Interactive Brokers for dummies


#1

Hi all,

I wondered if anyone would be interested in compiling a step-by-step guide to purchase ETFs at IB, after successful registration.
It would be helpful for newbies like myself.

If one had a list of tickers to buy, what would be the steps and things to watch out for while using TWS?
Strategy is simple: buy monthly or quarterly a specified set of ETFs specified by above tickers.

Also, from the CH point of view, which stock exchanges are recommended to be trading on?
E.g. VWRL is traded at LSE, AEB and EBS.

Thanks,
D


#2

Don’t. Use mobile app or web ui, much simpler and friendlier interface

US exchanges: NYSE ARCA, BYX, etc


#3

check



and after that, ask again what you need :slight_smile:


#4

I tried to convert the currency using WebTrader Demo. There you start with 500’000 USD, so I sold 500’000 USD, getting back CHF (normally you do the opposite). However, this created a negative USD position. Does this position go away EOD or is it considered a loan? Why is my USD cash not visibile as a position at the beginning, only in market value? Is this why @_MP wrote we have to download the software?


#5

You’re short only 10 USD in there - commission for conversion. The big negative thing is a virtual fx position to track profit/loss on fx, you can ignore it or clear somewhere in UI.


#6

Now instead of SELL USD I made a BUY CHF order. Now I have 100’000 CHF cash and a CHFUSD position. So this position will stay there forever? If i keep sending CHF to IB and converting to USD, it will keep growing? If you are sure it does not generate any running costs, it is actually a nice informative thing. I can track how much of my growth/loss is due to currency fluctuations.

If that’s the case, then I guess the guide from @_MP is a bit misguiding. And what is the difference between IDEALPRO and FXCONV? For IDEALPRO the bid-ask spread on 100’000 CHF is just 7 USD.

I found this on some website. But that is the practical difference?

In case you would like to make a simple currency exchange (without a currency speculation), please select FXCONV as your destination. In a different scenario, where you would like to make a speculative trade, the right destination is IDEALPRO.


Closing position on a currency bought
#7

As I use the web platform, some months ago I called the IB hotline and got the same answer. They confirmed that these are “virtual” FX positions (they just show you the currency evolution since when you bought/sold), also nothing to worry about them.
I’ve read somewhere that if you don’t want to see them you can get rid of them with some procedure using the Java TWS application, but never tried it.


#8

Here’s how you get rid of those virtual FX positions:

After you do that, the positions will disappear the next day. Selecting FXCONV saves you from having to do this.


#9

So I opened an account at IB. I sent 50’000 CHF from PostFinance as “Giro International” and 49’990 CHF arrived at the other end (it arrived after 2 days). Anyone knows what happened to the missing 10 CHF?

Edit: I tried to exchange CHF to USD using WebTrader and it said

“SELL 49,990 CHF.USD Forex” No IDEALPRO trading permissions


#10

Stolen by post finance or another bank. SWIFT transfers aren’t free and not very cost transparent. You should’ve transferred via SIC, would have been free, we discuss this in another thread


#11

What is SIC? In PostFinance website I only have option for domestic and foreign transaction. When I put the IBAN in domestic transfer it said it doesn’t recognise it. So I went with the foreign transfer.

BTW, I managed to exchange CHF to USD and buy VT, all using WebTrader. I first had to go to account management and update my permissions. I had to call IB and, damn, these American consultants are so unfriendly. Somehow my account had no permissions for “currency conversions”, but it subscribed me for “penny stocks” and “algorithmic execution venue”. Any idea what that is? I told the guy on the phone that I didn’t subscribe to these and he said “I really doubt that”. Seriously?

Anyway, I had to update my trading experience. Only when I put 4 years experience and 100 trades, did it let me through. This requirement is really weird.


#12

Six Interbank Clearing, the national swiss gross-settlement bank clearing system. Wire transfers between swiss banks go through it. Citibank London is actually also connected to it, so you could have done the transfer completely as a domestic transfer. PostFinance ripped you off

As I said, we discussed this before - https://forum.mustachianpost.com/t/transferwises-borderless-account/


CornerTrader Questions
#13

I read the thread you linked. Man, you’re some kind of banking guru, where do you learn this stuff? A Swiss IBAN for a UK account - cool. Too bad IB did not provide me with this IBAN when I wanted to transfer my money :angry: . I put the currency and everything and I still got the GB… IBAN. I will look around the page for the Swiss IBAN you provided. Anyway, 10 CHF for transferring 50’000 is not really a lot. But of course it will be cool if I don’t have to pay it.


#14

They actually have now published the CH IBAN - look in the beta version of account management UI, big green button “AM Beta” at the bottom of the screen


#15

Alright, I’ll check it out for the next transfer. Thanks!

