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  #21  
Old 12.09.2017, 10:48
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Re: Online trading in Swizerland

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That comparison's a total joke. What's the point in comparing among the most expensive options in the world?
Well I guess it's only comparing Switzerland but I get your point.

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Depends on what exactly did you buy and where it can be traded. Did you buy some of postfinance's own funds? Then you're probably locked to their platform and you have sell them first though PF. Vanilla stocks and ETFs freely tradeable on a major exchange can be transferred to a different broker, but there may be some fees for this service.
I bought 5k of a tech company shares on SIX, so I guess then it should transferable.

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Many good options, customer is king in US, not a victim, but a big advantage of IB for swiss investors is in cheap FX.
Ok good to know, I think this is looking like the best option so far then. Wish I had seen that earlier or researched for a little longer, doh.
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  #22  
Old 12.09.2017, 21:07
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Re: Online trading in Swizerland

So I get it that IB is the cheapest. But are there any other American brokers, which could have an advantage over IB? I'm talking about the following criteria:
  • buy and hold for many years to come
  • building up a retirement portfolio in a single place
  • starting with 100k, retiring with over 1 million
  • only casual trades, once a month or once a quarter
  • a stable broker which does not do risky stuff
  • European-friendly
  • focus on security
  • focus on passive individual investors, not active professional traders

Does anyone of you have experience with IB, Schwab, TD Ameritrade (others?) and know how they compare?
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  #23  
Old 13.09.2017, 13:52
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Re: Online trading in Swizerland

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So I get it that IB is the cheapest. But are there any other American brokers, which could have an advantage over IB? I'm talking about the following criteria:
  • buy and hold for many years to come
  • building up a retirement portfolio in a single place
  • starting with 100k, retiring with over 1 million
  • only casual trades, once a month or once a quarter
  • a stable broker which does not do risky stuff
  • European-friendly
  • focus on security
  • focus on passive individual investors, not active professional traders

Does anyone of you have experience with IB, Schwab, TD Ameritrade (others?) and know how they compare?
I have no experience with any of them but I see that Fidelity and TD Ameritrade come top of just about every list I have seen for example here https://www.stockbrokers.com/guides/...-stock-brokers

I was just about to sign up to IB but it really looks over-complicated for my needs. I put in my experience level as "limited" and got an error message saying "your skill level is not sufficient to open an account". That says it all for how much of a learning curve there will be, and though it may not be rocket science, TD Ameritrade and Fidelity look far more accessible to the infrequent user.
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  #24  
Old 13.09.2017, 14:03
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Re: Online trading in Swizerland

Yeah that's what I meant. In rankings like this one, TD Ameritrade, Fidelity and Schwab come on top, but on English Forum Interactive Brokers is king, because it has the lowest cost. The thing is, paying 10 or 20 dollars per year is not a big difference to me.

I would not demonize IB, I tried their Web Trader demo and it looks fairly simple. You just put in the ticker: VTI, VT etc. and buy. That's it.

But I'm trying to look in the perspective of many years. Where will my "nest egg" be the safest and where will I have the least trouble. IB is suited for active traders, it does almost definitely lose money on passive investors like us, who only contribute a couple of dollars per year, even if they make a trade of 100'000, that's nothing.

But maybe that's all you need, just a uber cheap platform for pros, of which you will use 0.1% what it offers.
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  #25  
Old 13.09.2017, 14:13
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Re: Online trading in Swizerland

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Yeah that's what I meant. In rankings like this one, TD Ameritrade, Fidelity and Schwab come on top, but on English Forum Interactive Brokers is king, because it has the lowest cost. The thing is, paying 10 or 20 dollars per year is not a big difference to me.

I would not demonize IB, I tried their Web Trader demo and it looks fairly simple. You just put in the ticker: VTI, VT etc. and buy. That's it.

But I'm trying to look in the perspective of many years. Where will my "nest egg" be the safest and where will I have the least trouble. IB is suited for active traders, it does almost definitely lose money on passive investors like us, who only contribute a couple of dollars per year, even if they make a trade of 100'000, that's nothing.

But maybe that's all you need, just a uber cheap platform for pros, of which you will use 0.1% what it offers.
I know what you mean. I plan on trading maybe 20k or so a year with a view to long-term growth, and as you say a small marginal difference in fees is not a huge reason to use a more complex system. But if as you say IB isn't too bad for transfers of CHF to USD then it could still be worth it.

Sadly there isn't a comparison of those kinds of costs for each platform.
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  #26  
Old 13.09.2017, 18:46
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Re: Online trading in Swizerland

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Go with a discount american broker (Schwab, IB, and so on) and the costs will be negligible even if you buy and hold for a single day!! You also forgot currency conversion fees, which easily amount to 1-2% with swiss brokers. And higher dividend withholding taxes: 30% "thanks for choosing swiss" instead of normal 15% on american stocks.
The 15% difference on 0-5% dividend return that you get paid out with delay amounts to, on average, some 0,5%. It's not lost, just delayed payout.

