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How to use Interactive Brokers for your investing

Baptiste Wicht | Updated: |

(Disclosure: Some of the links below may be affiliate links)

Interactive Brokers is a great broker for Swiss investors, but it is not always the easiest broker to use. Some people struggle with some operations.

I have already discussed some operations like buying or selling, but many people ask how to check their dividends on Interactive Brokers, for instance. And people always want to know how to check their profits properly on IB. So, in this article, I will cover all the main operations we can do with Interactive Brokers, in the most simple way.

Buy an ETF or stock

Buying an ETF or a stock is the most common operation you will do on your IB account. If you already have some positions to buy, you can go from your main view and simply select the position you want to buy more of it. If you do not have it, you can search for it in the search bar.

Search for VT in Interactive Brokers
Search for VT in Interactive Brokers

For instance, here I searched for VT, my favorite ETF. And I selected the ARCA results because ARCA is the label for the New York Stock Exchange (NYSE) ARCA stock exchange. From there, you will be redirected to the main page of VT.

Interactive Brokers buy or sell VT
Interactive Brokers buy or sell VT

On this view, you can choose to buy (blue button) or sell (red button). This is the easiest way to start buying new shares of an ETF.

Create a buy order for VT on Interactive Brokers
Create a buy order for VT on Interactive Brokers

In my case, I have configured a market order for a single share. This is usually the only type of order I use. Then, you can either use Preview to see the fees and estimated final price or simply click Buy Order, and it will trigger the order for you. If you are doing a limit order, you could also use a longer duration than a day. The default duration is a day of trading, after which the order will be canceled if it has not been executed. But if you want to buy or sell at a given price, you can set an order for up to 90 days (Good-Till-Cancel).

Preview your order on Interactive Brokers
Preview your order on Interactive Brokers

In this case, the preview shows me my order and the fees I am going to pay (0.35 USD). Once you are ready, you can then submit the buy order or go back to change your order. If you submit your order during market hours, a market order will be instantly executed. Of course, if you have opted for a limit order, it will be executed based on your limit. And if you do it outside of market hours, it will be put on hold until the market opens.

Pending orders on Interactive Brokers
Pending orders on Interactive Brokers

If you have any trades pending, you can find them under Orders & Trades. There, you will see all orders submitted outside of market hours, like in this example. And you will also see all limit orders that have not yet executed.

If you need even more details, I have an entire article about buying an ETF on Interactive Brokers. And if you get information that you do not have enough settled cash, you may want to read how does cash settle with IB, to understand it better.

Sell an ETF or stock

If you already know how to buy a stock or an ETF, then you already know how to sell. The process is almost the same but in the other direction. Again, you should go into the position you want to sell either from your positions or from the search. And then, instead of using the blue button to buy, you can use the red button to sell.

Create a sell order on IB
Create a sell order on IB

The sell order ticket is very much like the buy order ticket. You can also select your order type and the time-in-force. If you know how to buy, you know how to sell on IB.

And once you have set up everything, you can again directly execute the order or preview. And the execution follows the same logic.

Fund your account

Regularly, we need to fund our account. In our case, this is something we do once a month, after receiving our salary and paying all our bills. This is simple to do on IB.

To fund your account, go into “Transfer & Pay” and then “Transfer Funds”.

Multiple transfer choices on IB
Multiple transfer choices on IB

You then have access to multiple options:

  • Deposit funds to fund your account.
  • Withdraw funds to get some money out of your account.
  • Internal Transfer if you have multiple accounts and want to transfer things between your accounts.

You can choose Deposit Funds in this case.

Deposit methods on IB
Deposit methods on IB

You will then have to pick a deposit method (a source of funds). If you have never created a deposit method, you can read my article about creating an IB account, it will guide you step-by-step for this process. Then, you can select the deposit method you want.

Declare a fund deposit on Interactive Brokers
Declare a fund deposit on Interactive Brokers

You can set the amount you want to deposit. You do not have to set up a transaction reference number, it is just for accounting, I have never set that. Furthermore, you can make it recurring if you transfer the same amount regularly.

Transfer instructions for Interactive Brokers
Transfer instructions for Interactive Brokers

Once you have set up everything, you will get transfer instruction. Make sure you follow the instructions exactly, especially for the message to the beneficiary. Otherwise, IB may not identify the transfer as being yours, and it will be returned.

Visualize your results

If you are investing in the stock market, you want your portfolio to grow. Therefore, you need to be able to see whether your portfolio goes in the proper direction. And Interactive Brokers can show you much information about your portfolio and your positions.

View your positions on Interactive Brokers
View your positions on Interactive Brokers

The main view is the Positions view. This shows all your positions one by one with their result. For each of your position, you will see the Daily P&L and the Unrealized P&L. P&L means profits and losses. The Daily P&L shows how much you got or lost in a day. In my example, the position lost 5.29 USD in a day. And the Unrealized P&L is your total profit (or loss) on this position. In this case, if I had sold VT today, I would have gained 680 USD.

At the top of the view, you will also see the overall results. It is essential to note that this overall result will be shown in your default currency (CHF). For instance, the daily loss is 4.50 CHF.

