We have lots (a really lot) of messaging that deals with various brokers and what is allowed/not allowed by them in terms of buying/selling new issues on the Over The Counter (OTC) markets and many other issues.
For instance some brokers allow pretty much any transaction. I personally like eTrade as I have never had a trade rejected by them–while I have an account with Fidelity it restricts my ability to buy Fixed-to-Floating rate issues.
This area is for an exchange of information on all the various brokers–good, bad and otherwise.
Like all the various discussion pages if folks could ‘stay to topic’ the page will be more valuable to all, but staying to point.
If you want to start a new thread go to the bottom of the page and do a comment–instead of a reply.
I mentioned a few weeks back that Schwab sometimes shows a tighter (but never wider) bid/ask spread than TD and Fidelity. You can see this at the moment with GMLPF. TD and Fidelity show 23.40/23.50 right now while Schwab shows 23.40/23.41.
P.S. Watch out if you’ve traded GMLPP at TD. Now that it’s OTC, there is a $6.95 transaction fee!
Any opinions on this? Got this today from ETrade
———————————————————
New rules will affect your ability to buy and sell “Pink No Information” securities, including at E*TRADE
On September 28, 2021, new requirements take effect that will impact the market for—and value of—certain “over-the-counter (OTC) securities” you currently hold or have held in the past. The new rules apply to “Pink No Information” OTC securities of companies that fail to publicly report and keep current financial and other company information and will restrict the ability of U.S. brokers, like E*TRADE from making these products generally available.
Some background on the new requirements
The Securities and Exchange Commission (SEC) recently adopted amendments to SEC Rule 15c2-11 governing the submission and publication of OTC quotations. These amendments will prohibit broker-dealers from submitting or publicly disseminating bid/ask quotations for OTC securities of issuers that do not meet enhanced information filing requirements.
Securities of issuers that make the required information publicly available by the deadline in the rule should not be affected.
What these changes mean for you
Starting September 28, 2021, you will no longer be able to buy or sell “Pink No Information” OTC securities through E*TRADE. Other restrictions related to the purchase of these securities may apply sooner. Please keep in mind that the upcoming changes will negatively affect the value of any “Pink No Information” OTC securities you hold now or in the future.
I wonder if there exists a Master List of all OTC ” Pink no information ” securities, so we can see if any of our holdings fall into that category?
On otcmarkets.com you can use the stock screener, select for market = pink, type = preferred, and USA issue (in my case), then sort by market until pink-no-information is at the top.
You can produce such a list at otcmarkets.com.
Vanguard banned pink no info issues a couple years ago.
Slapped that into a google sheet. You can find it at
https://docs.google.com/spreadsheets/d/18MYpt4jxWWL3isQbVPAgr99gfjcW_LP7d8JOr6Vi_Q8/edit?usp=sharing
Sorted so ‘No Info’ is at the top. There are 30 of ’em.
Thanks for doing the Spreadsheet, Bur. I was also able to obtain the info from the OTC website, but yours is more compact.
Does the restriction coming on September also include “No pink information” Common Stocks as well? OTC website says there are about 5400 of these.
Inspy, I don’t know. I should add that to create that spreadsheet I simply followed Farwell’s spec; I don’t claim that what I posted accurately captures the list of pfds which will have trading restricted.
Also, note there’s a lot of discussion about this issue over on Reader Initiated Alerts.
Not sure if this is the right area but I saw some institutional comments. In any case, is there a decent quality source people use for basic features of institutional prefs / bonds i.e. quantum but for the institutional space? FINRA is typically missing call dates/floating coupons, same for IB and Schwab, ETrade/Tradeweb is ok but it only shows maybe 10% of the population at any one time.
A.
bloomberg or eikon
re: institutionals
You can go to Bloomberg or Eikon (Reuters) but you will pay richly for the privilege.
Personally, I do my own spreadsheet for those issues in which I have an interest. The FINRA bond site can help in identifying issues of interest and provide pricing information. You can build your own watch list at FINRA, too, for current price information.
For terms, I almost always go to the FWP for the issues I follow. FINRA links to the 424 but the FWP is much easier to follow, and provides the CUSIP.
Be sure you understand the terms of the issues of interest as there are meaningful differences between institutionals and exchange traded issues.
If you’re going to be serious about trading institutionals I recommend IBKR. Better availability and better pricing than other platforms, although I also hear good things about Fidelity’s bond platform. I also buy through Vanguard but only if it’s buy and hold forever as spreads are not tight enough for my liking.
thanks mcg, Bob. Was hoping to avoid Bloomy/Reuters as I no longer have access.
Not all cusips have a prospectus linked from FINRA e.g. 174610AH8 from Citizens Financial etc. In fact, I couldn’t find complete details about that issue anywhere.
174610AH8
I loosely follow the issue and it is one of the few for which I could not find a prospectus. It probably was issued by a predecessor company. But look through other SEC filings and you will find terms.
Info I have is it went to floating as of Apr 6 at 3mL+3.96% and trading right about par, so about a 4% yld on a callable floater. Wish I’d bought it (and many others) a year ago when it traded down to 65.
CFG had, if I recall correctly, has a total of 4 preferred on the institutional list.
https://www.sec.gov/Archives/edgar/data/759944/000119312515119732/d901081dex31.htm
Good research! Appears that at one point they were issued as 144A securities and later registered.
In the ongoing saga of getting-to-know-IBKR… In addition to a $1/bond commission (expected), IBKR is charging me a varying amoung of “Misc Fees”. Anyone know what these could possibly be?
These Misc Fees seem to have no relation to volume (I was charged a few bucks more in ‘Misc Fees’ for a *smaller* order).
I’ve never seen these fees with other brokers, though I’m not complaining: I’ve never been able to place a limit order on bonds with other brokers the way I can w IBKR.
Bur asked: “Anyone know what these could possibly be?”
Bur, the “miscellaneous” fee is just another form of commission for bond trades. You have to add these two together to get the actual commission that was charged. And you never know in advance exactly how much you will be charged for any bond trade. The reason for this is that IB uses many different bond trading exchanges to place your trade. It seems that they do NOT all charge the same amount and IB just reflects the actual charges. In general the maximum you will be charged is $1.5 per bond on buys. However it can be larger for small quantities of corporates and/or CD.s Say you have a buy order for 25 ($25,000) corporates and only get filled on 2 ($2,000) In that case you might get charged up to ~ $4 per bond. Getting fills this small are NOT the norm when you have an open order to buy a larger quantity but it does happen. . . Not bad, not good, just another quirk you have to deal with.
Noted, and thanks.
BMTX – Does anyone else own BMTX at Fidelity from the original spinout from CUBI????? To this day Fidelity is still identifying it only as 232CNT014 and not by symbol BMTX. To the best of my knowledge I still cannot sell it at Fidelity if I wanted to… Call to Fidelity ends up with a line of crap about them still waiting for the info to come from the company. Yeah, right! Pick up the phone and find out why 3 months after the rest of the world has it identified as BMTX you are still waiting on the company…. Having owned CUBI at both TDA and Fidelity, I know TDA got the info to take care of this months ago. Keep waiting for Godot, Fidelity… don’t do anything proactive…. grrrrrrrrrrr… Anybody else still own “232CNT014” at Fidelity?
Can you sell it by replacing the symbol with the Cusip #? If not ask the phone rep to do that, sometimes it works but not all reps know that.
Martin – I’ve not toyed with it at all because the amounts are small and I planned to take a wait and see attitude on the position anyway to see if they can make something out of this fintech…. But it does bug me that it’s still not shown properly or valued at all in my account… After the fact I began to wonder whether or not there’s a lock up period for those who acquired this directly via that CUBI spinoff, but nevertheless, it makes no sense that TDA has my position there properly identified as BMTX and Fidelity doesn’t… Also in the back of my head, I keep betting myself that within a few days time Fidelity will have miraculously fixed this despite their excuse making blaming the problem on external forces… We’ll see.
