Professional trader status on IB

I have just opened a new account with IB and it seems that I can only trade US ETFs if I upgrade my status to “professional trader”. The conditions for the upgrade are quite tough but supposing that I can work around them and qualify, my question would be: how would my income be taxed after that?
Will I be taxed my the Swiss gov. as an professional trader?

If the question to the above question is yes then I’ll just use my new IB account to convert CHF to USD bcz their rate is awesome and feed my swissquote account.

Cheers,
Cristian

I would guess that the tax treatment and IB status are not linked. Regardless, are you sure that IB is blocking it for you? I don’t have the professional status and I can trade US ETFs, as many others on this forum. Maybe you need to add some “trading experience”? Or just wait a few days if you just opened the account.

I’m an “Accredited Investor” on IB (Account Settings/Investor Category), and it means nothing for Swiss tax declaration.

First, and obvious question: Are you residing in Switzerland?

Most of them have had the account for a while though, not newly opened up.

It can be a Catch22 at times:

  • You aren’t allowed to trade in certain products - that’s why you can’t get “experience” in doing so.
  • By not having previous experience, you aren’t allowed to trade them.

That’s why and what I keep “lying” about to my brokers.
(the only thing at that, I’m otherwise very truthful).

Yes indeed, that’s what I meant by “adding” experience.

Thank you guys for your feedback.
There was a question if I reside in Swiss. The answer is: yes I am for the past 6y but I’m an expat.
I will definitely try to add some experience although I’ve already mentioned that I’ve got 3y of experience trading stock.

I will update this post with the outcome.

I cannot find this under the Account Settings… there’s only the MiFID Client Category

Experience is not enough, you need to select also minimum “Good Knowledge” under the knowledge drop-down list too

I have heard that one good tip is buying two or three times some VT, VTI, VXUS selling put options.

After those operations you explain that you have a good knowledge because you are bypassing the MiFID regulations with the options.

They just understand you are good and give you the new status :wink: If they don’t, just sell options of Vanguard products.

Regards.

Thanks for the screenshot, but looks like I have a different setup than yours:


Could this be because I have a different Investment Objectives set? Had to change to “Active Trading and Spec” in order to be able to trade micro futures on CME, but this is silly in my view because my reason to trade these futures is actually to hedge my portfolio and not to spec…
image

The other settings are like in your screenshot and this is the only difference I noticed that could explain it (well, except net worth, which is much lower in my case :sweat_smile:)…

uh, that’s weird… I don’t know how to help then :expressionless:

I also don’t have it, but apparently you can activate it:
https://www.interactivebrokers.com/en/software/am3/am/settings/investorcategory.htm

Some quick update from my side…

It seems that I’ve been put in the Retail Category and that’s why I cannot trade US ETFs (VT for example). To change this I need to follow these instructions:
“Interactive Brokers currently treats you as a Retail Client entitled to the highest level of regulatory protection. If you believe that you qualify to be treated as a Professional Client, you can request that we treat you as a Professional Client. Professional Clients have fewer regulatory protections than Retail Clients but may be eligible to trade additional investment products that Retail Clients cannot trade (or to trade certain products with fewer protective restrictions than Retail Clients). If IB accepts your request, you will be categorised as a Professional Client generally and not for specific products.”

The problem is that no matter what Experience you fill in when you requesting those additional permissions will upgrade your status to “professional trader”. To get the upgrade I need to go through the “Request to change your MiFID Category” which is just a pain in the a**. I’d need to provide them with payslips proving that I worked as a professional trader and provide them a trade history from other brokerage account (if any). I haven’t got any of those…

Seems for Swiss customers the IB access to VT instrument is closed now…at least on the new accounts

Isn’t MiFID only for european customers?

My account also shows the same thing under MiFID, it doesn’t prevent me from buying US ETFs. If you just updated the “experience” and put at least “good knowledge”, it can still take a few days before it becomes effective. Or maybe they really blocked it for new customers :thinking:

Cris, is not your nationality, is where do you live officially.

I’m European and when I opened the account they told me that even if I’m European, they’ll apply the rules for Switzerland since I gave to them an address in Switzerland.

Regards.

Hi Tino,

Thanks for your feedback. I’m gonna tell them what you just told me and see what happens. I’ve also increased my experience to all instruments yesterday, today the changes were approved but was not able to buy anything from Vanguard.

I’ll provide feedback as soon as they get back to me.

Cheers,
C.

Yes but he stated he lives in Switzerland, then it has to be something else, maybe it’s related to new customers as others suggested?

I’m also classified as retail but so far I’m still able to trade US Etfs (say: adding quantities to already purchased ones… Don’t know if it works the same with new products…:thinking:)

I understood he was Swiss but an expat somewhere… I’m getting lost…

Mmm… And other products? If you try an individual stock that works?
Could you send us a screenshot of what is saying to you when you try to buy it? It says that you haven’t the right to by VT or VTI, for example?

Is a bit strange they changed the rules for buying USA ETF’s just now…

Regards.

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