the interface is also the reason I do not use IB even if I would really like (I went to Degiro finally).

I tried multiple times the interface but it’s so complicated that I always fear of doing something wrong and the risk of errors is even higher as you are on a margin account.

Before giving up I almost thought of doing everything via their python API as even that scared me less than their interface :wink:

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Ok, it might be kind of complicated but it is not that hard. It just has way more features than you would ever need.

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Yeah, the first attempt also scared me off, but now that I’ve done a few trades, it’s getting to be second nature. I’ve also started without a margin account, but once I know exactly what to expect from the UI in a normal scenario, I’ll probably open a margin account.

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+1 on this
I also use the WebTrader: simpler and quicker, it fits my basic needs perfectly…

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Right.
If you don’t want to “calculate” the exchange rate you can sell CHF.USD instead of buying USD.CHF; this way you place exactly the amount of CHF you want to change

1 Like
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so i got myself a little compfortable now.
what i am dearly searching for are the reports in PDF form - dividends, position, tades, etc…

i cant’ find it, anyone can help me? the help says Click Reports > PortfolioAnalyst but i cannot find any report button in the TWS software :smiley:
what am i mising?

… the web trader version has some severe loading issues on my machine, on top of this :frowning: