Interactive Brokers (Best Kept Secret)

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Startled Cat
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Re: Interactive Brokers (Best Kept Secret)

Post by Startled Cat »

tj wrote: Mon Feb 14, 2022 4:10 pm My 1099 did not include the free unvested stock of IKBR. Presumably the value of the shares will be on my 2022 1099. And I suspect the cost basis value will be the value on date of vesting?
That was my experience. They sold down the position to the nearest whole number of shares at vesting time, and reported the value of those shares.
calwatch
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Re: Interactive Brokers (Best Kept Secret)

Post by calwatch »

Interestingly if you gave out referrals for IBKR, the value was not reported on a 1099, even if it exceeded the normal $600 minimum for a 1099-MISC. Of course, I will report it, and probably as self employment income because I need the Social Security credits and contribution to my solo 401(k).
Can you please let me know what are the credit card perks benefits if you have a BoA or Merrill investment account, and in which way is TD Ameritrade software better than IB?
While the Merrill question has been answered, TD's Think or Swim has a lot of power features which are easier to use than IBKR's TWS. The TD Ameritrade web interface is pretty basic but is better designed than IBKR's Portal trader. On the other hand, I like how IBKR handles watch lists on their mobile app and just keep a relatively small amount in IBKR Lite so I can keep using it. The main reason I use Ameritrade, other than the fact they gave me a bonus when transferring funds, is that there is little risk of auto liquidation for the box spreads that I have. Another plus, which may not apply every year, was that my 1099 was ready on Ameritrade February 1. The other brokerages (Merrill, IBKR, and the ones which are cleared by Apex Trading) didn't upload until this weekend. I like to input in all my income as early as possible to get a handle on the maximum I will pay, before searching for deductions to lower the cost.
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

Interestingly if you gave out referrals for IBKR, the value was not reported on a 1099, even if it exceeded the normal $600 minimum for a 1099-MISC. Of course, I will report it, and probably as self employment income because I need the Social Security credits and contribution to my solo 401(k).
How many referrals did you get? :shock:
muffins14
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Re: Interactive Brokers (Best Kept Secret)

Post by muffins14 »

It seems like I am making pretty decent money from the stock yield enhancement -- this seems like a nice feature. $80 so far in February
Crom laughs at your Four Winds
sharukh
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Re: Interactive Brokers (Best Kept Secret)

Post by sharukh »

muffins14 wrote: Thu Feb 17, 2022 3:49 pm It seems like I am making pretty decent money from the stock yield enhancement -- this seems like a nice feature. $80 so far in February
Watch out for divided in lieu, making the divided not qualified for lower tax treatment
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

sharukh wrote: Thu Feb 17, 2022 4:30 pm
muffins14 wrote: Thu Feb 17, 2022 3:49 pm It seems like I am making pretty decent money from the stock yield enhancement -- this seems like a nice feature. $80 so far in February
Watch out for divided in lieu, making the divided not qualified for lower tax treatment
For 2021, I got $10 of interest and $5 of in-lieu dividend. How much do ya'll have invested? :mrgreen:
muffins14
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Re: Interactive Brokers (Best Kept Secret)

Post by muffins14 »

sharukh wrote: Thu Feb 17, 2022 4:30 pm
muffins14 wrote: Thu Feb 17, 2022 3:49 pm It seems like I am making pretty decent money from the stock yield enhancement -- this seems like a nice feature. $80 so far in February
Watch out for divided in lieu, making the divided not qualified for lower tax treatment
Hm I definitely did not think of this
Crom laughs at your Four Winds
sharukh
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Re: Interactive Brokers (Best Kept Secret)

Post by sharukh »

tj wrote: Thu Feb 17, 2022 5:28 pm
sharukh wrote: Thu Feb 17, 2022 4:30 pm
muffins14 wrote: Thu Feb 17, 2022 3:49 pm It seems like I am making pretty decent money from the stock yield enhancement -- this seems like a nice feature. $80 so far in February
Watch out for divided in lieu, making the divided not qualified for lower tax treatment
For 2021, I got $10 of interest and $5 of in-lieu dividend. How much do ya'll have invested? :mrgreen:
I have to pay $150 extra in taxes due to divided in lieu.