2wr: It’s times like that I wish they’d offer a pay-as-you-go support option with one of their web engineers. You just know that 5 minutes on the phone with one of those folks would lead to an ‘aha’ and a bug fix in short order. Although I’m probably underestimating the size of their bug stack…
I moved my portfolio of mostly Canadian preferreds from Schwab to Fidelity after Schwab refused to correctly classify them as qualified dividends and feedback from this board indicated that Fidelity didn’t have the same problem. That was incorrect information, Fidelity misclassified them all, except for one small holding in a Brookfield preferred issue. I did a write-up of IRS regulations which clearly allow for qualified treatment and submitted a spreadsheet showing the results. My CPA is going to report them as classified on my tax return. Fidelity’s service team told me I could pound sand. I then reached out to their private client support service team, which is at least being polite enough to read the regulations that I sent them. Hoping for the best.
TW my first hand experience is that Schwab misclassified 100% of Cdn pref dividends. Vanguard got them 100% right as did IBKR and TDA. No experience with Fidelity on the subject.
Vanguard got the withholding on one Cdn pref wrong initially but corrected after some persistence on my part.
Go where you are treated best.
Tim, I’ve had experience with this issue at Fidelity. Well. not Canadian preferreds…but other preferreds that were reported by Fidelity as non qualified when I knew they were qualified. I too was told to pound sand by customer service. Actually, they flat out lied to me and said they had verified the info from the company’s website. I asked for a link…no response. I eventually got it solved with an email from the CFO at the company verifying that the dividends were qualified. Situation resolved by the TAX department…Call them, not the regular service group. Rep there actually listened. Good luck.
Thanks, I’ll let you know how it turns out. They’ve said it will take a while to address it. Better a slow “yes” than a quick “no”
Fidelity has taken up Schwab’s position asserting via a servicing processor that Canadian Preferred issues must be registered with the US Treasury department as equities for their dividends to be treated as QDI. IRS regulations do not include this requirement, under IRS Publication 550. Disappointing. Any moron with a computer terminal can look up (for example) the Bank of Montreal’s investor relations information and see that their preferred stocks are equities. If I can get the exact treasury department filing repository I’m willing to ask my issuers to make such a filing. Other suggestions welcome.
Stop beating your head against the wall. Vanguard, IBKR and TDA (for now) get the taxes right. Don’t be Don Quixote, just move.
They actually don’t get them right.
They are just relying on the treaty provision and being lazy.
It is a little more complicated than that.
This page from Riocan IR explains a little better.
https://investor.riocan.com/investor-relations/distribution-info/United-States-Unitholders/default.aspx
C Schwab Baloney
I haven’t got my 3/31 LTSL payment. Of course LTSA came in just fine. Hear is what Schwab said after two chats and four useless reps;
I do apologize, it appears that the payment for LTSL has not arrived yet. We will only post payments to your account once they arrive from the respective company, but not before. Typically the payment will arrive on the payable date or soon afterwards, but it appears this one is late. We will post it to your account as soon as it arrives, most likely later today or over the weekend, or you could reach out to our Fixed Income specialists directly at 800-626-4600 for more information on this
What a crock….they were a day late last month giving me my CPTLA payment because it was a “weekend”. No weekend this time and more buffoonery. Aaarrrggghhh
It wasn’t just Schwab. That is what happens with delisted securities. They get paid by wire instead of automated and the payments can get lost for a few days.
Sticking my toe in the water with IBKR and I have a quick survey question for you IBKR clients: which of their platforms do you use?
I have an IBKR Lite account. I’m on a Mac using Chrome. I finally learned (after finding that phone is useless (no one ever answers) and spending almost two hours with crap chat technology and support reps with widely varying knowledge) that I can’t use the their “Client Portal” for the paper account. Instead I am forced to download and install Trader Workstation.
Is that others’ experience as well?
a) could not locate “bottom” for posting new item after massive scrolling. Anyway, vanguard is having big tech troubles. Most trades ex 4 stock/etf have to be via phone. I made an on line trade whose purchase price not “right” and a commission charge of $25. which should have been zero. Online ? page says answer in up to 7 days. Think care is needed.
3/29 @ 11:15
Can’t help with that, but would love to know in a few months if you’re happy. I have way too much under the schwab umbrella now with the TDA buyout (multiple accounts that used to be with different companies) and am considerint Etrade and ibkr as the next ones to open. Not comfortable having that many eggs in one basket, and not looking for app only platforms.
This isn’t exactly timely but ……
No brokerage is perfect and that includes IBKR. If you need a lot of telephone support IBKR isn’t the best. I find that I can get the answer to almost any question online. Sometimes just by searching in your browser. If it’s an account specific question I use messenger in Portal. Get an answer within 24 hours. In 2 years I have called support exactly twice and probably didn’t need to.
I get my calls to Vanguard answered in 5 seconds but then I can’t buy Canadian issues, institutional issues, and lots of other thing that I can through IBKR. Want issues traded in Singapore or an Irish ETF or a Guernsey royalty trust? Try getting that on Vanguard.
A lite account gets you Portal or TWS but not Web Trader, which is too bad because it’s my favorite. A standard account will get you all 3 platforms but comes with a 10$ monthly fee if you don’t have 100k in the account or don’t generate 10$ in monthly commissions. I have over 100k in my 2 IBKR accounts so no limitations You do pay commissions but then most of what I buy at IBKR is either unbuyable from other brokers or comes with a commission. At the end of the day my IBKR accounts cost me zero incrementally. The money I save on institutional issues at IBKR overwhelms any fees that I might pay.
IBKR is my top pick hands down for great features. But as others have noted, there is no effective or timely support and the products have a steep learning curve. I use TWS in Mosaic view, and I’m still learning new ways to use the many algos.
IMO IBKR is not a good choice for probably 99%+ of investors. Maybe folks that read III posts fall into the 1% where it is a good choice. An extreme example would be an investor that wants to spend one hour per year on their investments just to rebalance would NOT be well served on IBKR. At the other extreme is an investor that spends 10 hours a day investing might be well served on IBKR. And the 10 hour a day investor better need a feature(s) where IBKR has a clear advantage over other brokerages. If that investor can get everything he/she wants on Fido,Schwab, Etrade, Vanguard etc they would be better served there. Brokerages are like spouses, they all have quirks. It is just a matter of finding what works best for each investor.
In addition to the steep learning curve for Trader Work Station that Qniform mentioned, it is VERY easy to “fat finger” a trade on IBKR. There are less “guardrails” or “bumpers” compared to other brokerages. You might consider this a good feature or a bad bug, just depends on your approach. If you want to buy a preferred for $25.00 but accidentally type $52.00, you just bought your full order quantity. Depending on the quantity, the last share you just bought MIGHT be as high as $52. Maybe you can “bust” the trade, but maybe you can’t, it just depends. Say you bought some shares at $26.00 and some at $27.00, they probably would NOT bust the trade. If most of the shares were @ $52.00, they would attempt to bust the trade, but you are never guaranteed it will be busted.
Just understand which brokerage best fits your needs and understand a perfect match might not exist.
the clearly erroneous guidelines are pretty straightforward so they’ll likely bust all trades above the threshold reference price
Bob, qniform, Tex–thanks for your perspectives and the sanity check. I am attracted to IBKR by the promise of lower-cost fixed-income trading and access to more investment vehicles (EIX is a good example for starters: nice to be able to trade it directly rather than calling a bond desk). I think my eyes are pretty wide open. Definitely just testing the water for now. We’ll see how it goes.