Performance chart on IB
Performance chart on IB

If you want a graphical view, you can opt for the Performance. It will show you performance over time with your portfolio and the same overall results that we saw before. You can also see your asset allocation and performance by sector and industry. Since this portfolio only has VT, these bottom charts are not fascinating, but they could be good if you have a portfolio of single stocks or multiple ETFs.

Chart of VT on Interactive Brokers
Chart of VT on Interactive Brokers

If you click any position on your portfolio, you will also be able to see more details about the performance of a position. The gray line is the 0% below, so the starting point of the graph, delimiting profit and loss. The blue is your average buying price. And the green line is the current price. In this example, the stock did 22.47% by jumping from 99.81 USD to 118.20 USD.

Overall, you should be able to find all the information you need about the performance of your positions on Interactive Brokers.

Generate a report for your taxes

Once a year, you will have to pay taxes. And for this, you will need a statement to join to your taxes for the tax office to verify your tax declaration. For my Swiss taxes, I always generate an activity statement for the entire year. This report is huge but contains everything the tax office needs:

  • All dividends and withholding taxes
  • All operations (buy and sell)
  • All the position values at the beginning and end of the year

To generate it, you can go into “Performance & Reports” and then Statements.

Types of statements on IB
Types of statements on IB

You can then choose Activity, which the complete list.

Generate an activity statement for taxes on IB
Generate an activity statement for taxes on IB

For the tax office, you will need an annual activity statement of the previous year. You can pick the language based on the language of your canton. And you can then download the PDF and join it to your taxes.

If you have a keen eye, you will see that there are also some tax reports you can generate. Unfortunately, these reports are really made for US citizens. They do not work well with Swiss taxes. This is why we use activity statements for our Swiss taxes.

Track your dividends

Some people like to track their dividends. Again, this is easily done in Interactive Brokers.

The first thing you can do is check if you have received any recent dividend on a position. For that, you can go into your portfolio and click on any position. There, you will find your transaction history and this will contain all your operations and all the dividends received.

The dividend history on Interactive Brokers
The dividend history on Interactive Brokers

In this example, you can see two dividend payments. If you want more detail, you can click on the link and this will allow you to generate an activity statement for a given time frame (a month for instance).

Generate an activity statement on Interactive Brokers
Generate an activity statement on Interactive Brokers

Once you have configured the activity statement, you can choose the format (all formats contain the same data). And then, you will find more information about the dividends in this report.

Dividends on activity statement
Dividends on activity statement

Here, you can see the dividends received, and the withholding applied to these dividends. In this case, since it is a US ETF, we should get 15% tax withholding only. If you get 30% withholding, you should go back to optimize your IB account.

Finally, there is one more interesting you can do about your dividends with Interactive Brokers. You can project the future returns for the year. For that, you need to open the Portfolio Analyst. You can find it in the menu under “Performance & Reports”. Then, you can expand the Projected Income section.

See your projected dividends on Interactive Brokers
See your projected dividends on Interactive Brokers

In this particular case, we can see that VT pays dividends four times a year and there should be two distributions left, for a total of about 36.26 USD. Of course, this is only a projection and things can change (for better or worse). But this can be useful if you want to get an idea of how much you will get regularly in dividends.

Rebalance your portfolio

If you have multiple positions in your portfolio, you may have to rebalance your portfolio. It is not difficult to do on Interactive Brokers, but there is unfortunately no way to do it trivially on the web interface. If you are using the desktop TWS interface, you can use the Rebalance Portfolio feature.

If you use the web interface like most people, you can use simple math to rebalance your portfolio to tell you what to do and do simple buy and sell operations. For instance, if you have three ETFs (70%, 20% and 10%) and 120’000 CHF, but they are out of balance, you can balance them by computing how much you should sell or buy:

  1. A should be at 84’000 CHF (70% of 120’000 CHF) but is currently at 100’000 CHF
    1. You should sell for 16’000 CHF
  2. B should be at 24’000 CHF (20% of 120’000 CHF) but is currently at 15’000 CHF
    1. You should buy for 9’000 CHF
  3. C should be at 12’000 CHF (10% of 120’000 CHF) but is currently at 5’000 CHF
    1. You should buy for 7’000 CHF

Once you have the operations you need to do, you can simply do the three operations and your portfolio will be balanced. Of course, by buying entire shares, your portfolio may not be entirely balanced, but this is not a big issue.

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These are the main operations a simple investor would have to do on Interactive Brokers. Once you have done them a few times, they are simple to redo. I rarely spend more than a few minutes each month on my IB account. However, when you are starting up, some of the interface can be intimidating.

With this article, I hope you have a better idea of how to do these basic operations on your account. If you have not yet started, I have an article to help you create and optimize your Interactive Brokers account.

Of course, there are many other things you can do on IB. But if you are a simple investor like me, you are unlikely to need any other feature. For instance, I have never checked the research available for each stock since I invest passively.

Is there any operation I forgot that you would like me to explain?

