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UK Retail Investors

Hi

In the UK new regulation has come in (PRIIPS) which means that investors classified as retail cannot purchase US based ETFs that don't have a Key Information Document (KID). As most US ETFs don't have KIDs it means that european investors are unable to purchase any US ETFs. Is it possible to use QC to buy assets not listed on a US stock exchange?

Thanks

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


How do I trade CFDs on Interactive Brokers through QC?

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Since the regulation only applies to US ETF's, it is possible to trade all US stocks and securities on Oanda, FXCM and GDAX through QuantConnect. With regards to trading CFDs, QuantConnect provides trading CFDs on Oanda.  

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I stopped among others for this trading. I was thinking brexit might help as the are not eu.

At interactive brokers they do not allow European citizen to trade non translated tickers. There are far less liquid - too short living for backrests - alternatives. The spy is not possible. How to trade these "TQQQ", "UBT", "UST", "TVI"?

Does oanda not consider you are from Europe? Traders from Europe,  can you help me?

 

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Hi Quant Trader,

Oanda does consider if their clients are from Europe. We can see on their signup page that they require users to enter their country/region. For more information on Oanada, I recommend utilizing their Contact Us page to discuss with them directly.

Best,
Derek Melchin

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


I understand i need to ask Oanda. Oanda has a nasty chatbot which i cannot pass..

Can oanda trade for instance TQQQ", "UBT", "UST", "TVI"? Maybe a EU retail trader know or somebody who coverted to professional trading.

 

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A possible solution for this is using option substitution for those symbols, altough it is difficult to obtain exactly the same results. The ETFs are forbidden, options on these assets are not. I am actively looking at this problem, looking to replicate beta through ETFs without access to the ETF...

Do not expect any reputable broker to allow the purchase of US ETF to European residents, that will constitute a crime.

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Hi Hector and Quant Trader,

Just to clarify, if we can't trade an ETF, then we can't trade options on that ETF.  Option assignment can't be completed with trading the underlying.

Best,
Derek Melchin

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


Hello Derek, are you referring to a limitation on Lean? There is no limitation in Europe to purchasing call options on ETFs that cannot be purchased due to PRIIPS,  Interactive Brokers (for example, other EU based brokers should behave similarly) will tell you that you are not allowed to purchase the ETF but will permit the purchase of the call option if you qualify for US options trading, and you do not have to be necessarily a professional to do this. 

Using options could be a way to gain exposure to certain ETFs, being US treasury bonds exposure one of the most interesting for European investors/hedging. The difficulty lies in selecting options that will track the ETF properly, and even so investors have to accept slightly higher costs. It is a legislation that protects a segment of the population and restricts another segment.

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Hi Hector,

At the moment, Lean needs the underlying to get the margin requirements to open a position.

Best,
Derek Melchin

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


At interactive brokers you need professional account which means:

  • At least 1 year working at a finance company
  • At least 100k of trades/ trade size in last quarter
  • At least 500k of own money and/ or capital to trade.
This depends on broker. First I have not, second neither as that is not my strategy. Third is not what I want to trade with algos in 1 account. So curious how this goes. Banks and investments firms are happy with this regulations as they can sell their products. European customers can still trade risky or not liquid products when they have a translation.
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IB provide CFDs on most etfs. These are tradeable in the EU as they have KIIDs. However, the downside is the higher financing cost compared to physical etfs. If QC were to allow CFD trading on IB, it would mean that EU investors could get access to US ETFs. Hopefuly this could be something that is easily implemented into QC.

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Hi Flame,

Thank you for the suggestion. We've added this to our to-do list.

Best,
Derek Melchin

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


I support Flame´s suggestion, I would greatly increase our options in the EU.

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Thanks for adding to the development list Derek!

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I have a professional account now. Lets see if I can start trading there again.

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The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory services by QuantConnect. In addition, the material offers no opinion with respect to the suitability of any security or specific investment. QuantConnect makes no guarantees as to the accuracy or completeness of the views expressed in the website. The views are subject to change, and may have become unreliable for various reasons, including changes in market conditions or economic circumstances. All investments involve risk, including loss of principal. You should consult with an investment professional before making any investment decisions.


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