Recently I noticed on E*trade, the cost basis no longer matched the actual trade on some securities. I wrote support and they said they had readjusted the cost basis to subtract dividends reclassified as RoC. What surprised me was that a preferred, CMO-E was readjusted as well. Since preferreds have a face value redemption, I thought RoC did not apply. Am I wrong? Also some of the computation appeared to be off.
CMO is a REIT, so if they paid out more than they made it would be ROC (even on the pfd’s) which deducts your purchase price basis. Most if not all REIT pfd’s are like that (In addition to a few other categories). The good news is the ROC adjusted basis can’t go below zero (at least that’s what my tax dude told me)
ROC can apply and has applied
see here for the details on your preferred e based on the year you bought it
http://www.capstead.com/investor-relations/stock-information/dividend-taxation
It’s that time of year again (tax time) and Schwab has once again displayed their ineptitude. Every year they incorrectly report qualified dividends as non-qualified. At least this year they didn’t claim a MLP distribution was a non-qualified dividend as in past years. This year they reported TNP-C, GLOP-C and the since renamed Seaspan preferred as non-qualified. It is one thing to make an error but something else when they display an attitude when requesting they correct their error. Another brokerage firm I use has never made such errors. Case in point, last year I held TNP-C in both firms. Schwab got it wrong and the other firm got it right. I contacted Schwab about this years errors and got the typical response, “I’ll pass it on”. Going on past years experience, it will be weeks and more emails before I see a corrected tax package.
One has to wonder how many hundreds of thousands dollars in tax is collected in error. I’ll wager that most people who use a tax accountant overpay their tax because the accountant does not question the brokerage supplied 1099.
Was Seaspan broken up into non-qualified/return of capital?
Seaspan and GLOP both have a split between ROC and Dividends.
here is Seaspan’s notice.
https://ir.atlascorporation.com/download/2020+Dividend+to+Class+A+Common+shareholders+-+1.30.20_Amended.pdf
TNP you will need to get Schwab to fix.
Good luck getting Schwab to fix it. Please let us know if they do. Not holding breath.
Received a corrected 1099 from Schwab. They corrected the errors noted in my previous post. Wonder how many tax preparers, if any, question brokerage supplied 1099’s?
P.S. Saw today (not an official IRS announcement, but close enough) that April tax deadline has been extended one month.
Yeps, to 17 May. But deadline for paying Q1 estimated taxes remains at 15 April.
In the “You have got to be kidding me”….
https://www.businesswire.com/news/home/20210220005020/en/BG-Foods-Announces-Tax-Treatment-of-Common-Stock-Dividends-Paid-in-2020
From the release.
“Holders are urged to check their 2020 tax statements received from brokerage firms in order to ensure that the cash distribution information reported on such statements conforms to the information reported herein”
Here is the subject of the press release. Note the date of the accountants signature at the bottom….
https://bgfoods.com/wp-content/uploads/2020-Common-Stock-Distributions.pdf
Anyone noticing problems with TDA today ?
They have a banner posted saying they are having problems posting customer accounts correctly and information may not be accurate.
I also noticed when looking at the Chart for IPLDP the 3 yr wasn’t showing correctly
A cautionary tale –
My wife has been trying since the beginning of the year to transfer a BNY/Mellon Roth IRA to her E-trade Roth IRA. BNY/Mellon has been slow and uncooperative every step of the way. When Etrade was called in to help, they got the same stall as we did, with BNY/Mellon eventually insisting Etrade submit BNY’s special forms – by mail.
After all this, BNY/Mellon finally descended two days ago to suddenly requiring a mailed, signed authorization from my wife (first time this is mentioned!)
I would never leave money with them again. Although they seem to be trustees for billions and billions of dollars, I found them untrustworthy with my wife’s pittance of a Roth IRA.
Opportunity is knocking!
IBKR now has a page set up to facilitate investments in hedge funds. You can’t invest directly off the platform but many of the funds provide documents and a subscription agreement from the IBKR platform.
So, paying 2% annually and 20% of profits isn’t just for the big boys any more; you, too, can get in on the deal. So, if your Game Stop short blew up on you you have a chance at redemption.
Line forms to the left.
But they’re really big profits, Bob! 😉 (with apologies to Firesign Theatre)
TD withdrew NGHCO shares yesterday. Got the $25 principal per share, but dividend credit was only 3.9 cents per share instead of the 9.375 cents that it should have been. Anyone else have this problem?
nhcoast. Rec’d .093@ from Fido and .039@ from TD. Did you call TD. If not, I’ll call today. Txs.
nhcoast. TD corrected error on NGHCO interest.
Not sure of what to make of this headline…
Interactive Brokers client margin loan balance $40.8 bln at end of Jan., up 49% from a year ago
IBKR clients are generally not the ones who borrow on margin like that…
Can’t speak to IBKR clients’ characteristics, but the news is consistent with what’s going on across the board: https://www.advisorperspectives.com/dshort/updates/2021/01/22/margin-debt-and-the-market-up-7-7-in-december-another-record-high
IBKR was by far the most open about what they were doing, when, and why. I don’t like to see intermediaries interfering in markets but I conclude IBKR did what they did for the reason they stated. They were protecting themselves from over margined customers and not trying to protect any particular client or client group. IBKR, unlike some other brokers, did not treat “retail” differently from “institutional”.
Unfortunately, in protecting themselves they also helped the shorts. But as I said, I am convinced this was not the intent, just an unavoidable consequence. IBKR lifted the restrictions very promptly. None of this you can buy one share BS that you saw from RH.
I also note that unlike Robinhood, IBKR does not sell order flow. The practice benefits the broker at the expense of the investor and creates a conflict for the broker.
Yes, IBKR does sell order flow under their lite offering. The clearing collateral issues were street wide, undercollaterized clearing firms had to restrict trading in order to not exponentially increase their capital requirements going into the next settlement day. Unfortunate how it played out, but thats the risk of working with discount brokers that use undercollaterized clearing firms to increase margins.
Which brokers treated institutional different than retail? Also, note that brokers can use multiple clearing firms which can cause different treatment across client accts
It will be interesting to see RobinHood CEO Vlad Tenev explain this to the House Finance committee. chaired by Maxine Waters. They have scheduled a hearing for February 18th. Maybe congress can pass a new law that says brokerages cannot limit trading . Might legislate PI= 3.0 at the same time, just to simplify things.
Across the board?
What could go wrong?…..
They don’t.
It’s just that IBKR has had a lot of client growth this year. Their client equity grew 70% YoY (now $ 303 billion), and their margin lending is just $ 40 billion (up 49% YoY).
https://investors.interactivebrokers.com/ir/main.php?file=latestMetric
Does anyone know what is going on at Fidelity? This past week when a put in a Preferred Stock Symbol, an example – Ford Series “C” I get the following message: “Sorry, no results were found for ‘fprc’, please try a new search!” Yet the Symbol in my positions is still FPRC. I am only using Ford as an example. I seems to be happening with all the Preferred Symbols I put in.
Just tried a Fidelity buy for FPRC and it worked fine.
The search function is garbage at Fidelity. I find that I often have to spell the name of the company and let Fidelity’s computer populate the symbol(s). Sometimes when there are many issues, they don’t all fit on the dang drop down suggestions. Again, spelling the whole stupid thing usually works.
I get around that by pretending to buy something else, then change the stock symbol in the buy menu.
If it’s research you’re looking for, I do that at some other site.
Fidelity’s nanny state just banned the purchase of LMICL, and I presume LIMBL too. I’ve been trading it for 5 months for multiple small but steady profits, over 10% APY with low risk.
Time to take that money somewhere else.