So planning to move out of IB
Tanelorn
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Re: Interactive Brokers (Best Kept Secret)

Post by Tanelorn »

sharukh wrote: Thu Feb 17, 2022 10:52 pm Watch out for divided in lieu, making the divided not qualified for lower tax treatment...
This is indeed a risk for the stock lending program - shares that are lent out when a dividend is to be paid receive cash in lieu from the short seller (rather than the dividend payment directly from the company). Cash in lieu is treated as ordinary taxable income rather than (potentially) qualified dividends eligible for the lower long term gains tax rates.

Assuming you like the stock yield enhancement and you own stocks that pay qualified dividends that don’t want this problem, you should create a separate IB cash (not margin) account that is not enrolled in the yield enhancement lending program. Then move those dividend securities in that account. This will prevent them from being lent and guarantee you get the better tax treatment.

If you use margin to hold these stocks, you won’t be able do this and May well have to decide whether you’d rather risk losing the better tax treatment or holding fewer assets thereby reducing your upside potential.
sharukh wrote: Thu Feb 17, 2022 10:52 pm I have to pay $150 extra in taxes due to divided in lieu.

So planning to move out of IB
You could just unenroll from the stock loan program if it’s not worth it to you - this can and likely will happen at any broker where you use such a program. I still use IB but I remember getting 40% cash in lieu treatment on a very large dividend that would have otherwise gotten the better tax treatment. I want to say it was a 6 figure bill, but it was a long time ago.
saver007
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

In IBKR, it's unlikely dividend in liu was caused by stock yield enhancement program because they automatically recall stock loan around dividend payment date.. they promised to do it in the website and you can pretty much see it in the statement ...these are daily loans..
it's more likely the dividend in liu is caused by any margin usage in the account. that is if you are borrowing money from broker, they can lend your stock to another party to finance margin loan. In this case, they don't recall stock loan around dividend date.
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

saver007 wrote: Fri Feb 18, 2022 6:16 am In IBKR, it's unlikely dividend in liu was caused by stock yield enhancement program because they automatically recall stock loan around dividend payment date.. they promised to do it in the website and you can pretty much see it in the statement ...these are daily loans..
it's more likely the dividend in liu is caused by any margin usage in the account. that is if you are borrowing money from broker, they can lend your stock to another party to finance margin loan. In this case, they don't recall stock loan around dividend date.
I don't use margin, I still had $5 of in lieu.
AlohaJoe
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Re: Interactive Brokers (Best Kept Secret)

Post by AlohaJoe »

bling wrote: Fri Feb 11, 2022 9:50 am IMO, the only reason to use IBKR over other brokers is for margin, which automatically means pro.
I live in Vietnam. Can you point me to a better broker than IBKR that serves Vietnam? Fidelity, Schwab, and Merrill Edge do not.
saver007
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

tj wrote: Fri Feb 18, 2022 8:42 am
saver007 wrote: Fri Feb 18, 2022 6:16 am In IBKR, it's unlikely dividend in liu was caused by stock yield enhancement program because they automatically recall stock loan around dividend payment date.. they promised to do it in the website and you can pretty much see it in the statement ...these are daily loans..
it's more likely the dividend in liu is caused by any margin usage in the account. that is if you are borrowing money from broker, they can lend your stock to another party to finance margin loan. In this case, they don't recall stock loan around dividend date.
I don't use margin, I still had $5 of in lieu.
do you hold any other currency balances other than your main currency? This can create margin loan... other ways I guess can make implicit margin loans...like you may be buying stock with cash pending settlement...

Anyhow you should be able to trace in the statement if the stock was lend out on the dividend ex date under the fully paid lending program to confirm..
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

saver007 wrote: Fri Feb 18, 2022 9:05 am
tj wrote: Fri Feb 18, 2022 8:42 am
saver007 wrote: Fri Feb 18, 2022 6:16 am In IBKR, it's unlikely dividend in liu was caused by stock yield enhancement program because they automatically recall stock loan around dividend payment date.. they promised to do it in the website and you can pretty much see it in the statement ...these are daily loans..
it's more likely the dividend in liu is caused by any margin usage in the account. that is if you are borrowing money from broker, they can lend your stock to another party to finance margin loan. In this case, they don't recall stock loan around dividend date.
I don't use margin, I still had $5 of in lieu.
do you hold any other currency balances other than your main currency? This can create margin loan... other ways I guess can make implicit margin loans...like you may be buying stock with cash pending settlement...

