Interactive Brokers won't let me buy UPRO (can't do HFEA?)

For investors outside the US. Personal investments, personal finance, investing news and theory.
Sister forums: Canada, Spain (en español)
---------------
Post Reply
Topic Author
mvb1234
Posts: 4
Joined: Fri Jan 07, 2022 6:21 pm

Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by mvb1234 »

I did the CLP training and aswered the questions today.
However, I still get the following message:

"BUY [X] UPRO ARCA" No Trading Permission, Customer Ineligible; Ineligibility reasons: This product is currently unavailable to clients classified as retail clients. Note: Individual clients and entities that are not large institutions generally are classified as retail clients. There may be other products with similar economic characteristics that are available for you to trade. See: https://ibkr.info/article/3203 Your account is eligible to upgrade to margin account.

I'm based in the UK.
Is there any way to get permission to buy UPRO so that I can do HFEA via Interactive Brokers?
Last edited by mvb1234 on Mon Jan 10, 2022 5:05 pm, edited 1 time in total.
Ramjet
Posts: 1346
Joined: Thu Feb 06, 2020 11:45 am
Location: Ohio

Re: Interactive Brokers won't let me buy UPRO

Post by Ramjet »

Not sure about IB, many use M1 Finance for HFEA
VT & HFEA
Topic Author
mvb1234
Posts: 4
Joined: Fri Jan 07, 2022 6:21 pm

Re: Interactive Brokers won't let me buy UPRO

Post by mvb1234 »

Did anybody manage to do this via Interactive Brokers?
Kanto
Posts: 21
Joined: Wed Aug 12, 2020 12:53 am

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by Kanto »

Upgrade your account permission as they state in the message.
koinos_bios
Posts: 2
Joined: Wed Jan 12, 2022 8:27 am

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by koinos_bios »

Why not just call them?
typical.investor
Posts: 3034
Joined: Mon Jun 11, 2018 3:17 am

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by typical.investor »

mvb1234 wrote: Mon Jan 10, 2022 10:16 am I did the CLP training and aswered the questions today.
However, I still get the following message:

"BUY [X] UPRO ARCA" No Trading Permission, Customer Ineligible; Ineligibility reasons: This product is currently unavailable to clients classified as retail clients. Note: Individual clients and entities that are not large institutions generally are classified as retail clients. There may be other products with similar economic characteristics that are available for you to trade. See: https://ibkr.info/article/3203 Your account is eligible to upgrade to margin account.

I'm based in the UK.
Is there any way to get permission to buy UPRO so that I can do HFEA via Interactive Brokers?
Ok, just to check I went through the process. After you completed the training, did you scroll to the bottom and select continue. I had to change a few things like remove "preservation of capital" as one of my goals and add gains from speculation. Now it is pending apporoval. Go back and try to add permissions again. Does it show pending?
typical.investor
Posts: 3034
Joined: Mon Jun 11, 2018 3:17 am

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by typical.investor »

I am approved now. I suspect you didn’t finish the process. Just a guess.
DarkMatter731
Posts: 63
Joined: Sat Apr 25, 2020 8:28 am

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by DarkMatter731 »

mvb1234 wrote: Mon Jan 10, 2022 10:16 am I did the CLP training and aswered the questions today.
However, I still get the following message:

"BUY [X] UPRO ARCA" No Trading Permission, Customer Ineligible; Ineligibility reasons: This product is currently unavailable to clients classified as retail clients. Note: Individual clients and entities that are not large institutions generally are classified as retail clients. There may be other products with similar economic characteristics that are available for you to trade. See: https://ibkr.info/article/3203 Your account is eligible to upgrade to margin account.

I'm based in the UK.
Is there any way to get permission to buy UPRO so that I can do HFEA via Interactive Brokers?
That's because retail investors cannot buy UPRO - it's a US-based ETF with no KIID document. EU legislation that the UK has continued to uphold so brokers really shouldn't be able to provide a place for retail investors to purchase it.

The fact that you didn't research this or know this suggests that you should probably stay away from UPRO.

If you really want to invest in UPRO using IB, you just have to have £500,000 in your account and make 40 or so trades a year.

I'm UK-based myself but I tend to use futures over leveraged ETFs because it's far cheaper to hold. I have Interactive Brokers as well.
Last edited by DarkMatter731 on Sat Jan 15, 2022 11:07 am, edited 1 time in total.
TedSwippet
Posts: 4037
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by TedSwippet »

DarkMatter731 wrote: Sat Jan 15, 2022 8:34 am That's because it's against the law to hold UPRO in the UK - it's a US-based ETF with no KIID document. EU legislation that the UK has continued to uphold.
A couple of small but potentially important corrections here.