I own both LMICL and LIMBL at Fidelity and what it says now seems as though what they’re doing goes beyond just Legg Mason: “Opening transactions for Pink Sheets (without information) are not permitted because of the risks associated with these securities and all microcap securities.” You could be right, Martin – it might be time to move… I wonder if my Nanny will let me?
Then Fidelity is catching up with Vanguard. Vanguard banned trading in all but a few categories of OTC issues. They won’t trade certain issues of such fly by night outfits as BNS, BCE and SLF.
TDA will trade almost anything but the commissions can add up.
This is sort of off-topic, but the CEO of IBKR said something interesting on CNBC.
All of IBKR customers are now net short in position. This can’t be good for the markets.
Question and answer start at 2 minutes in the video linked below.
https://www.cnbc.com/video/2020/12/29/interactive-brokers-chairman-thomas-peterffy-on-handling-record-volume-and-volatility.html
“A fantastically unusual thing happened among our customers about a week ago. Our customers are traditionally long the market. A week ago it has changed: our customers tend to be on the selling side of options and there is such demand for out of the money options that our customers became sellers so they overwrite their long position in stocks, and it’s usually about Tesla, Amazon and Apple – that’s where most of the action seems to be. So the Robinhood folks are long these options, and IB customers are short these options. It’s a very interesting situation, it has never happened in our history that our customers as a whole were net short the market. But as of yesterday. that is the case.”
Anybody own UBS shares?
Did your broker split the November dividend into two payments?
I contacted Ally.com about buying Canadian preferred stocks and this was their reply: “OTC stocks with 5 letter stock symbols ending in ‘F’ are charged a $50 foreign settlement fee in addition to the normal commission rate.” Just thought you would like to know. Will stick with TDA.
Ally is not a good place to trade preferred stocks. Don’t be surprised if you try to sell and get a warning message that you don’t own it.
TDAM Comment and warning:
I just got off the phone with TD Tech. I have built extensive, categorized Pref Watchlists on their tool; QDI, IG, Banks, REIT, nonIG, CN OTCs, etc.
Over last weekend all but five (of the least used lists by the way) of the lists were deleted and one was duped fourteen times. Somebody flipped a button in tech and whooooopppps!
Whatever happened, I could suddenly delete the dupes, but ALL THE REST were PERMANENTLY DELETED.
Their tech can NOT RECOVER. I am in mourning.
******Lesson: Use the EXPORT DATA on the gear icon, use EXCEL to Save, which I am told is the best fit. Periodically delete the old and just export the new data when I groom the lists.
Lesson hard learned…JA
Joel – Are you talking about something happening within your ThinkOrSwim account?
2wr, I do not use TorSwim. Just a regular account.
I keep about nine account linked there so I can do only one logon.
I love the Combined Positions Watchlist which combines all linked accounts and positions into one global view.
The Watchlists which I organized from many sources and mental constructs are washed.
I suppose this gives me an opp to have a fresh view of my whole construct and (neurosis speaking) it may be a blessing in some disguise? Maybe it just happened too.
The Watchlists seemed to be available in whichever account I was in.
Also, I have migrated about 25% of our funds to IBKR and have been digging in on their screens and tools. I would think there is prob a Global View Linking there too. Want to be ready if Schwab ends up being a vacate scenario.
Thank God for Tim and Yuriy’s resource as a known go to source too.
Boy, there’s so much I can relate to in your reply, Joel… I love your sentence, “I suppose this gives me an opp to have a fresh view of my whole construct and (neurosis speaking) it may be a blessing in some disguise,” because sometimes I think the same way…. I’ve got a ton of watchlists, 7 pages of them, on TOS, and yet in the back of my head when I go thru them, I can’t help but think why am I watching all this crap” It’s the wrong things to be watching and I’d probably benefit from a complete scrapping and starting all over… Yet I don’t. And BTW, I mentioned TOS because in it, you have an ability to save your save your workspace so that if anything goes wrong and TOS all of a sudden opens up in a format that’s not of your design (It’s happened!), you can choose to revert to the saved format. Somehow, it does that reversion normally without losing any additions to lists you may have made since the last save, so that comes in handy. Not sure it would have saved you, but it does give some backup peace of mind.
Also, as you mention neurosis, I could mention paranoia…. You speak of using a Combined Position Watchlist at TDAM… As convenient as that sounds, I am paranoic about consolidating account info across various brokers in a single place… It just seems to me that that’s an invitation to hacking. I’m so cynical about this that I won’t even give Norton 360 all my various info so they can protect me from the dark web like they want… to do that, you have to begin by trusting Norton 100%. To quote Dan Carvey as H.W., “not gonna do it.”
“Wouldn’t be prudent.” –Dana Carvey
I keep 4 simple watchlists on ToS: Ute qdi, other qdi, non-qdi, and CEFs. It has worked well this year. Or I have just been lucky.
I am up a bit, but I don’t care about that. Only income–which has increased ~12% YoY. Not as well as many, I would assume, but I’ll take it. Nothing fancy or exciting. KISS is my motto at this point; not trying to maximize anything anymore.
Looking forward to next year (except for Schwab taking over my holdings again) when I hope to trade less and increase my income even more.
Life is a bitch & then, well, you know.
GLTA
Camroc – “Well isn’t that special” – D.C…….. You know, I’ve never really quite understood what the meaning is when someone says something like “I’m up a bit but I don’t care” [if I’m up or down] because my income is up 12%. I don’t understood it when the HDO crowd swears by it nor do I now either… How do you measure “income” to say it’s up 12% and then once you do, still not be concerned about whether or not your investment portfolios’ net worth is up or down at the same time? Are you measuring it by estimating how much higher your reportable income is going to be this year vs last and, if so, how can that be a good thing if at the same time your portfolios total values are up just “a bit?” I think I have an SA dialog in the back of my head between Pendy and shall we say an “anonymous” but griddy source when saying this, with P justifying his investment in XOM at 80 as being a good thing because it increased [or generated his expected] income even though XOM went from 80 to 30 immediately thereafter. I’m guessing from some of your prior posts that you’re a person fortunate enough to not need to take much out of your investment portfolios to live so how’s it a good thing to have “income” up without concern for the overall portfolio’s value?
If this is not the proper forum for an answer, I’d love to have a better understanding of your philosophy if you’re willing to share and I can be PM’d via SA. To me, whether or not it is measured by “income” or “appreciation,” what matters is an ability to increase net worth of the portfolio because I don’t need to withdraw much income from my portfolio to cover day to day living expenses and feel good knowing if I have a growing asset base I should be better prepared for the inevitable emergencies that come with age, aka “old age.” And yes, I do tend to focus on achieving that growing base thru the more conservative approach of focusing more on div and interest bearing vehicles moreso than vehicles expected to appreciate but I do have both. BTW, personally I’m probably not far off from your same performance numbers this year though to be honest, I’ve only ballparked them to date and haven’t a clue to what degree “income” is either up or down..
Sorry to have alarmed you with my flippancy, 2wr. But I really do not worry much about being up or down in the market. Here are a few things about me:
1. I don’t follow Pendy & his gang. Nor do I read when Grid and others take them to task. In fact, I asked Grid why he bothers doing that and he said he’s really just trying to warn others. Now that’s truly noble & altruistic, much like the nobility of what he gives away gratis here and elsewhere. I have profited greatly from his wisdom and bow to the light within him.
2. I was down greatly during the March swoon. For example, I watched my overloaded EPD drop from the high 20s all the way to 10.27 and I never flinched. In fact, I bought a lot more of it until the yield dropped back below 11% again. Imagine that. Ten percent was no longer good enough for me. lol
3. At one point during those darkest days, my portfolio was down almost 40% and I didn’t panic. So being back to 1 or 2% over last year at this time seems pretty pretty pretty good to me. As I said, I’ll take it, but I’m really only interested in income because I’m ancient and only hold things I believe will pay me for the rest of my days.
