Mypersonalfinance.ch

It’s been mentioned a few times in recent weeks, but I just binge-read mypersonalfinance.ch (currently 38 posts) and the writing quality is really fantastic. As is often the case with these types of blogs there likely isn’t anything fundamentally new for the majority of us on this forum, but nevertheless a few standout articles are:

  • A step-by-step tax declaration guide in English for canton Zurich, which I hadn’t been able to find before

  • A great illustration on the impact that seemingly small changes in TER can have, including a really cool cost comparison demonstrating the difference between US- and Irish-domiciled funds (conclusion: “The effect of not optimizing your dividend taxes through a US domiciled fund is equivalent to holding an ETF with a TER that is ~30bps higher.”)

  • A nice table that shows estimated average and marginal income tax rates in Switzerland for different income levels

After reading his blog, there are however two claims that I would like to double-check with the members of this forum. First…

Some brokers (e.g. Interactive Brokers) allow to submit a mid-price order. These enhanced algorithms allow you to split the difference between bid and ask with another market participant who’s also submitting a mid-price order in the opposite direction. Always go for such options if available. [Link]

Can anyone explain the “mid-price” order type in more detail (i.e., for someone who’s only familiar with “limit” and “market”)? Do you agree that we should “always go for such options”?

And second…

Update Oct’20: it seems like there’s an implicit fee (worse than actual exchange rate) when using IB’s “easy currency converter” on their mobile app. Or at least so I have observed at times. To avoid paying additional fees, I recommend to always buy currencies via buying / selling forex products. [Link]

Does anyone have evidence that using IB’s “Convert Currency” tool on their phone app is more expensive than the more traditional USD.CHF buy order process? Perhaps this is common knowledge and I just missed it somehow, but at the moment I’m skeptical.

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It’s simply a limit order in the middle, I think with IB you can let them manage it (it will update the bid until it gets filled). There isn’t anything magical, and it’s likely a fairly small win in the grand scheme of things (small price improvement, plus often there’s a fee rebase for adding liquidity from the exchange).

I usually do those, but manually (tho with popular ETFs when the spread is 1 cents, it doesn’t matter, there’s no middle).

IB will do a market order inside bid / ask spread.

I did yesterday. Was also not 100% sure what would happen as you have no control over the limits, so i looked at the spread and then converted. At the end my price was somewhere in between…so no extra costs.

Seems like a cool blog. I was looking for a new Swiss personal finance blog to follow since Mr. RIP seems to have abandoned that aspect on his blog.

By definition it’s not a market order, right? Market order would remove liquidity and always cross the spread (so can’t be between the spread): https://en.wikipedia.org/wiki/Order_(exchange)#:~:text=A%20market%20order%20is%20a,simplest%20of%20the%20order%20types.

That is not what i meant. Maybe this might be clearer:

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