IB & "large" transactions?

Investing / Brokers
1

hi

I have a chaotic portfolio of various stocks accumulated over the years at IB with a NAV about 600k.

I am sick of this mess, and I’d like to convert all of it to a one-fund portfolio of VWRL, VT or maybe the ishares all-world.

My question is: after liquidating all my small positions, if I just entered an order of 600k worth of either of those ETFs above, would i have to worry about weired stuff happening?
like should I bother for limit orders, oder any of those IB specific order types? any tips? thanks!

2

VT during market hours (be sure to do it >30 min after open and <30min before close) is so liquid that it would not matter much. But I would use IB‘s mid price feature with a safety limit and maybe split in 2 chunks or something like that, just to be sure. It costs you not much effort to do this, but gives peace of mind.

Also highly recommend going for VT of those. It‘s more tax efficient than VWRL and better diversified (includes small caps, while vwrl doesnt).

Also the TER (VT 0.07 vs vwrl 0.22%) savings alone at 600k are 900CHF per year that you save.

5 Likes
3

If you don’t have a margin account you will need to wait 1-2 days for the cash from the proceeds to settle before you can purchase again.

4

I have seen some mentions that US stocks exchanges switch to T+1 settlement, while European exchanges run on T+2 schedule, I guess. Anyone knows something specific? Wouldn’t be fun to pay interest on 600k, even if for one day.

5

If all transactions have the same settlement, as long as you don’t sell the same stock you bought with unsettled funds (freeriding) you should be fine on cash account.

6

US stocks change settlement to T+1 on the 24.05.2024, that’s fixed. EU and CH stay on T+2 for the time being, but discussions are ongoing to switch to T+1 as wrll in 2025/2026.

Even if overdraft interest would be 10%, this would be less than CHF 165 for one day. Also you just need to time it correctly to have settlement for all buy/sell on the same day to avoid interest.

1 Like
7

Being out of the market costs more on average.

8

if I just entered an order of 600k worth of either of those ETFs above, would i have to worry about weired stuff happening?

I had to place a VT order for approximately the same amount few weeks ago and after waiting around 20 minutes for a single MidPrice LMT order with the IBALGO set to be patient, I then decided to cancel it and split it in 100k chunks and the orders did fill in few seconds.

Check that you use the Tiered pricing, I think it is cheaper overall.

1 Like
9

Thanks for the hint. Did you use then the patient mode with the 100k chunks? What would other do in terms of offer types/ configurations?

10

Last year, I moved my VWRL from SQ to IB, sold it, changed the CHF to USD and bought VT. Everything in one day. Not sure, why it worked. I have a cash account. Later, when I bought smaller chunks, I always had to wait for the cash to settle after the currency exchange.
So I guess with a cash account, you can be lucky or not.

11

Did you use then the patient mode with the 100k chunks?

Yes. Same settings between the single large order and the multiple 100k orders.