4. I also made almost six figures trading this year: Illiquids for beaten-down quality liquids and back again. I stayed on the high ground and never once followed Grid into the weeds where he is very agile. A man’s gotta know his limitations.
5. My portfolio, the one I SWAN with: MLPs 35%, Illiquid preferreds 40%, CEFs 13%, old treasuries with floored 4+% yields 10%, and the rest in miscellaneous REITs and foreign common stocks. I believe it will last me out.
6. I have led an exciting and satisfying life, a real adventure, I tell ya. I’ve been ‘ever direction’ as my pappy once said on one of my rare visits home. And I’ve ended up in my dotage debt-free, with decent healthcare and more than enough income to support my wants and needs. I live in a comfortable house in a nice town and drive decent but not showy cars. I don’t try to impress anybody. My only real vice now is drinking very good wine, which I do almost every day. And Lou Gehrig thought he was the luckiest man alive. Ha!
“Woodrow, it’s been quite a party.” –Augustus McCrae
Only here on III could I ever expect to receive such a wonderful response to an esoteric question….. Many thanks, Camroc…
Sometimes when I take life’s downs and ups too seriously, I try to keep in mind the sage words of John Popper:
“Sit at the pier watch the sun go down
Another lost little boy in a big old town
I want to laugh I want to cry
But no matter how hard I try
It won’t mean a thing in a hundred years”
Camroc – good philosophy. I am along the same lines. I used to worry more about the portfolio value but now my main focus is income.
I do think it is part of human nature to focus on the overall portfolio value but over the years, I have focused less and less on that. Like most people, my portfolio value dropped this spring but even while it did, my projected dividend income really did not change and now the overall portfolio is a bit higher than before.
Now I am 59 and retired early a few years ago and part of what helps me with this philosophy is how I structured my overall portfolio. I did not want to worry about ups and downs in the market before my wife and I started drawing social security. So besides my investments, I committed an amount in CDs and online money markets to basically fund living expenses til I reach 65. And my wife was still working part time (she just retired a few weeks ago). So I don’t need to draw the dividend income hopefully for another 5-6 years.
Not worrying about the portfolio value allows me to take the long view on things. Everything in my portfolio earns a dividend. I am probably 40% preferreds, with the other 60% split among REITs, a handful of MLPs, Common stock of long time Dividend Payors and a few BDCs. Like you and others, I took advantage of the spring crash, selling some things that held up and buying ones that were oversold – not only on the preferred side but also the common side.
My goal has always been to craft a portfolio to generate sufficient income to live off without having to sell investments. If one can do that, you really learn not to focus on the portfolio value
But everyone is different
great discusssion from all of you, have some of all the assets that have been discussed in our accounts mlp’s, reits, taxable bonds, Canadian dividend commons, prefferreds, cef’s, fixed annuity in retirement accounts,US stock qualified dividends, and triple tax free muni’s in our taxable accounts and right now a lot of cash, since cd’s and short treasuries are a mute issue. the only thing I’ve ever been concern with was “cash flow” an SWAN. This portfolio has changed some over my “semi”to then full retirement starting with taking two company pensions early at 55 and SS early at 62. Just getting old now 72 but wouldn’t change a thing but my birth certificate. been folllowing “III” for about a year, bunch of great folks!!! thanks to all
2WR, If my words of caution helped some with Pendy, that is great. But mostly I did because it because he is pi$$ poor investor and mostly an arrogant POS. If he knew half as much as he thought he did it would actually be twice as much as he really does know. I liked poking the pig. He has me blocked off so I cant reach him anymore. SA likes protecting the “Mario Mendoza” investor hacks of the world if it nets them a buck.
Joel, IBKR has a function to import a ticker list from a text or csv file into a tab on Trader Workstation. If you maintain your watch lists in an excel or text file, you never have to worry if IBKR somehow deleted your lists. Separate from that, IBKR lets you back up your settings to your local box. So even if they deleted your entire setup, you could restore it from the local copy. Trader Workstation automatically saves the last 7 days of setups, so even if you did not manually save a copy, you have some ability to recover.
Unfortunately the stock ticker import function has been broken for the last few software releases, but you can still manually enter them into a tab. Yes, it is a pain, but you should only have to do it once. (I have notified them that their software developers broke this function.)
I only mention this since you already have an IBKR account. It is not a sufficient reason for anyone else to open an IBKR account. Like all brokerages, there are pluses and minuses.
I wondered why importing tickers didn’t work. Hopefully the software guys at IB fix that soon.
In addition to the backup of your IB TWS settings, which is stored both locally and with IB, you can also export each page/watchlist as a text file via
File->Import/Export->Export Page Content
I do this from time to time just in case my settings files get corrupted and I don’t notice until the week’s backups have been overwritten.
The above will save both the tickers on a page as well as any other formulas, notes, etc, you might have made. I have a lot of notes like that, so I sometimes search for a ticker in the exported text files to get all the context (for Mac/Linux users, grep -C10 -i TICKER FILE.csv).
I know IBKR had software problems yesterday. I got a nice email this AM telling me why they are SOOOO SORRY. No problem.
I have need to talk to a broker today, before I am gone until next week.
Their queue is answered after a half hour wait, then qualified and immediately transferred, with out any hesitation to “someone who can help you”. They don’t even want to say , ‘this is Mr Broker by name.”
I have now been on hold for over one hour with a simple question. It would have taken less than one minute to resolve, but the management over there does not set behavioral guideline for their employees.
While waiting I emailed a detailed complaint to them as well. I will be interested in their reply…if any.
I have had issues with IBKR being a bunch of goombas in a swagger krewe, but this last interaction is completely unprofessional and what is to be expected if you do business with them.
Like DE-Bob has suggested, paper trade their account until you have good command of it. It can be retained even if you have an account and can be toggled over to for ‘practice and understanding’.
A report from real, factual experience with them…AGAIN!
Tim’s site here is a good group-learn exercise. JA
Joel – that was the first outage in my year+ at IBKR. But the timing was certainly terrible.
Use the secure email system for questions. Rarely is anything urgent and they do answer the emails within 24 hours.
Good evening,
I am looking to open an account at a new broker since I got tired of Fidelity not letting me purchase some things (fixed to floating preferreds for instance) without having to call them, which I don’t want to do. Funny enough they have no problem if I purchase them when they trade on a temporary ticker, but not afterwards.
Any recommendations? Moving the IRA out of Fidelity would be a hassle due to size, but at least a portion of the taxable account where I can buy these few things that Fidelity is “protecting” me from. I just don’t want to open an account at Schwab or TDA, etc. and find they also will not let me do this.
Thanks in advance,
Miguel
Generally speaking, Schwab and TD will let you buy these and most any other preferred you want. I’m sure there are exceptions. One thing to watch out for with TD is that they do still have $6.95 transaction fees on OTC securities, so if you trade any of those, be aware. And, of course, TD will be merged into Schwab in the next 18-24 months, so factor that in if you want. I have a captive account at TD, otherwise I wouldn’t have much there – but I would keep an account open just to have the Thinkorswim quote streamer.
Thank you for the info. Would “grey ticker” preferreds be considered OTC? I have had OTCs purchased through Fidelity and that is generally not an issue, but I am not sure what the status of grey ticker preferreds is. I will double check with TD.
Thanks again!
Miguel, Greys are part of the OTC. But they are the “bastard” area of it. You will be flying blind being no bid or ask spreads are posted, and pricing can be hard to nail down. Greys are subject to $6.95 fee too, provided of course a transaction even occurs.
