I recently moved from my broker in the Netherlands to Interactive Brokers in the US. This post is just to share my experience and may be of interest to traders who are non-US residents.
I was doing all my trading through an affiliate of IB in the Netherlands. This affiliate markets itself as a discount broker, but the commissions are 1 cent/share with a minimum of $5. There are a couple of those kind of IB affiliates in the Dutch market, and they all have similar commissions. I wouldn’t be surprised if there are similar affiliates in many countries.
However, IB US only charges 0.5 cent/share with a minimum of $1. That means at least 50% less, and the lower minimum makes trading smaller lots cheaper and may improve the prices I get. And by the way, IB US is also a little bit cheaper when I want to trade European stocks. I don’t know why I didn’t find out earlier, but it turns out that IB US accepts customers from all over the world!
The sign up process is pretty straightforward and completely online. The best part is that I could simply use the “internal position transfer” option, because my new account is placed under the exact same legal entity in the UK as my old account with the affiliate! This also means that my securities are as safe as before. It took me a few days and a couple of help desk calls to figure out that I needed to deposit $1 into my new account before I could transfer the positions, but once the $1 arrived I could transfer everything in minutes and start trading right away. All in all it took about a week. If I would have known about the $1 deposit maybe it would take 2-3 days.
The only discernible difference (besides the commissions) is the helpdesk: with the affiliate I would get Dutch people on the phone, now I have to speak English to people with a variety of accents. Not a problem for me.
So, long story short, in a couple of days I more than halved my commission fees without any downsides (that I care about). Maybe you can do so too.
Peter
PS: a couple of days after transferring my positions and closing my old account, I got a call from the affiliate. They were more than happy to discuss a lower fees, but they couldn’t match IB US.
Hm. I got different information from IB. I am residing in Germany, the account is serviced from England.
They told me : Since this is Europe, you cannot have an account in the US, it must be in Europe".
Hm, one of these examples where you are shaking your head in confusion.
Maybe other members can chime in and comment on their experience with IB, if a US account is possible outside the US and if they got all the tax documentation they need for their local tax authorities.
IB UK or IB US have the same commissions anyway. pdvb are you sure you have a IB US account? Everyone I know in Europe has a IB UK account, which is practically the same as long as IBKR does not go bust.
I use cost pluss commissions and have achieved 0.28c/s on average by using mostly limit orders, so if you tend to use limit orders you can improve even further! But you would pay more if you are buying in a hurry, taking liquidity.
The advantage is that you have the web chat help as well, which you probably did not with the affiliate. (Today’s?)
Yes, my account is actually located in the UK. But that was the case already when I was with the affiliate (which is called Lynx, but Today’s is very similar).
I registered through the interactivebrokers.com website and my account is in US dollars. So legally speaking it’s in the UK but practically speaking I think it’s pretty much the same as the US. Especially regarding commissions.
Same here in Lithuania. There is IB affiliate but the same problems with commissions so went directly to IB without any problems. No regrets. The only drawdown seen is taxation forms/data for local authorities. Nevertheless the locals reported no any special problems with taxation.
I wonder what is difference between UK and US IB accounts? I mean why we are discussing this at all? Commission wise they are equal. Taxation the same - US based. As I understand the only difference is EU customers served through the UK somehow legally, as operationally we all using the same US servers and platforms. Interestingly, security issues, like PIN generator, are served through the Switzerland IB office. So its quite geographically distributed serving network.
Same question as @davidbv - can someone share autotrade experience by now?
Personally very interested in currency exposure hedging for EU residents having non-EUR IB accounts topic. There were some initial currency exposure hedging discussion (btw interesting topic IB account/currency wise too). Would like to hear from others EU residents any thoughts and better experience on EUR/USD exposure hedging. As for my needs I figured out better to use EUR/USD futures options but still investigating the IB technical and Options trade theoretical details.
I have not used Trade, and I’m not planning on using it. Not because I think trade is bad or something, but I’m happy with the way I’ve set things up for myself now.
I also have no experience with currency hedging. I converted from EUR to USD when the exchange rate was at 1.37/1.38 and I’m investing for the long term. I figured that it wasn’t a bad rate to start with (historically speaking) and any fluctuations will hopefully not have too much impact on the long term. So I decided to take the risk and not hedge. So far, in the short term, it added a couple of percent to my returns (now at 1.33 or so).