Experience Interactive Brokers - 2nd chance

#61

BTW, I logged in to Account Management today and my heart stopped for a moment as it shows NAV $0.00. When I logged in to WebTrader it shows the correct value. Oh, the modern software, a lot of features, even more bugs…

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#63

Hi, I am working with the IB simulated trading account for practice. I have also sold 1M$ for Swiss Francs CHF (USD->CHF) to set the “right” start condition (i.e. to have CHF in my account). However in “balances” of my “account” is shows only USD (1,001,037 USD to be precise); should my balance not show the CHF (i.e. the CHF which I received from the sale of the 1M$)? why is the CHF (which I received from the sale of the 1M$) not showing in my account balance?

The fact that my account is showing a total of 1,001,037 USD and not 1M USD indicates that the sale of the 1M USD for CHF must have executed ok - the increase in the total in the account must be due to the value of the CHF increasing relative to the USD (in the unrealized P&L there is shown 1’089).

So, since my account is showing USD, how do I now go about selling the CHF (to simulate what I would do when I open a real account and initially deposit CHF and then convert to USD) - I guess that I will just buy USD and IB will automatically use the CHF which is, lingering somewhere, in my account.

Thanks for your help.

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#64

I’m late in joining the game, so just read on the Stock Yield Enhancement Program now. So I’d like to come back to some concerns raised a while ago:

Right, you loose SIPC protection while the ETFs are loaned out. However, you get 102% of cash (collateral) in return during the loan. So IIUC in case the shit hits the fan you’d “just” be sitting on those 102% cash instead of the ETF (which of course could be less than the ETF is actually worth - but at least you’re protected a fair bit.

What additional risk? What I can think of is that IB doesn’t manage to return you the loaned ETF. In that case, from what I understand you’d “just” have to live with the 102% cash collateral. So is that really a risk? or a big risk?

Right, for US citizens paying tax in the US the dividends are not qualified but you instead get payment in lieu of dividends - which are taxed substantially higher than qualified ones in the US.

But IIUC in Switzerland dividends are treated as normal income anyway - and I’m not aware of any difference between qualified and in lieu - or am I missing something?

So overall I’d say with the SYEP:

  • you risk sitting on 102% cash collateral if the shit hits the fan (a risk indeed, but only on additional gains since loaned out, not on the absolute amount)
  • you have a very high likelihood of getting “dividend payment in lieu” instead of normal “qualified dividends” - but IIUC in Switzerland that’s irrelevant
  • you support the evil short sellers (that’s a moral question though)
  • you get a minor additional yield instead (which is probably to be treated as income in Switzerland too I guess)

Is this too good to be true?

Mind you ETFs themselves do this all the time (see e.g. https://www.ishares.com/us/education/securities-lending) - albeit they have actual control over counter-parties, which you don’t have with IB

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#65

Any more opinion on the Stock Yield Enhancement Program? I think it could be another 0.05% gain with relatively low risk…

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#66

Is it working with ETF?

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#67

yes. In the IB Client Portal go into ‘Account Settings’, then ‘Trading Permissions’, then click the ‘?’ next to the Stock Yield Enhancement Program: that’ll show you an estimate on how much you might be paid. I have no idea how good that estimate is, esp long term. Also, my remaining two concerns are: (1) is it really low risk, (2) does this ‘in lieu’ thing have any CH tax implications.

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split this topic #68

10 posts were split to a new topic: Fx Trading and Taxes

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#69

anyone knows more about this?

Also, am wondering if the tax guys could consider you a professional trader because of this … but then again, all that you have to do for this Stock Yield Enhancement thingy is select a checkbox. So I’m really not expecting them to treat this as pro. In the end it would just be some additional dividend style income?

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#70

Like @hedgehog said, did you check if there was any “enhancement” for the stock you’re holding? Last time I checked VTI & friends weren’t heavily shorted so did not seem worth it.

(where did your 0.05% come from?)

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#71

yes, for one of my “exotic” holdings they sometimes have “enhancement” of a couple percent - then they deduct half - but even then it looks like for that particular position there would be quite some enhancement.

The 0.05% come from calculating that one position up to my overall allocation.

You’re right, it depends on what you’re holding. For common things like VT there’s not much on offer indeed.

So my questions remain: (a) ‘in lieu’ tax implication and (b) professional trader status because of this…

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