Thank you. That is what is funny about Fidelity. I can (have) buy fixed-to-floating preferreds when they come out with their temporary tickers, and pay no commission. But once the permanent ticker comes online, I can only sell them, and cannot purchase more of what I already have. It makes no sense whatsoever. But I guess it does not have to.
In any case, I can then have an account at TD to buy fixed-to-floaters and keep mine at Fidelity for other things (such as temporary tickers) or other investments. The limitation on Fix-to-Float that Fidelity imposes is frustrating; it works pretty well otherwise for everything else I need.
Thanks!
Hi, Miguel
I’ve had same frustrations with Fid, but haven’t left (I’ve had an account since the late 70’s when I first had some cash and MMs were paying ~ 15% IIRC, and they have my workplace retirement account, so easy to move funds, do a Roth conversion, etc.).
FWIW I’ve used Wells Fargo Advisors (again mostly for historical reasons, including 100 free trades/yr when everyone else charged $8, then 5, etc., before free) to buy F-F or BBs, although I dislike navigating their website. If you leave your holdings page, eg, to place order, when you go back, it defaults to their format, even if you’ve set up a custom format, and prices reverts to 15 min delay, so you have to re-update. Never set up an IRA, so BBs or REIT preferreds taxed at non-qualified rate.
Now using Vanguard, as my old mutual fund IRA there was quickly converted to a brokerage account. Able to buy BBs and F-F without difficulty so far.
Vanguard may be another option, yes. Anybody has any experiences (good or otherwise) with Interactive Brokers? BTW, thanks for all the help.
Miguel, scroll down this page and you’ll find PLENTY of feedback on IBKR. See for example https://innovativeincomeinvestor.com/broker-and-brokerage-information-exchange/#comment-42073
Another reason to watch UBTI …………..
Unrelated Business Taxable Income is generated by many partnerships and MLPs. It’s a bad thing and an especially bad thing when it happens in a qualified account (IRA). If you go over $1,000 a return has to be filed and tax paid, notwithstanding that it may be in an IRA.
In the case of an IRA, custodians, not investors, are responsible for filing the return. They don’t like doing it. Some brokers won’t let you put MLPs in an IRA. Others charge punitive fees. This is Vanguard new policy:
“Master limited partnerships (MLPs) in an IRA. Vanguard Fiduciary Trust Company (VFTC), the custodian for IRAs held at Vanguard Brokerage Services (VBS), is responsible for IRS Form 990-T tax filings for MLPs. VFTC will begin charging a $300 fee per account for these filings.** VBS will facilitate collection of the fee by deducting the fee amount from a client’s brokerage account when a filing is required.”
The solution is simple: don’t put things that generate lots of UBTI in a qualified account. The amount of UBTI generated can almost always be predicted in advance from information provided on a company’s website.
The IRS has been stepping up enforcement in this area and broker’s are responding accordingly.
Schwab did right by me. They had trading system problems on the busy morning of Nov 9 when I was trying to liquidate my REITs that had gone up 25% in one day. Many trades couldn’t complete but one $25,000 trade got sold twice. Didn’t want to cover the sale because wasn’t sure it really happened and couldn’t get thru phone lines for 4 hours and by them price had gone up 10% more. They told me to cover and dispute and today 2+ weeks later they credited my account for the $2500 loss. Can’t imagine how many millions of losses they had to cover on that day since they told me they usually can handle disputes in 24 hours.
Merrill edge unavailable?
I get that msg trying to login. Is it me, or is it @ Merrill?
Anybody?
same for me as of 10:28 central time
Merrill has been down for more than 2hrs. No explanation to be found thus far… Typical Merrill.
WOW! Merrill was down from the open to about 1:30 Eastern. Interesting graph showing that ~ 2,500 reported it as being down. Embarrassing and expensive to some customers.
https://downdetector.com/status/merrill-lynch/
We do NOT have any accounts at Merrill.
I made 14 trades today. Guess I’m lucky not to be a ML customer today.
RE: IBKR
Also worth a mention that IBKR gives you a fully functional monopoly money account with a million dollars. You can test drive all the features before you put in real money.
I still use the paper account, to try things I have not done before to be sure I understand how the platform will behave before I use real $.
I don’t know what other brokerages have something similar but I know that Vanguard doesn’t.
Bob – since you seem to be familiar with IBKR functionality, can you shed some light on their pricing? I have looked at the info on their website but I am confused.
The Trader Workstation system looks powerful and is one of the biggest draws for me but I am unsure if it’s worth what appears to be extra fees for some basics like real-time data, book depth, news etc. I use Fidelity and TOS now which don’t carry those extra charges. Aside from commission to trade stocks/bonds/equities, what additional monthly charges would one incur for getting some plain vanilla streaming info?
I am willing to pay something extra to be able to use their powerful TW system, I just don’t how much in additional fees/services I would have to subscribe to in order to get real time actionable data from it.
Kapios, for IB Pro, assuming you are not a professional investor, the minimum you will pay is $10/month. But that fee is waived if you make enough trades each month. If you want Level 2 data from different exchanges, that costs ~ $1/2 per exchange. If you want to buy bonds or CUSIP based preferreds, you have to pay $1/month. If you want bond/preferred ratings it will set you back $3/month. You can get a reasonable group of data for ~ $16 total, with $10 of it waived if you make enough trades.
You will have to fill out a questionnaire each year to certify you are not a professional money manager. That roughly means that you do NOT get paid for managing anyone else’s money.
Link to their ala carte pricing:
https://www1.interactivebrokers.com/en/index.php?f=14193
Tex, I had looked at their pricing maybe over a year ago now, and I recall that the minimums were waived if your account was above a certain size but I can not find that in their current pricing. Did they do away with that?
So, it looks like it would be less than $20 per non-active month, with some months being less than that, depending on trading? My trading tends to be lumpy – that’s why I’m trying to figure out what the “fixed” cost would be.
In reading thru the TWS online info it seems that there is a unit count of streaming info for tickers on watchlists/graphs etc. for which you pay for above a certain threshold. Is that right? If I’m watching a bunch of futures/options/equity tickers over the day across a couple of monitors over a 10 hour period does that add up? That’s what’s giving me pause.
Kapios, I think the fee waiver is based on how much trading commissions you generate each month, independent of account size. To get the $10 snapshot bundle fee waived you need $30/month in commissions. For stocks that would be about 6,000 shares. For bonds or $1,000 preferreds, that would be <= 30 bonds. (Since you never know exactly how much you will pay per bond trade, it could be less.)
The streaming fees are capped per month at low rates, $1.50 for NYSE, $1.50 for NASDAQ.
I have not heard of anyone that got charged an outrageous amount for any data on IB. So I think your guess of ~$20 in fees on a low trade volume month is a reasonable assumption.
Tex has replied and he has more details than I do.
I don’t pay for any data packages and I don’t use TWS. For what I do I don’t need them.
For my trading, I “coax” live bid/ask and volumes from the system by clicking on “new order” on an existing order. One click. Other information I pick up from other sources: FINRA, the TSX, etc. It is sufficient for my needs but perhaps not yours.
Tex has it right in that the pricing structure favors high balances and active trading. For Pro anyway. Lite is “free” for bread and butter things.
IBKR after a year + of experience …
Bottom line I like it and I’m keeping it. For some of what I want to do there is no reasonable alternative or no alternative. For you, it may or may not make sense.
The basics. 3 trading platforms, from least to most complex, 1) Portal, 2) WebTrader, and 3) Trader Workstation. Plus they have a separate mobile platform. I do all of my trading through WebTrader and only use Portal for administrative functions but it does have good trading functionality.
I have zero experience with Trader Workstation and have only used the mobile platform as a market monitor when I’m on the go and not for trading. My take is that 99% of III readers would be fine with either Portal or WebTrader as their trading platform.