So the simple instruction for dummies of your first purchase at IB would be:

  1. Transfer 10’000 CHF to IB using the CH IBAN (not GB)
  2. Login to WebTrader, check that you have 10’000 CHF
  3. Click on the Forex tab, enter CHF, look for the CHF.USD
  4. Enter the amount 10’000 and choose the type SELL
  5. You should now have 0 CHF and everything converted to USD
  6. Go to Stocks tab and type in VT, select the type BUY

What I’m not so aware of: how safe it is to execute stock trades and currency conversions at market price (MKT)? Using the limit (LMT) can be confusing, especially if you sell a Forex pair. So should I manually put the ASK price for a BUY (and BID for a SELL) as limit, or is this exactly what MKT does?

By the way, they told me on the phone that IB UK is actually located in Switzerland (hence the +41 phone number). Funny huh?


How to Send Money to Your Interactive Broker's account for free
#16

I tried the IB Algo thing on my last trade and it worked quite well, I set it to normal and my market order took about an hour. It seems to be kind of a hybrid of market and limit order.


#17

Since the beginning my account management opens in the beta version. Actually I no longer see the option to switch back to the old version. And I tried just now to create a new funding notice and the IBAN that they provide is still the GB IBAN. What am I doing wrong?

Second question: When I opened my account, I didn’t get any PDF with my contract. I also don’t see an option to print one in the account management. When I opened the account, I had to put my name in a field as a form of signature, that’s it. What proof is there that I have an account with them? What’s the best way to gather some evidence? Collect monthly statements?

Third question: For 2FA I have so far opted for the printed card with codes. What is your experience and what do you recommend as a safe option?


#18

No idea, maybe you could ask support to clarify, but this is what i’m seeing: https://imgur.com/a/5fJ1T

Are you sure? I remember saving dozens of pdfs when I signed up

I think you should be able to find copies here:
https://www.interactivebrokers.com/en/index.php?f=1552

In Account Management > Manage Account > Account Information > Details you can download a copy of your application, that plus the general terms constitute your contract

Yes keep a copy of everything you have from them, especially trade confirmations. You can configure in account management to have them automatically email them to you at the end of each day when you do a trade

I’m using their IB Key app on a permanently-offline android phone, together with all other 2FA authenticator apps and keepass database for the more sensitve passwords. Works like a charm. You can find very decent devices on second hand market for very modest prices these days, like 30-50 Fr. Heck, you can even get two for redundancy. Flash LineageOS (former CyanogenMod) and you’ll have latest android and device would be working even better than new, just beware of which exact models LineageOS supports and possible quirks with some (e.g. encryption is broken on some devices)


Stash stuck at 70% of FIRE
#19

Sorry, I got it all confused. I thought I was in the new AM, but I was in the old one. Just the AM beta button was gone. I somehow managed to switch to the beta AM and then I saw the CH IBAN to transfer funds. Everything is fine. Just when I switch back to classic AM, I have no link to switch to beta, weird…

Regarding the PDFs, I really don’t remember having any PDFs to download. They could have emailed them to me, they didn’t. I just think it should be at least possible to download a copy of the contract. I don’t know. It feels weird to have everything done electronically and no trace of what I signed… But I guess it should not be a problem? They should be able to send me a copy of the contract…

Regarding 2FA. it’s interesting that the IB Key app works offline. Does it have all the codes saved? Does it not need to get updated sometimes? An offline android phone is not really much different from a piece of paper with the codes on it, is it? (in terms of convenience and security).

I also use a password manager, lastpass. However, IB replaces the password with a series of x’es “xxxxxxxx”. It looks like they are discouraging you from using a password manager.

Is keepass better than lastpass? I know it’s open source and your passwords are not on some server. But the convenience is really bad. You rely on a file that you have to keep offline. And if you put it on dropbox or similar, then it’s not much different from lastpass, is it?


#20

It’s not just a list of codes and not a time-based OTP token like google authenticator, but a challenge-response calculator much like for example the login thingy from postfinance but in the form of an app. Login form gives you a challenge number, you type it and a pin code into the app, it combines them with internal state to generate response. It works offline, though for some reason for initial setup it requires (a totally uncecessary) one time internet access.

I really don’t who know in their sane mind would use a product like lastpass for anything remotely sensitive like banking passwords, or bitcoin wallet keys. Open source and your passwords not being stored on someone else’s server are not just nice-to-haves, but minimum essential security requirements to me

That’s still more secure than lastpass. With lastpass you have another attack vector - the vendor itself being malicious: like pushing an update that intentionally weakens the security to let them steal your passwords. They only need to leak, like what, 32 bytes, size of your AES key? With source being closed you have no way to verify this isn’t even happening now. People can be bought, servers can be hacked, ccleaner incident is a very recent and very real example of attacks through a vendor, can happen to anyone

Lastpass is of course a step better than reusing the same password everywhere (=revealing it to every site you use it at), but not really the last password manager you’d need