There's much more to "good choice" than cost alone. Yes IB may well be cheapest but that need not make it the best choice, there are other criteria.

You can easily go "overkill" on cost especially if they're one-time like some minor tax upon purchase and sell. Particularly when they're bought to hold for a very long time.
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Btw, if you didn't know, swiss deposit protection doesn't cover securities...
Completely irrelevant.

Contrary to cash, which is a credit to your broker/bank that is of course subject to creditor risk and severerly hit by the bank's/broker's bankruptcy, your securities remain your property while they're deposited with your broker/bank. Consequently they're not affected by the broker going broke.
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Old 13.09.2017, 19:22
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Re: Online trading in Swizerland

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Completely irrelevant.

Contrary to cash, which is a credit to your broker/bank that is of course subject to creditor risk and severerly hit by the bank's/broker's bankruptcy, your securities remain your property while they're deposited with your broker/bank. Consequently they're not affected by the broker going broke.
Except if they decide to sell off all this property of yours that you entrusted them to cover up own bankruptcy. The fact that it'd be criminal for them to do so doesn't quite guarantee you'll get your money back

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The 15% difference on 0-5% dividend return that you get paid out with delay amounts to, on average, some 0,5%. It's not lost, just delayed payout.
Not nice either way and what if you're taxed at source only with no right to file tax return...

Last edited by ivank; 13.09.2017 at 19:42.
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  #28  
Old 13.09.2017, 19:59
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Re: Online trading in Swizerland

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So I get it that IB is the cheapest. But are there any other American brokers, which could have an advantage over IB? I'm talking about the following criteria:
  • buy and hold for many years to come
  • building up a retirement portfolio in a single place
  • starting with 100k, retiring with over 1 million
  • only casual trades, once a month or once a quarter
  • a stable broker which does not do risky stuff
  • European-friendly
  • focus on security
  • focus on passive individual investors, not active professional traders

Does anyone of you have experience with IB, Schwab, TD Ameritrade (others?) and know how they compare?
Schwab & TD Ameritrade work well, Schwab has the advantage of a USA cheque book plus Visa cars, TDA stopped such things for foreign clients a few years ago.
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  #29  
Old 13.09.2017, 20:01
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Re: Online trading in Swizerland

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And higher dividend withholding taxes: 30% "thanks for choosing swiss" instead of normal 15% on american stocks.
Excuse me, but that's not 100% true. First of all, the WTAX does not depend on the broker, but on the ETF. From what I've learned it's like this:

- With American ETFs, if you fill the W8BEN, you pay 15% WTAX. Then if you fill the Swiss DA-1, your dividend income will be deducted from your Swiss income, so you will pay less taxes. So in the end you may even end up with 0%, right?

- With Irish ETFs that hold American stocks, the 15% WTAX is paid by the ETF and results in a lower dividend. On the dividend itself, you don't pay any direct tax. I guess, end of year, you may need to declare the dividends in your tax statement as income and get taxed on them?

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There's much more to "good choice" than cost alone. Yes IB may well be cheapest but that need not make it the best choice, there are other criteria.

You can easily go "overkill" on cost especially if they're one-time like some minor tax upon purchase and sell. Particularly when they're bought to hold for a very long time.
That's the point. So what broker would you recommend? What other factors are there than price?

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Except if they decide to sell off all this property of yours that you entrusted them to cover up own bankruptcy. The fact that it'd be criminal for them to do so doesn't quite guarantee you'll get your money back
And in the US, you have the SIPC, which protects you up to 500'000. Does it cover IB UK clients? If the broker goes bust, even without criminal intent, what happens to your securities held by the broker, if you have more than 500'000?
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  #30  
Old 13.09.2017, 20:04
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Re: Online trading in Swizerland

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Schwab & TD Ameritrade work well, Schwab has the advantage of a USA cheque book plus Visa cars, TDA stopped such things for foreign clients a few years ago.
And do they also have cheap fx and bank account connected to Swiss banking system, so that you don't have to make SWIFT transfers? For a buy and hold european, which one would you eventually recommend and why? (IB, TDA, Schwab)
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  #31  
Old 13.09.2017, 20:14
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Re: Online trading in Swizerland

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Excuse me, but that's not 100% true. First of all, the WTAX does not depend on the broker, but on the ETF.
It does. Swiss brokers are obliged to withhold 15% extra on american securities for ESTV, in addition to Uncle Sam's own cut of 15%. Non Qualified Intermediary brokers would be hit by 30% all from US side, and you'd have to get in touch with IRS if you want some back
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Old 13.09.2017, 21:08
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Re: Online trading in Swizerland

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And do they also have cheap fx and bank account connected to Swiss banking system, so that you don't have to make SWIFT transfers? For a buy and hold european, which one would you eventually recommend and why? (IB, TDA, Schwab)
Schwab have an account in ZH for depositing CHF, arrives same day. Not used them for FX, it's not obviously on offer although transfers out can be done in foreign currencies. As I mainly invest in USD it's not an issue.
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Old 13.09.2017, 21:19
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Re: Online trading in Swizerland