Anyhow you should be able to trace in the statement if the stock was lend out on the dividend ex date under the fully paid lending program to confirm..
No I don't have any currencies other than USD. It might be dividends from my IBKR stock that is not yet vested? IDK.
saver007
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

bling wrote: Fri Feb 11, 2022 9:50 am IMO, the only reason to use IBKR over other brokers is for margin, which automatically means pro.
Not just for the best margin rates, there are a lot of reasons to use IBKR.

-IB pays out interest on positive cash balance . After fed funds hikes to 50 basis point, any further hike is passed to clients starting next day... Similar arrangements on 20 other currencies IB support.

- Extra income/yield via fully paid stock lending program. It is almost like getting perpetual signups rewards/bonus..

- Access to international markets and banking system.. I especially like the ability to send wires to any foreign bank account participating in SWIFT for free , at least one free wire per month.

- Execution quality is pretty good.. IB platform is built for traders and institutions ... Execution quality is paramount for this group.

- Broker safety.. IB has 10 billion equity capital for relatively small AUM business... Basically IB clients would be safe even if IB sustain a 20% loss on it's margin loans (it's most risky asset)... I don't think Schwab or even Chase has enough capital to sustain a 20% drawdown on it's risky assets.. IB is conservatively managed by it's founder who has been in the securities business since 1970s... He doesn't allow client cash to be deposited in anything other than short term Treasury bills... He is allowed to invest it in long term Treasury bonds or agency mortgage backed securities to get earn extra yield but intentionally restrain from doing so.

- IB has pretty good Mobile App GUI .. I have accounts with Schwab and Fidelity .. personally I like the IBKR app the best... This is bit of subjective matter... Whichever GUI , you are used to it, you will like

- As mentioned above, IB pays its own stock up to 1k as signup bonus..
bling
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Re: Interactive Brokers (Best Kept Secret)

Post by bling »

saver007 wrote: Fri Feb 18, 2022 8:55 pm
bling wrote: Fri Feb 11, 2022 9:50 am IMO, the only reason to use IBKR over other brokers is for margin, which automatically means pro.
Not just for the best margin rates, there are a lot of reasons to use IBKR.

-IB pays out interest on positive cash balance . After fed funds hikes to 50 basis point, any further hike is passed to clients starting next day... Similar arrangements on 20 other currencies IB support.

- Extra income/yield via fully paid stock lending program. It is almost like getting perpetual signups rewards/bonus..

- Access to international markets and banking system.. I especially like the ability to send wires to any foreign bank account participating in SWIFT for free , at least one free wire per month.

- Execution quality is pretty good.. IB platform is built for traders and institutions ... Execution quality is paramount for this group.

- Broker safety.. IB has 10 billion equity capital for relatively small AUM business... Basically IB clients would be safe even if IB sustain a 20% loss on it's margin loans (it's most risky asset)... I don't think Schwab or even Chase has enough capital to sustain a 20% drawdown on it's risky assets.. IB is conservatively managed by it's founder who has been in the securities business since 1970s... He doesn't allow client cash to be deposited in anything other than short term Treasury bills... He is allowed to invest it in long term Treasury bonds or agency mortgage backed securities to get earn extra yield but intentionally restrain from doing so.

- IB has pretty good Mobile App GUI .. I have accounts with Schwab and Fidelity .. personally I like the IBKR app the best... This is bit of subjective matter... Whichever GUI , you are used to it, you will like

- As mentioned above, IB pays its own stock up to 1k as signup bonus..
most of these reasons have limited utility though.

1) interest rates on cash balances are currently 0.08% according to their website for USD. if you have less than 100k, it's proportional as well. as someone who holds next to zero cash, this has zero value for me. and if i did hold cash, i'd rather hold in a savings account for FDIC insurance and a better interest rate. CD ladders are also viable.

2) i'm signed up for the stock lending program. i don't trade often, maybe once/twice a month, and it can't even break even with the trading fees. maybe the rate is a lot better if you're not trading exclusively index funds.

3) access to international banks. if this is something you need to do regularly, wouldn't something like wise (formerly transferwise) be better? you get a debit card and multiple local currency bank accounts and you can switch between them all on the fly.

4) execution quality. everyone says this, and it's probably true. but unless you're an active trader, it doesn't matter. it's like people arguing about the spread for ETFs vs mutual funds....it doesn't matter for index investors.

5) other brokers don't need this because they actually issue margin calls. IBKR will just liquidate everything with no warning. a lot less risk for the broker, a lot more risk for you, the investor.