2 pricing plans, Pro and Lite. Pro gives you a few more capabilities but not many. Pro charges commissions (albeit low), and gives you better margin rates and higher interest on cash balances. Lite gives you commission free trading on U.S. exchange listed stocks and ETFs and a thousand+ OEFs. You pay commissions on just about everything else (as with other brokers) but, again, rates are good. My sense is that Lite would serve the needs of 90% of III readers.
The bad. Very little from my perspective but this is my list:
The platforms are “quirky” compared to those of most other brokerages. Not a biggy for me but takes some getting used to the look and feel. Once you’re used to it, it’s great.
Telephone support is not their strength. Waits can be lengthy and the support person you reach may not be in the U.S. But they do know their stuff. I don’t know if the phone support gets better with a bigger account (as it does at Vanguard, for example).
Offsetting the weak telephone support is a robust online help system and a very responsive email inquiry system. The amount of online help is extraordinary and will answer just about any question you may have, other than account specific questions of course, for which I use the email system. You just have to look for it.
If you are the type that needs a lot of telephone support, IBKR is not for you.
No OTC trading. If it’s U.S. issues you’re buying on the OTC you won’t be able to buy them on IBKR (this includes new preferred trading on temporary OTC tickers). But if it’s foreign issues with “F” tickers you’re after, then you can buy them on their native exchanges, as described below.
And that’s it.
The good. A long list:
Access to trading markets. This is the key one for me. IBKR gives you DIRECT access to trade almost any major exchange in the world (and quite a few non-exchange products, too). London, Paris, Tokyo, Sydney, Toronto, whatever you want to trade. Like Vanguard’s extensive suite of Irish-based unit trusts? You can’t buy them at Vanguard (if you live in the U.S.) but you can buy them at IBKR.
For me, the initial attraction was the ability to trade Canadian preferred directly on the TSX. If you are at all serious about trading Canadian preferred you should be doing it through IBKR. You can buy 100% of the market, not just the 20% or so with U.S. OTC tickers. And you will have no problems with off-limit tickers (Vanguard, for example, will only trade about a quarter of the available tickers), no execution problems, and no foreign trading fees.
IBKR also gives you access to most Capital Securities, meaning bonds and preferred that are not exchange traded. Not by calling the bond desk, not at the bond dealers take-it-or-leave-it ask price, but at a limit price that you input online.
You like BK (Bank of New York Mellon) preferred? Well, you’re SOL because their one and only exchange traded issue has been called for December 20th. But they do have 5 non-exchange listed issues that can be bought through IBKR.
Easy currency and currency futures transactions. If you’re going to trade foreign securities you’ll want to buy foreign currency in most cases. IBKR makes it very easy and you get institutional rates on anything above US$25,000. Anything less is an “odd-lot” and may get you slightly less favorable rate. Even if what you want to do is just old-fashioned currency speculation, you can trade in and out at IBKR at very tight spreads and low commissions.
If you want to hedge currency exposure with currency futures, it’s also done on the trading platform and is very easy to do.
Execution. Never had a single execution issue.
Lots of online seminars and videos. Good if you are new to IBKR or new to some aspect of trading.
No tax treatment errors. Not on QDI issues, not on foreign securities, not one.
Ease of trading. Very fast to enter orders, especially repeat orders, as you might do buying an issue 100 shares at a time all day long. Many of the trading defaults (number of shares, warnings, etc.) can be custom set.
Outstanding statements. Incredibly detailed statements and the ability to customize just about any aspect of a statement.
Low margin rates. By far the lowest among retail brokers, but not as low as institutional brokers.
The trading platforms never crash. At least not when I’ve been on. Never slow; never down.
Strong “back office” on the platform. IBKR has all the usual administrative functions available online and few more that are rarely seen. One can convert from Pro to Lite (or vice versa) online.
You get notified when positions are about to go from short term to long term. Very useful feature for tax based trading (i.e. taking losses before they go long term, or waiting on gains until they do).
So, that’s my take. I have 2 IBKR accounts, using 1 for Canadian trading only (makes the book keeping easier for me) and a 2nd account for everything else. Both are Pro accounts but I’m planning to convert the everything else account to LITE soon as it will lower costs a bit. (Pro or Lite I would still pay commissions on the Canadian trades so there is no advantage to LITE there.) I’ve not transferred any positions from other brokerages to IBKR but as cash becomes available that’s where it’s going.
Very helpful, Bob… Thanks very much for posting.. I’ve been wondering about the buzz on IBKR and your summary pretty much seems to tell the story. Regarding bonds, when you say, “IBKR also gives you access to most Capital Securities, meaning bonds and preferred that are not exchange traded. Not by calling the bond desk, not at the bond dealers take-it-or-leave-it ask price, but at a limit price that you input online,” you’re saying you can set your own bid price or offered price on essentially any bond that’s being offered within their system? Can you do something like set a bid for 25k but with a minimum of 2k that you’d accept as an example? That’s one of my pet peeves with the Fidelity platform – you cannot set a minimum amount on either your bid or offer amount.
2wr – on the buy side you input whatever price you want, and quantity. Bids may be rejected as not being enough shares. I have been able to make buys for as few as 5 ($1,000) shares, so it’s not like you have to be trading institutional quantities.
I have only made 1 sale of a capital issue on IBKR and that was for 10 shares and it took a couple of days to execute all 10 because I had a high price on it. Beyond that I don’t know the rules on selling.
2WR, a few other points on IB’s bond platform:
1) You cannot set a minimum quantity. For example on a corporate bond where the minimum was set at the IPO time at 2 aka $2,000 face, you can get filled anywhere from 2 up to your order size.
2) The selling bond dealer might set a higher minimum quantity than was specified in the IPO. There are quite a few corporates that had 1 or 2 minimum specified at IPO, but the dealer specifies a minimum order size of 200 or 250. So IB requires the 200 or 250 to place the order.
3) You never know exactly what the commission will be until after the order is filled. The most extreme case is you get filled for one bond and pay a $8 commission, which is ~0.8%. For ~ 25 bonds, the commission is typically 0.1% to 0.15%. For >=100, the commission is typically 0.05%. The variable that you cannot control is who the selling dealer is. Each dealer seems to have a different commission schedule with IB.
4) You never know exactly what the margin percentage is if you are buying on margin. IB will show you what the margin percentage is when you first place the order. That percentage is only applicable to the quantity you ordered. This is more of an issue on munis than corporates. The higher the quantity you buy, the higher the margin percentage might be. It is complicated and IB does not publicly disclose the algorithm they use to calculate the margin requirement. In an extreme muni case, you might buy 5 bonds and have a 33% margin which increases to ~ 100% when you buy say 100. Part of IB’s calculation is what percentage of the issue you are buying. So if you buy a very small percentage of the float, your margin rate will be stable. This is less of an issue on large corporate offerings unless you are dealing with say >=$ 1 million order sizes. IB can and does change the margin requirements with minimal notice and you have no recourse. Broadly speaking they increased all corporate and muni margin rates since the March 2020 sell off. In an extreme case, you can get an electronic margin call where they automatically start selling positions WITHOUT your input before today’s close.
Not good, not bad, just a few quirks you should aware of before you get married.
Thanks for the added color, Tex….. It sounds to me as though there’s no advantage for bond trading at IBKR vs trading at Fidelity with the possible exception of it being easier to locate non-listed preferreds…. At Fidelity I do like knowing exactly what I’m going to be charged no matter what the size ($1/bond but I think there’s a minimum and I know there’s a maximum) but I do not like the inflexibility of setting a bid or offer amount…. I understand what you’re saying about IPO amounts but I’m talking about bidding (or offering) in the secondary… I want to be able to say, for example, I’m bidding for 50k on an issue, but if there’s a seller out there for say 11k only, that I will accept those 11 at my bid…. You can’t do that at Fidelity but if I understand you correctly, I can’t do that at IBKR either.