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Schwab have an account in ZH for depositing CHF, arrives same day. Not used them for FX, it's not obviously on offer although transfers out can be done in foreign currencies. As I mainly invest in USD it's not an issue.
But if you deposit CHF and buy in USD, you need to convert between these currencies. You don't know the conditions? Would you consider Schwab to have any advantages over IB? What about Schwab's own ETFs?
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Old 13.09.2017, 21:36
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Re: Online trading in Swizerland

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So I get it that IB is the cheapest. But are there any other American brokers, which could have an advantage over IB? I'm talking about the following criteria:
  • buy and hold for many years to come
  • building up a retirement portfolio in a single place
  • starting with 100k, retiring with over 1 million
  • only casual trades, once a month or once a quarter
  • a stable broker which does not do risky stuff
  • European-friendly
  • focus on security
  • focus on passive individual investors, not active professional traders

Does anyone of you have experience with IB, Schwab, TD Ameritrade (others?) and know how they compare?
I use IB, two of my friends are using Schwab & TD Ameritade. IB offers access to more products (for example commodity futures) and it is more technical. The others are for simple trades like stocks & ETFs.
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Old 13.09.2017, 21:39
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Re: Online trading in Swizerland

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But if you deposit CHF and buy in USD, you need to convert between these currencies. You don't know the conditions? Would you consider Schwab to have any advantages over IB? What about Schwab's own ETFs?
You don't need to convert your CHF if you don't want to.

IB gives you a loan (I think) in USD to buy the USD securities. It is usually very easy for the user. Financing rates are posted on their website.
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  #36  
Old 13.09.2017, 22:34
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Re: Online trading in Swizerland

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You don't need to convert your CHF if you don't want to.

IB gives you a loan (I think) in USD to buy the USD securities. It is usually very easy for the user. Financing rates are posted on their website.
A loan? That's sounds much worse than a currency conversion. How would that work? A USD loan backed by CHF cash? I think Im missing something here. Obviously the logical way would be to transfer CHF, exchange them to USD and then buy shares.
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  #37  
Old 14.09.2017, 08:28
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Re: Online trading in Swizerland

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You don't need to convert your CHF if you don't want to.

IB gives you a loan (I think) in USD to buy the USD securities. It is usually very easy for the user. Financing rates are posted on their website.
I saw that on TD Ameritrade too but screw that... would much rather use my own cash than add yet another potential complication if things go belly up.
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Old 14.09.2017, 20:21
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Re: Online trading in Swizerland

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A loan? That's sounds much worse than a currency conversion. How would that work? A USD loan backed by CHF cash? I think Im missing something here. Obviously the logical way would be to transfer CHF, exchange them to USD and then buy shares.
It is automatic. For example say you deposit 100k CHF and you buy 80k CHF ETFs in USD denomination. Then your portfolio should read like 20k CHF cash and ~80k USD ETF (assuming exchange rate is 1 to 1). I suspect every day you will have a financing charge in your statement for the 80k CHF. All financing & deposit rates are posted on their website. It is super transparent.

I haven't done it myself since I decided to deposit the currency of the securities I need to buy (EUR in my case) so I can avoid FX and other costs. Hence, I am not 100% sure but that's the way they do it in banking. Worse? Not really because it gives you flexibility at a tiny cost. And everything is documented. You can convert your CHF to USD with just 2-3 clicks (before buying the security) if you wish to keep things simple.

Update: I actually google it and it works the way I describe it. If you keep a position only in the day there is no financing charge.
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  #39  
Old 14.09.2017, 22:34
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Re: Online trading in Swizerland

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It is automatic. For example say you deposit 100k CHF and you buy 80k CHF ETFs in USD denomination. Then your portfolio should read like 20k CHF cash and ~80k USD ETF (assuming exchange rate is 1 to 1). I suspect every day you will have a financing charge in your statement for the 80k CHF. All financing & deposit rates are posted on their website. It is super transparent.
Unless you have an idea of where currency exhange rates are heading and willing to bet on it, this is a dumb way to lose 2+ % of alpha. IB's USD margin interest is 2.66% at the moment, and keeping above 100k+ CHF cash costs you another 1%!

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I haven't done it myself since I decided to deposit the currency of the securities I need to buy (EUR in my case) so I can avoid FX and other costs.
These costs neglible with IB, that's one of their biggest advantages - you pay just a couple of bucks to convert 100k anytime at a fair market rate without any markups. Whereas a typical bank and probably schwab would pocket about 500-1500 CHF in spread to do a similar conversion
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Old 15.09.2017, 02:07
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Re: Online trading in Swizerland

Agreed. It is better to convert CHF to USD on IB before buying any security. Plus USD cash balance is yielding some interest now (>10k).
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