6) yes, mobile app is pretty good.
rchmx1
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Re: Interactive Brokers (Best Kept Secret)

Post by rchmx1 »

Wise is significantly more expensive than IBKR. Even with transferring sums as small as ~$1k/month to Mexico, I save a couple hundred bucks a year in fees. If you're not an expat, I'm not sure why this would matter much, but for expats, IBKR's currency conversion service makes it a no brainer brokerage of choice.
saver007
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

5) other brokers don't need this because they actually issue margin calls. IBKR will just liquidate everything with no warning. a lot less risk for the broker, a lot more risk for you, the investor.
Overall safety of the broker/bank depends on how conservatively they invest customer cash.. Net interest margin (NIM).. spread between the yield they earn from investing customer money reduced by the interest they pay out for client deposit if any. NIM is their bread and butter revenue.. they can boost NIM by investing customer money in riskier assets - to the extent regulations/capital requirement allows.

IBKR is much more conservative in investing customer money than regulations allow them to be.. IBKR chairman has stated he is afraid of investing client money even in long term US treasury bonds because in a rapidly rate rising environment, even US Treasury investment can create liquidity crunch as these long dated Treasuries market value will plummet. I don't think IB competition (brokers or banks) is this conservative, they invest client funds not just in long dated Treasuries but also in riskier mortgage backed securities and asset backed securities that are unlikely to be liquid in a financial crisis.

IBKR lending client money to it's margin borrowing clients is probably is most riskiest thing it does with client funds but they have good controls to minimize loss ( instant liquidation of loan if minimum margin requirements breached) . I would rather see this policy as a good thing to protect the firm/capital and by extension it's clients.. In comparison banks are lending client deposits with illiquid collateral or even without any collateral (credit card or unsecured bank loans) to boost their NIM and even when a loan covenant is breached it would take them months or years to recover loans .

Anyhow, this type of paranoia is warranted in once in every 20-30 years financial crisis and even when it happens FDIC/SIPC may protect most retail client deposit base. Nevertheless, it's good to look under the hood of financial institutions and see how risky their balance sheet is...
bling
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Re: Interactive Brokers (Best Kept Secret)

Post by bling »

FYI, for those looking to take advantage of currency exchange rates, it appears that you can't do this if you have a margin balance. you can only convert currency with positive balances.
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

IBKR stock is down 6% today, what's up with that? My free shares still don't vest for a little while longer.
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

Nobody has any opinion on what is going at IBKR? My shares have vested but it would seem to be selling low if I unloaded them.
muffins14
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Re: Interactive Brokers (Best Kept Secret)

Post by muffins14 »

tj wrote: Mon Mar 07, 2022 1:27 pm Nobody has any opinion on what is going at IBKR? My shares have vested but it would seem to be selling low if I unloaded them.
Who knows. Overall market is down 3% so not surprised some stocks are down 6%. Especially stocks that largely depend on finance and trading for profit
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tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

muffins14 wrote: Mon Mar 07, 2022 2:11 pm
tj wrote: Mon Mar 07, 2022 1:27 pm Nobody has any opinion on what is going at IBKR? My shares have vested but it would seem to be selling low if I unloaded them.
Who knows. Overall market is down 3% so not surprised some stocks are down 6%. Especially stocks that largely depend on finance and trading for profit

The 6% was from one random day last week. It's down over 20% since my shares were issued. I don't need the $ so I guess I'll let it ride. 🤷🏻‍♂️ It looks like my cost basis is the value from day of vesting .
muffins14
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Re: Interactive Brokers (Best Kept Secret)

Post by muffins14 »

Again most stocks are down 15-20% in the last month or so, so I don’t sense anything uniquely wrong here, but hopefully you don’t have like 100k invested in IBKR stock for some reason
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parval
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Re: Interactive Brokers (Best Kept Secret)

Post by parval »

Anyone get notifications about change of margin rates?

Robinhood mentioned the bump a while back (will go from 2.5% to 3% on 2022/03/23), surprised no word from IBKR.
dafioram
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Re: Interactive Brokers (Best Kept Secret)

Post by dafioram »

M1 says their rates are going up on 3/21 (by 0.25%).

IBKR shows benchmark rate still at 0.08% as of 3/16. https://www.interactivebrokers.com/en/t ... hmarks.php
Ufken1
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Re: Interactive Brokers (Best Kept Secret)-- Money Market Options?