Firstly, it is not "against the law" for UK or EU investors to hold UPRO or anything else that lacks a KIID. What the PRIIPs regulation does is prevent a broker covered by this regulation from offering or selling an ETF or other "complex" financial product that lacks a suitable KIID to UK or EU based investors. That doesn't mean you cannot hold these investments, though. For example, if you hold one from before becoming a UK or EU resident, that would be entirely fine. Or, if you find an alternative route to buying them.

Secondly, it only applies to retail investors. I'm not an Interactive Brokers customer, but presumably(?) the function of Interactive Brokers' CLP (Complex and Leveraged Products) account configuration, undertaken by the topic author, is a route to avoiding PRIIPs restrictions on "retail" investors.

More detail on PRIIPS here: PRIIPs Regulation | FCA
DarkMatter731
Posts: 63
Joined: Sat Apr 25, 2020 8:28 am

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by DarkMatter731 »

TedSwippet wrote: Sat Jan 15, 2022 9:24 am
DarkMatter731 wrote: Sat Jan 15, 2022 8:34 am That's because it's against the law to hold UPRO in the UK - it's a US-based ETF with no KIID document. EU legislation that the UK has continued to uphold.
A couple of small but potentially important corrections here.

Firstly, it is not "against the law" for UK or EU investors to hold UPRO or anything else that lacks a KIID. What the PRIIPs regulation does is prevent a broker covered by this regulation from offering or selling an ETF or other "complex" financial product that lacks a suitable KIID to UK or EU based investors. That doesn't mean you cannot hold these investments, though. For example, if you hold one from before becoming a UK or EU resident, that would be entirely fine. Or, if you find an alternative route to buying them.

Secondly, it only applies to retail investors. I'm not an Interactive Brokers customer, but presumably(?) the function of Interactive Brokers' CLP (Complex and Leveraged Products) account configuration, undertaken by the topic author, is a route to avoiding PRIIPs restrictions on "retail" investors.

More detail on PRIIPS here: PRIIPs Regulation | FCA
Secondly, it only applies to retail investors. I'm not an Interactive Brokers customer, but presumably(?) the function of Interactive Brokers' CLP (Complex and Leveraged Products) account configuration, undertaken by the topic author, is a route to avoiding PRIIPs restrictions on "retail" investors.
Yes, which is why I said you have to have an account of £500,000 and make 40 or so trades a year. That's the boundary to be classed as an institutional investor. The CLP account configuration is not a route to avoiding PRIIPs restrictions on retail investors - you have to make a certain number of trades a year and have a certain net liquidation value to be classed as institutional.

Slight correction here but passing the CLP 'test' is not enough to be classed as institutional.

What the PRIIPs regulation does is prevent a broker covered by this regulation from offering or selling an ETF or other "complex" financial product that lacks a suitable KIID to UK or EU based investors. That doesn't mean you cannot hold these investments, though. For example, if you hold one from before becoming a UK or EU resident, that would be entirely fine. Or, if you find an alternative route to buying them.
Of course it's legal for someone to buy a leveraged ETF - for example, if you're an institutional investor. It's exactly why I mentioned the boundary to be classified as an institutional investor. I possibly didn't word it in the best possible way but it's what I meant.

It's not legal for a broker to provide you with the option to buy a leveraged ETF if you're a UK-based retail investor if I understand it correctly.

It's exactly why I said this in my comment:


If you really want to invest in UPRO using IB, you just have to have £500,000 in your account and make 40 or so trades a year.
TedSwippet
Posts: 4037
Joined: Mon Jun 04, 2007 4:19 pm
Location: UK

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by TedSwippet »

DarkMatter731 wrote: Sat Jan 15, 2022 9:49 am Of course it's legal for someone to buy a leveraged ETF - for example, if you're an institutional investor. It's exactly why I mentioned the boundary to be classified as an institutional investor. I possibly didn't word it in the best possible way but it's what I meant.
In which case, please go back and edit your original "it's against the law to hold ..." to better express what you actually meant. Future forum readers cannot also be expected to be mindreaders.
DarkMatter731
Posts: 63
Joined: Sat Apr 25, 2020 8:28 am

Re: Interactive Brokers won't let me buy UPRO (can't do HFEA?)

Post by DarkMatter731 »

TedSwippet wrote: Sat Jan 15, 2022 10:30 am
DarkMatter731 wrote: Sat Jan 15, 2022 9:49 am Of course it's legal for someone to buy a leveraged ETF - for example, if you're an institutional investor. It's exactly why I mentioned the boundary to be classified as an institutional investor. I possibly didn't word it in the best possible way but it's what I meant.
In which case, please go back and edit your original "it's against the law to hold ..." to better express what you actually meant. Future forum readers cannot also be expected to be mindreaders.
Absolutely, but in context of me listing the criteria of being classed as an institutional investor and being able to hold UPRO, I thought it would be clear enough.

I will go back and edit it now for clarity but the context should have made it obvious.
Post Reply