Recommended reading

Photo of Baptiste Wicht
Baptiste Wicht started The Poor Swiss in 2017. He realized that he was falling into the trap of lifestyle inflation. He decided to cut his expenses and increase his income. Since 2019, he has been saving more than 50% of his income every year. He made it a goal to reach Financial Independence and help Swiss people with their finances.
Discover Swiss Financial Secrets That Maximize Your Money!

Learn easy ways to optimize your finances and save thousands in Switzerland with our exclusive e-book. Learn about the most cost-effective financial services tailored for savvy residents and expats!

Get Your FREE Swiss Money-Saving Guide

29 thoughts on “How to use Interactive Brokers for your investing”

  1. The answer is surely somewhere but I can’t find it anymore. If I have an IB account in CHF, and I transfer USD or EUR to it, will it open a balance in USD or EUR too? Or do I have to open a balance in the other currencies I want manually myself?

    1. Hi Stephanie

      You need to declare the deposit in USD or EUR (like any deposit you do at IB). As soon as the money will be received, this will indeed open a balance. You never have to manually open any balance at IB.

  2. Hi Baptiste, thanks for the great info as usual. Question: is it possible for a Swiss citizen like me to keep shares in VT/VTI ETFs in Interactive Brokers if I have to leave Switzerland to live somewhere else outside Europe? I couldn’t find clarity on this anywhere, which has kept me from investing in stocks (I usually move my main address out of country every few years due to my job).

    I’m afraid of investing in stocks and then be forced to sell them low during a bear market if the broker doesn’t support the country I’m moving into.

    Would be an option to transfer shares to another broker?

    Any advice or lead would be greatly appreciated!
    Merci!

    1. Hi Eric,

      Normally it should be possible yes. In some cases, you will not be able to buy more of these shares but you should not be forced to sell. And the rules are likely the same for each broker.
      IB supports many countries, but maybe not all. So when planning your leaving, you may have to transfer your shares indeed. And you will have to research the country you are leaving to to see whether you can continue to invest like this.
      But until you know to which country you are going, there is no need to worry.

      1. Then, I think I’ll jump in ASAP.. “Time in the market beats timing the market” they say. Keep up the great work! Thanks!

      1. Whats your opinion about that? Isnt a a safety issue for clients? I always thought that all reputable brokers would use segregated accounts in these days.

      2. In the US, most brokers are using omnibus accounts and in Switzerland, they are all using segregated accounts. Swiss brokers would likely use omnibus accounts as well if they could but I think that FINMA enforces it.

        I don’t think it’s more risky than segregated accounts. As long as the broker is reputable and in good financial situation, this should be fine. These brokers are regulated and the SEC will intervene to help customers recover their money.

  3. Thank you for the great article! I’ve been seeing a few articles saying that the US economy and US dollars can go into a crisis, and that the VOO is overpriced. What do you think about it?

    1. The economy can always go into a crisis. But I cannot predict anything about it, so I keep investing. Over the long term, I believe this is the simplest and smartest strategy for most investors.

  4. Thank you for the great article! There is something not entirely clear to me: Analyzing the Unrealized P&L (in CHF), I observe that when subtracting it from my net asset value (NAV), I end up with a number lower than my total deposits & withdrawals (in CHF). However, shouldn’t the Unrealized P&L be exactly the amount of money I gain/loose compared to my total investment (total deposits &withdrawals)?

      1. Thank you! No, I have never sold anything on IB and only bought VT so far, and the difference between the described quantities is quiet significant. Is it the same in your case?

  5. I’ve found that buying using the Adaptive Algo worked well. I always ended up buying for cheaper than the limit I had set.

    A brief explanation is available here: /en/trading/orders/adaptive-algo.php

    It works on mobile as well.

    1. Thanks for sharing, John. These kinds of algorithms are really cool. I guess if you trade frequently, it can make a big difference. But if you trade once a month, I am not sure saving a few cents per share makes any difference.

  6. Informative as always. I am currently using TrueWealth, Finpension Invest and Findependant to handle as well as IB to handle my investings. IB is always a bit intimidating and so I hesitate a bit. But with this it should hopefully make it easier.
    One question – You always mention to convert CHF to USD to buy VT ARCA. But IB does not stop me if I dont convert CHF to USD and the buy went through.

    1. Hi,
      In think they introduced the automatic conversion from ChF into USD sometime in august or september 2024. I personally enjoy the function.
      Regards,
      Zoltán

    2. Many thanks for the excellent guide! I also have a somewhat related question about currency conversion in IB: is it possible to set up an automatic currency conversion (e.g. CHF -> USD) on a recurring basis (e.g. monthly) so that multiple currency conversions aren’t necessary if you want to schedule the purchase of multiple US-based ETFs on a recurring (e.g. monthly) basis?

      1. Is it possible to use the automatic currency conversion in a margin account as well?
        I thought this is a function that only cash accounts offer.

    3. Thanks!

      In May, they have introduced automatic currency exchanges. And the good thing is that these exchanges are cheaper than manual exchanges if you convert less than 6500 CHF. So, unless you are converting large amounts, you should let IB convert it automatically.

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