Post by Ufken1 »

I'm a relatively new IBRK client and am attempting to find good yield options for my free cash in the account. I have roughly $90k in cash now and expect it will be remain uninvested for a month or two. Does anyone have any suggestions for enhancing yield on cash at IBRK? Or suggestion on a money market mutual fund to consider for yield? I've screened for money market funds, and IBRK does not seem to have an easy way to find info other than the funds that are available on the platform, filtered by load, minimums, etc. Thanks in advance!
muffins14
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Re: Interactive Brokers (Best Kept Secret)-- Money Market Options?

Post by muffins14 »

Ufken1 wrote: Fri Mar 25, 2022 2:18 pm I'm a relatively new IBRK client and am attempting to find good yield options for my free cash in the account. I have roughly $90k in cash now and expect it will be remain uninvested for a month or two. Does anyone have any suggestions for enhancing yield on cash at IBRK? Or suggestion on a money market mutual fund to consider for yield? I've screened for money market funds, and IBRK does not seem to have an easy way to find info other than the funds that are available on the platform, filtered by load, minimums, etc. Thanks in advance!
Does it really matter if it's only for 4-8 weeks? The best you can do with small risk is probably some treasury or muni ETF at 0.8-1.5% yield, which gets you like $75-$150 for the risk of losing principal
Crom laughs at your Four Winds
Ufken1
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Re: Interactive Brokers (Best Kept Secret)-- Money Market Options?

Post by Ufken1 »

muffins14 wrote: Fri Mar 25, 2022 3:16 pm
Ufken1 wrote: Fri Mar 25, 2022 2:18 pm I'm a relatively new IBRK client and am attempting to find good yield options for my free cash in the account. I have roughly $90k in cash now and expect it will be remain uninvested for a month or two. Does anyone have any suggestions for enhancing yield on cash at IBRK? Or suggestion on a money market mutual fund to consider for yield? I've screened for money market funds, and IBRK does not seem to have an easy way to find info other than the funds that are available on the platform, filtered by load, minimums, etc. Thanks in advance!
Does it really matter if it's only for 4-8 weeks? The best you can do with small risk is probably some treasury or muni ETF at 0.8-1.5% yield, which gets you like $75-$150 for the risk of losing principal
Good point, although I may move additional funds into the account and the yields on MMFs are increasing daily. That "month or two" may become longer as well, depending...
saver007
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

Try short term bond ETF like SHV or ICSH. Sign up for stock yield enhancement program .. you may get lucky and these ETFs can be lent out for some extra yield.
Ufken1
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Re: Interactive Brokers (Best Kept Secret)

Post by Ufken1 »

Good idea regarding the ETFs. I've found a few money market mutual funds with decent yields, but all have a commission. Any others people use that are $0 commission with some yield, taxable or tax-free?
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

Ufken1 wrote: Sat Mar 26, 2022 1:47 pm Good idea regarding the ETFs. I've found a few money market mutual funds with decent yields, but all have a commission. Any others people use that are $0 commission with some yield, taxable or tax-free?
I didn't know that IBKR had commission free funds.
Ufken1
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Re: Interactive Brokers (Best Kept Secret)

Post by Ufken1 »

Yes, they claim to have 17,000 commission free fund options. https://www.interactivebrokers.com/en/p ... -funds.php

I just would like to find one that is a money market fund with a competitive yield (.35% SEC yield today is good), with relatively low minimum initial purchase ($25k). There are a few that are competitive and commission free, but have $500k or $1M minimums.
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whodidntante
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Re: Interactive Brokers (Best Kept Secret)

Post by whodidntante »

tj wrote: Mon Mar 07, 2022 2:47 pm
muffins14 wrote: Mon Mar 07, 2022 2:11 pm
tj wrote: Mon Mar 07, 2022 1:27 pm Nobody has any opinion on what is going at IBKR? My shares have vested but it would seem to be selling low if I unloaded them.
Who knows. Overall market is down 3% so not surprised some stocks are down 6%. Especially stocks that largely depend on finance and trading for profit

The 6% was from one random day last week. It's down over 20% since my shares were issued. I don't need the $ so I guess I'll let it ride. 🤷🏻‍♂️ It looks like my cost basis is the value from day of vesting .
When I did that promo, I shorted an equivalent number of shares at another broker. That way I didn't have to care what happened to the share price.
tj
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Re: Interactive Brokers (Best Kept Secret)