Let’s use an example: 857477AQ6
If you go to Vanguard, TDA or Schwab, it can’t be bought on the platform. You may be able to buy it by calling the bond desk, but you’ll be given a dealer ask price and it will be take-it-or-leave-it. And it’s effectively fill-or-kill; you can’t leave a bid.
AT IBKR I can buy it on the platform. It will show ask and quantity, bid and quantity, and last and quantity. If I check at FINRA I can see the whole trading history.
I then input any price and quantity I want. After that, it fills or doesn’t fill like any exchange traded issue. If you’re prepared to be patient you can get filled much close to the bid than the ask. Same as buying exchange listed preferred. You can’t specify a minimum quantity.
On this particular issue I expect I could buy it for about for at least 1% less at IBKR than at the bond desk at Vanguard. And without sitting on the phone for 30 minutes.
2WR, I will contrast Fidelity and IBKR for a 50 piece ($50,000 face) bond order in the secondary market:
1) Fidelity allows you to place a “fill or kill” or “day” order to buy for any bonds they are showing for sale. In general you are allowed to put in a lower bid price than the ask price. Fidelity has “bumpers” or “guard rails” that limit how far below the ask price you can go. If the ask price is 101, Fidelity requires your bid price to be ~>=97.3. If you put in a bid price > the ask price, Fidelity will NOT let the order be placed.
If your order is to buy 50 pieces, Fidelity makes the order minimum and maximum 50 pieces. So if someone wants to sell say 10 pieces at your bid price, the order will NOT be filled.
2) IB allows you to place a “Fill or Kill”, a “Day” or a “Good till Cancelled” buy order. This is a MAJOR difference compared to Fidelity, Schwab, etc where you CANNOT place a GTC bond order. IB lets you put in any bid price you want, regardless of the ask price. The risk is that you fat finger a buy price. Say there are 50 bonds offered at 101 and you want to enter a 99 bid, but type in 999. You just bought them at 101. So IB does NOT have bumpers like Fidelity.
If your buy order is for 50 pieces, IB will allow it to be filled at any quantity from the minimum up to 50. The minimum might be 1 or 2 for corporates and is typically 5 for munis. You never know for sure how many will get filled until the order goes through. On munis, it is common for IB to show 2X to 3X the bonds available than are real. If IB shows 30, there might be 10, 15 or 30 available. You don’t know until it gets filled. This is less of a problem on corporates.
IB in general will let you place corporate bond buy orders even if none are listed for sale. Fidelity will NOT let you do this. And since you can place a GTC order at IB, this is a difference. In general, IB will NOT let you place a muni bond buy order if none are showing for sale, which is the same as Fidelity.
Hope this helps.
Can I buy 857477AQ6 at Fidelity without picking up a phone?
Bob, I just tried the State Street Cusip you provided. Fidelity does not show any offered up and therefore will NOT let you place an order. IB shows 80 bid @ 99.244 and 200 ask @ 100.5. IB will let you enter an order for quantity of 1 on up. This issue might be on the Fidelity “forbidden, we have to save you from yourself” list which is why they don’t offer it you. Not sure.
This may not be the best day to be asking a question like that of Fidelity, Bob, at least not if everyone else is having the same problem I am experiencing…. When I attempt to find all bonds for a specific company name, system is telling me “System unavailable at this time. Please try again later or call Fidelity at 800-544-6666.” It would allow me to find your Cusip # 857477AQ6, but it does not show any inventory. That may be solely because of their “system unavailable” problem… Anyone else having the same problem??? I have not called the desk and will just wait to see if problem is resolve by tomorrow.
Tex – ty for the info. This is State Street we are talking about. A-rated debt, BBB-rated preferred. A Low risk non-bank bank. F2F, but then almost all institutional preferred are F2F. Agribank, Cobank and NTRS are the only higher rated preferred (all BBB+) in the banking world.
I’ll be interested to see if anyone finds it on Fidelity but I am 100% certain I can buy it at IBKR, at a price I name. Without a phone call. I used this one CUSIP as an example but there are hundreds in the same boat, meaning generally not available at most brokerages but readily available at IBKR.
Tell ’em Bob sent you, and I deserve a kickback!
Bob – I just noticed in the details of your State Street 857477AQ6 that it’s a floating rate issue….. That probably seals the deal of not ever being able to buy it online at Fidelity without having to call as their Nanny state mentality normally wants to save you from your own assumed inability to know what you’re buying if a bond floats.
2wr – then I’ll give you 2 others, both fixed rate bonds:
74348Y6V8 can’t be bought online at Vanguard or TDA, but at IBKR you can buy and name your own price.
21871NAA9 is buyable online at Vanguard at 83.00 (no choice) or at TDA at 82.41 (best price) or at IBKR at whatever you input. The bid/ask is 81.50/82.275, and last sale at 81.41. I’m guessing I could get it at 81.50, that being 1.50 under Vanguard or 0.91 under TDA.
It’s 5:37 right now and I see the Corecivic issue available at Fido @ 82.301 theoretically….. (you can’t buy afterhours) . No luck on the Prospect issue…
IB also lets you do OPG orders, which means in essence to execute as close to the market opening as possible (subject to your limit). In other words, they go to the front of the cue, ahead of day, fok, or gtc orders.
I have been using them on the equity side.
TDA Merger with Schwab.
Have an issue with FOREIGN TAX WITHHELD from a dividend of a Mexico based company (KCDMY) in my IRA. TDA withheld ~10-15% from this dividend payment for the first time after owning the stock for years.
Complained on email and got a computer generated response.
I’ve been a very long time customer of TDA and love the TOS platform but I fear I’ll not be happy with this merger.
Is anyone else having similar issues?
Dear valued client,
Received a reply (below) and sounds like I’ll be unable to appeal. Are others having similar experiences recently?
I’d be happy to explain.
We are not able to reverse this charge, because it is not charged by TD Ameritrade. It is a pass through fee, charged by the transfer agent who handles the dividends for that stock. A foreign tax withholding fee is charged at the discretion of the company, and will not necessarily be applied to every dividend. It may be applied for every diviend, or it may be applied only once a year.
Oh, yeah, they didn’t do what they could have done. They are supposed to tell the clearing agent after the record date how many shares are held by retirement accounts so they don’t get charged the foreign tax as the treaty allows for an exemption.
The system for brokers to do it is outlined here:
https://www.dtcc.com/-/media/Files/Downloads/Settlement-Asset-Services/EDL/Tax_Services_Guide.pdf
What you should ask them is whether this is a permanent change as a result of the merger, or a one-off.
I don’t know the answer but what you’re getting from TDA is not sufficient.
The answer lies in the US-Mexico tax convention. It is NOT at the discretion of the paying agent. If the convention says no withholding then it’s no withholding. But TDA won’t do the work for you. If you can show them there should be no withholding they will get the paying agent to back off.
I’ve been through exactly this issue with Vanguard albeit on a Canadian issue held in a Roth. Turns out the paying agent was JPM.
Greg, is this a case of your having benefited in the past from TDA not applying the rule correctly?
Having a refined hatred for Foreign Tax Withholding but not having direct experience w MX companies, I looked and found https://www2.deloitte.com/content/dam/Deloitte/us/Documents/Tax/us-tax-ice-country-highlights-mexico.pdf, which asserts that “A [Mexican] company that distributes dividends … to a nonresident or
to a resident individual must withhold a 10% tax….” So it may be that someone in the TDA back office finally started applying the rule correctly?
Also, is the holding in a taxable account? If so, you can claim it back at tax time (apologies in advance if you already knew that).