Which online brokers can I do international trades inexpensively?

[def]

Quote from nonam:

No,I dont understand the previous two posts.I bought some foreign stocks.I also hold some US stocks.I thought they would convert the necessary dollars to buy the foreign stocks and that would be it.But even when I dont trade,the amount of cash in my account fluctuates.It seems to be something to do with the exchange rate.Also it seems to me that IB are paying me interest on my US cash and CHARGING me interest on my foreign stocks.

Let's step back a second.

If you purchase shares in a foreign currency, you are not only subject to the changes in the stocks value but also the changes in currency movement.

The same would happen if you converted funds from USD to say HKD.

IB merely reflects these changes in currency movement each day.

As for interest earned/charged. As mentioned, you can convert the funds to cover all margin. If you don't, IB is extending a loan to you and thus charges interest.

The following is stated under "Universal Account: on the IB web site:

Trading around the world can be simple, because you are not required to open accounts in multiple currencies. Deposit a single currency in an account and when you want to trade a product denominated in another currency, a loan is created which is secured by your deposited currency. If you wish to eliminate the loan, you may do so at any time by trading currencies through our IB IDEAL network or depositing money in another currency. You will find that our currency exchange rates are much better than retail banks or exchange rates offered by the credit card companies.

In short, if you don't want a margin loan, do an FX deal. I just looked and the current HKD market on IDEALPRO is 1 pip. If you went to a bank, you would probably get at least 75-150 wide spread. We offer the best of both worlds but only you can decide which is best for your situation and style of trading.

 

[xiaohu]

Quote from def:

Lazy ****'s? Where do you come up with this stuff?

Let's see. We continue to offer additional international exchanges at competitive rates competing directly with hundreds of brokers in each local market but somehow maintain competitive.

Are we perfect - no? Do we satisfy the requirements/needs of every single trader in the world - no? However, we certainly have a dedicated work force that are busting their ****'s striving to be the best global broker.

I'd go on but I now need to get my lazy butt out of this seat and do a couple test trades on the Japanese equity market which we're in the process of releasing to our clients.

IB requests users to vote to request for lower commissions...
http://www.elitetrader.com/vb/showthread.php?s=&postid=1475298#post1475298

I wouldn't consider that you are busting your ****'s striving to be the best global broker.

I consider this complacent attitude due to lack of competition... if you are that good... this thread wouldn't have been started in the first place.....

I am just glad that for the products that i am trading i have other alternative brokers..

 

[krishiyer]

Quote from risktaker:

I need a broker that tells me the market close for tomorrow! Most brokers just give current quotes and that's just not good enough! How are you supposed to make serious dough with only knowing the past?

Oh! Ya!
I also need the book from "Back to the Future"

 

[rayl]

Quote from nonam:

No,I dont understand the previous two posts.I bought some foreign stocks.I also hold some US stocks.I thought they would convert the necessary dollars to buy the foreign stocks and that would be it.But even when I dont trade,the amount of cash in my account fluctuates.It seems to be something to do with the exchange rate.Also it seems to me that IB are paying me interest on my US cash and CHARGING me interest on my foreign stocks.

Maybe a more detailed explanation will help you:

You need to additionally buy the currencies in which you are purchasing securities to avoid being charged interest. If you don't you end up borrowing that currency (and paying interest), but since you hold US dollars you collect interest on the US dollars.

The amount of currency, say Japanese Yen, you buy does not have to be the same as your security purchases and does not have to occur at the same time. This is a huge advantage -- imagine that you're buying/selling Japanese stocks constantly. Rather than have to buy Yen for US Dollars with each stock purchase, and sell Yen for US Dollars with each stock sale (each time paying a spread), you can keep a certain amount of Japanese Yen around to support your Japanese stock trading.

Similarly, if you think the Yen is cheap today, and want to buy a bunch of Yen to support future Japanese stock purchases, you can.

 

[libertad]

Excellent Commentary All..........

What would be useful is a simple comparison chart regarding the costs in US dollars of trading the most liquid stocks on other foreign exchanges....most similar to trading US Nasdaq Stocks.....
stating the simple full pricing....also listing the most common highest daily dollar/currency amount share names and symbols....with the hours traded relative to EST....

IE...

US Nasdaq cost per 200 shares....
Stock names ...symbols
When traded EST


European Markets.... cost per 200 shares...
Stock names ...symbols....shortable....margin ratio
When traded EST

Asian Markets... cost per 200 shares....
Stock names ...symbols....shortable....margin ratio
When traded EST

This simple example would make the idea of trading world wide to a lot of people very simple...and the odds are...the participation would increase because of this very simple comparable chart representation...

 

[Copernicus]

whats the hold up with offering cash equities in Taiwan, Korea, Australia and Singapore?

These are well established exchanges how come you guys dont offer these products? In my opinion if you dont hurry E-trade is going to eat your lunch...

 

[petteri]

I have understood that Australian stocks and Swedish options + futures will be the next IB addition. But we will see.

Finland, Denmark and Norway are in my wish list....... Finland of course on the top.

IB already is OMX registrated broker, why not provide more products. (Please add OMX Helsinki and OMX Copenhagen)

I also think some investors would like to buy stocks from Italy, Spain, LSE AIM, Korea and Taiwan.

 

[rayl]

Well if this is becoming a wish list poll, then I'll also chime in on Finland & Norway.

And how about a cheaper Tokyo data feed...

 

[rayl]

And coincidentally, since we're talking about international transactions and FX conversion -- I think I've found a "glitch" in IDEAL pricing today (5/28 around 4:55PM EDT). Take a look at the attached screenshot for the USD/CAD pairs on IDEAL as circled.

How can changing USD.CAD to CAD.USD have different quotes!? Buying one is the same as selling the other, so, they should be the same!!! So buy CAD for USD is quoted at 0.9289 whereas the inverse of Sell USD for CAD is quoted at 0.9268?

Now I'm becoming paranoid when converting funds for settlement -- need to check both on IDEAL, and if necessary, pick the less convenient direction to enter the order...? Something's fishy here. The software should do this for me automatically and report the best inside quote.

 

[Trader_Herry]

There are no interest charges either, so I don't know what that's in reference to.

I think the "interest charges" referred to is the interest receivable and payable:
http://en.wikipedia.org/w/index.php?title=Interactive_Brokers&oldid=114578306#Interest_rates

Although they disclose somewhere in the sub-page, most people don't realise the full effect of it if you don't go deep into it. For example, IB takes away the interest for the first $100 000 no matter how much you deposit. This "hidden fee" will cost you more than US$500 per year.


Effects of interest policy

The interest benefits are somewhat offset in several ways:

* There is never any interest for the first specified amount in "Tier I", even if your total sum of money is over "Tier I" threshold. For example, 'customers never gain any interest for the first $10,000 in USD in that case, over if they deposit more than $10,000
* Different interest rates are attached to different tiers/parts of the whole sum of money, ie some money will earn more interest, some less
* Each sum of money per sub-accounts (ie securities & commodities accounts) and per currency is counted separately in interest calculations. For example, if you have 2 sums of money in AUD and HKD, each sum has to surpass its own "Tier I" threshold in order to start earning interest for any extra money
* Due to the fact each sector (divided by sub-accounts and then by currencies) has its own balance, you may be charged interest payments in the end even if your total balance is positive (since you may have negatives in sub-balances).

The real interest rates, after consideration of the above factors, are much lower than expected. Nevertheless the higher the balance, the weaker the above factors are.