Post by tj »

whodidntante wrote: Sat Mar 26, 2022 2:12 pm
tj wrote: Mon Mar 07, 2022 2:47 pm
muffins14 wrote: Mon Mar 07, 2022 2:11 pm
tj wrote: Mon Mar 07, 2022 1:27 pm Nobody has any opinion on what is going at IBKR? My shares have vested but it would seem to be selling low if I unloaded them.
Who knows. Overall market is down 3% so not surprised some stocks are down 6%. Especially stocks that largely depend on finance and trading for profit

The 6% was from one random day last week. It's down over 20% since my shares were issued. I don't need the $ so I guess I'll let it ride. 🤷🏻‍♂️ It looks like my cost basis is the value from day of vesting .
When I did that promo, I shorted an equivalent number of shares at another broker. That way I didn't have to care what happened to the share price.
You should. Your taxable free stock value is based on what happened with the price on day of vesting.
saver007
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

Ufken1 wrote: Sat Mar 26, 2022 2:09 pm Yes, they claim to have 17,000 commission free fund options. https://www.interactivebrokers.com/en/p ... -funds.php

I just would like to find one that is a money market fund with a competitive yield (.35% SEC yield today is good), with relatively low minimum initial purchase ($25k). There are a few that are competitive and commission free, but have $500k or $1M minimums.
I doubt you are going to find a mutual fund like that currently.

SHV is your best alternative.
Arguably SHV is safer than money market funds... It only invest on US Treasury bills with less than 1 year duration. Money market funds can invest in riskier assets.
You can buy SHV commission free under IBKR lite .
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Rainier
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Re: Interactive Brokers (Best Kept Secret)

Post by Rainier »

Anybody using IBRK as a one-stop shop (ie, Fidelity replacement)? I like the idea of having access to cheap margin, even though I probably would never use it.

Also, if I do security lending do I have to do it for everything in that account or can I pick the securities? For example, can I lend out my Berkshire shares but not my SPY shares?

What are the best new account sign up bonuses right now?
klaus14
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Re: Interactive Brokers (Best Kept Secret)

Post by klaus14 »

Rainier wrote: Thu Apr 21, 2022 1:02 pm Anybody using IBRK as a one-stop shop (ie, Fidelity replacement)? I like the idea of having access to cheap margin, even though I probably would never use it.

Also, if I do security lending do I have to do it for everything in that account or can I pick the securities? For example, can I lend out my Berkshire shares but not my SPY shares?

What are the best new account sign up bonuses right now?
i do. only hassle is that you need to approve any transfers (like credit card payments) out of your account from the app within a day. they send you sms for it.

no you cant choose.

if you dont have a ibkr account yet use the promo link that gives you lower margin rate.
My investment algorithm: https://www.bogleheads.org/forum/viewtopic.php?f=10&t=351899&p=6112869#p6112869
Marseille07
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Re: Interactive Brokers (Best Kept Secret)

Post by Marseille07 »

klaus14 wrote: Thu Apr 21, 2022 1:58 pm i do. only hassle is that you need to approve any transfers (like credit card payments) out of your account from the app within a day. they send you sms for it.

no you cant choose.

if you dont have a ibkr account yet use the promo link that gives you lower margin rate.
I don't know their thresholds, but my recent ACH credit / debit went through without them sending SMS. The transactions were under $1000 though.
EddyB
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Joined: Fri May 24, 2013 3:43 pm

Re: Interactive Brokers (Best Kept Secret)

Post by EddyB »

sharukh wrote: Thu Feb 17, 2022 10:52 pm
tj wrote: Thu Feb 17, 2022 5:28 pm
sharukh wrote: Thu Feb 17, 2022 4:30 pm
muffins14 wrote: Thu Feb 17, 2022 3:49 pm It seems like I am making pretty decent money from the stock yield enhancement -- this seems like a nice feature. $80 so far in February
Watch out for divided in lieu, making the divided not qualified for lower tax treatment
For 2021, I got $10 of interest and $5 of in-lieu dividend. How much do ya'll have invested? :mrgreen:
I have to pay $150 extra in taxes due to divided in lieu.

So planning to move out of IB
It’s all situational; for me, I’m getting dividend-in-lieu from the Irish branch of IBKR, letting me use more of my otherwise excess foreign tax credits.
Tanelorn
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Re: Interactive Brokers (Best Kept Secret)

Post by Tanelorn »

Rainier wrote: Thu Apr 21, 2022 1:02 pm Also, if I do security lending do I have to do it for everything in that account or can I pick the securities? For example, can I lend out my Berkshire shares but not my SPY shares?

What are the best new account sign up bonuses right now?
It’s all or nothing if you sign up for lending. If you care that much, have a second account that doesn’t enroll in lending and hold those securities there you don’t want lent.

I think they’re offering a $200 promo for the referrer and 1% in IBKR stock for the money the new customer deposits and keeps 1 year, up to $1k worth on $100k max.

https://www.interactivebrokers.com/en/index.php?f=45764
comeinvest
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Re: Interactive Brokers (Best Kept Secret)

Post by comeinvest »

Marseille07 wrote: Thu Apr 21, 2022 1:59 pm
klaus14 wrote: Thu Apr 21, 2022 1:58 pm i do. only hassle is that you need to approve any transfers (like credit card payments) out of your account from the app within a day. they send you sms for it.

no you cant choose.

if you dont have a ibkr account yet use the promo link that gives you lower margin rate.
I don't know their thresholds, but my recent ACH credit / debit went through without them sending SMS. The transactions were under $1000 though.
Having outgoing debits potentially denied when I don't monitor my email or phone for alerts for a day, is a dealbreaker for me to use them as a one stop shop. Think of being on a plane or on vacation and your credit card scheduled auto payment doesn't get paid; you will incur juicy fees and interest, not to mention the hassle.
Also: viewtopic.php?p=5481349&hilit=check+writing#p5481349
Marseille07
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Re: Interactive Brokers (Best Kept Secret)

Post by Marseille07 »

So I have $300 cash in IBKR and also some VOO position. I just hit the ATM nearby and saw my "ledger balance" over 10K.

Can I withdraw 10K from the ATM? If I do, am I taking out a margin loan and have to pay interest? Not that I needed cash today but just curious how this all works, as I wasn't expecting the ATM to show 10K+.
calwatch
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Re: Interactive Brokers (Best Kept Secret)

Post by calwatch »

Marseille07 wrote: Sat Apr 23, 2022 3:46 pm So I have $300 cash in IBKR and also some VOO position. I just hit the ATM nearby and saw my "ledger balance" over 10K.

Can I withdraw 10K from the ATM? If I do, am I taking out a margin loan and have to pay interest? Not that I needed cash today but just curious how this all works, as I wasn't expecting the ATM to show 10K+.
Yes, it's cash available but that includes a margin loan.
Marseille07
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Joined: Fri Nov 06, 2020 12:41 pm

Re: Interactive Brokers (Best Kept Secret)

Post by Marseille07 »

calwatch wrote: Sun Apr 24, 2022 1:39 am
Marseille07 wrote: Sat Apr 23, 2022 3:46 pm So I have $300 cash in IBKR and also some VOO position. I just hit the ATM nearby and saw my "ledger balance" over 10K.

Can I withdraw 10K from the ATM? If I do, am I taking out a margin loan and have to pay interest? Not that I needed cash today but just curious how this all works, as I wasn't expecting the ATM to show 10K+.
Yes, it's cash available but that includes a margin loan.
Thank you. If I withdraw $200, hopefully they would deduct out of my cash balance without taking out a loan. I think that's what happens, just haven't tried it yet.
Marseille07
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Re: Interactive Brokers (Best Kept Secret)

Post by Marseille07 »

calwatch wrote: Sun Apr 24, 2022 1:39 am
Marseille07 wrote: Sat Apr 23, 2022 3:46 pm So I have $300 cash in IBKR and also some VOO position. I just hit the ATM nearby and saw my "ledger balance" over 10K.

Can I withdraw 10K from the ATM? If I do, am I taking out a margin loan and have to pay interest? Not that I needed cash today but just curious how this all works, as I wasn't expecting the ATM to show 10K+.
Yes, it's cash available but that includes a margin loan.
I withdrew $100 at the ATM near my place today. IBKR took a 50c fee (doesn't even show up online) and the ATM took additional $3.25.

The transaction is pending right now, hopefully they'll take it out of my cash balance (as they should). I don't withdraw often so this is not a huge issue, but it is not the most convenient either.
Marseille07
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Re: Interactive Brokers (Best Kept Secret)

Post by Marseille07 »

Marseille07 wrote: Wed May 04, 2022 9:24 pm
calwatch wrote: Sun Apr 24, 2022 1:39 am
Marseille07 wrote: Sat Apr 23, 2022 3:46 pm So I have $300 cash in IBKR and also some VOO position. I just hit the ATM nearby and saw my "ledger balance" over 10K.

Can I withdraw 10K from the ATM? If I do, am I taking out a margin loan and have to pay interest? Not that I needed cash today but just curious how this all works, as I wasn't expecting the ATM to show 10K+.
Yes, it's cash available but that includes a margin loan.
I withdrew $100 at the ATM near my place today. IBKR took a 50c fee (doesn't even show up online) and the ATM took additional $3.25.

The transaction is pending right now, hopefully they'll take it out of my cash balance (as they should). I don't withdraw often so this is not a huge issue, but it is not the most convenient either.
The money got debited out of my cash balance as it should.

A $100 withdrawal ended up costing $103.75 (50c IBKR fee and $3.25 ATM fee). This was a test, but I will withdraw a lot more next time :D
richard.h.gao
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Re: Interactive Brokers (Best Kept Secret)

Post by richard.h.gao »

muffins14 wrote: Wed Jan 26, 2022 12:52 pm It also feels like I have a lot of commissions in general... I'm using tiered pricing.

For example I submitted an order for like 800 shares of ITOT, and the total commission divided by the number of shares comes to 0.0067 per share, when I thought tiered pricing was 0.0035 per share.

Am I missing some way to actually reduce the commissions?
I ACH margin cash out from IBKR to another broker that offers commission free trades, then ACAT transfer those shares back into IBKR. Rinse and repeat. The best of both worlds.
muffins14
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Location: New York

Re: Interactive Brokers (Best Kept Secret)

Post by muffins14 »

richard.h.gao wrote: Fri May 06, 2022 3:45 am
muffins14 wrote: Wed Jan 26, 2022 12:52 pm It also feels like I have a lot of commissions in general... I'm using tiered pricing.

For example I submitted an order for like 800 shares of ITOT, and the total commission divided by the number of shares comes to 0.0067 per share, when I thought tiered pricing was 0.0035 per share.

Am I missing some way to actually reduce the commissions?
I ACH margin cash out from IBKR to another broker that offers commission free trades, then ACAT transfer those shares back into IBKR. Rinse and repeat. The best of both worlds.
How long does that round trip take? I have a margin requirement, so I would need to transfer a position out, tax-loss harvest it, then move it back, hopefully while some huge crash did not happen
Crom laughs at your Four Winds
Tanelorn
Posts: 2366
Joined: Thu May 01, 2014 9:35 pm

Re: Interactive Brokers (Best Kept Secret)

Post by Tanelorn »

richard.h.gao wrote: Fri May 06, 2022 3:45 am I ACH margin cash out from IBKR to another broker that offers commission free trades, then ACAT transfer those shares back into IBKR. Rinse and repeat. The best of both worlds.
I would definitely not recommend this. All it takes is one brokerage snafu, on the side of your other broker, in sending the tax basis information to IB, and you’ll have a tax mess on your hands that will waste way more time than whatever pennies you might have saved in commissions. If you really think free commissions are better for you, you can use IB Lite instead of IB Pro.

https://www.interactivebrokers.com/en/index.php?f=45500
muffins14 wrote: Wed Jan 26, 2022 12:52 pm It also feels like I have a lot of commissions in general... I'm using tiered pricing.

For example I submitted an order for like 800 shares of ITOT, and the total commission divided by the number of shares comes to 0.0067 per share, when I thought tiered pricing was 0.0035 per share.

Am I missing some way to actually reduce the commissions?
Sounds like you placed a market (or marketable limit) order. Note that with Tiered Pricing, you also pay exchange fees or receive exchange rebates based on how your order is filled. Roughly speaking, those vary from paying $0.0030/share for market orders to receiving $0.0020/share for posting limit orders that didn’t immediately fill when placed. 35 mils for Tiered + 30 mils for exchange fees on a market order plus another 2 mils for misc regularly fees like SEC/FINRA stuff gets you to right around the 67 mils / $0.0067 cost you saw.

You should check out the third party fee section here

https://www.interactivebrokers.com/en/i ... commission

And for example in more detail here to understand what’s going on.

https://www.interactivebrokers.com/en/i ... =936&nhf=T
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