I live in the US and have been trading hang seng futures at night. How do I account for my gains/loss with regards to US income tax? Do I have to report gains as regular income and can I subtract losses against my US equity gains?
i have no idea about your question but id be interested to know what trading the hang seng is like.. how are fills? is there good liquidity? what kind of commission costs are there? is there enough volotility for intraday trading? thanks -qwik
HK has no capital gains tax. That means for most of the real world you wouldn't have to pay taxes on your gains. However, as I assume you are American - you are out of luck. (I'm in the same boat on taxes but since I am unable to trade HSI for my own account, I can't tell you how you would handle it). HSI: I've been trading HK for about 8 years. Volume on the futures is about 15-25K per day. Although depth is usually thin on top of the books, however, getting filled is not a problem. The volatility of the index makes it interesting to trade. I'd recommend trading it but it really would depend on your style. ie. If your style is to scalp for a few ticks you probably will get burned when your stops can get blown out by gaps in the market. However, if you are good at recognizing trends and/or support resistance levels, you may do very well. Speed & prices are very good. IB's price feed is direct from the exchange. Our clients get the same feed as our prop side. We charge 30 HKD all in which includes exchange and regulatory fees of I think 11.50 HKD. (To put the fee in perspective, when using outside brokers for option trades on our prop side we are charged 25 HKD per contract w/o clearing and exchange fees). Each tick is 50 HKD thus you'll need two ticks to make a profit. The standard deviation is a bit over 150 points. I know a number of you are trading the index from the states and would be interested in your thoughts/comments as well. The best thing to do would be to watch the market for a while and make your own determination. Right now for trading accounts, the HKFE data feed is free. (I hear rumblings from the exchange that they may start charging for data so this may change. my issues with exchange management is a topic for another day).
I use IB and fills are usually instantaneous. But maybe once a week I get a few seconds lag at times of extreme activity. Liquidity is fine for 5 contracts or less. I trade the full size contract and the commission is HKD 30, which is about $4. There certainly is enough volatility, but I've found the hang seng to be very choppy. Its a hard market to trade.
Htrader, This may not be a smart option, but I know people who have set up bank accounts in hong kong and transfer money in and out of those accounts without paying HK tax. They are not americans though, and I think for tax purposes they are nomadic. Im not sure how this would apply to your situation, but worth investigation if you wsh to keep trading the market there without paying tax. Runningbear
thanks Htrader and def for the info.. who are you guys using for charting? i have esignal but i dont see hkfe listed as a data option.. -qwik
We don't use charts on our prop side although I do have access to bloomberg and reuters. I heard Sierra Charts has a package that links the TWS and HSI quotes. I also believe esignal and others will have something shortly.
I uses SierraCharts right now and since I'm just trying to get a feel for the price action it's great. The only problem is that I don't have any historical data. Does any one know where I could get historical charts? Does not have to be far back just something to look at for S/R. I do have to say I love IB, with the universal account I can trade all these markets from one account with out blinking an eye, and as far as execution well I only have a dozen or so HSI trades under my belt but they have been instant as always. Praise IB
historical HSI: typical of the HK Exchange, they provide historical graphs of the individual stocks and omit the derivatives. http://www.hkex.com.hk/invest/company/pricemenu_page_e.asp This isn't a very detailed chart but you can try bloomberg and get the index with the symbol ^HSI http://quote.bloomberg.com/gcenter/...te1=&equote2=&equote3=&T=markets_gcenter99.ht If you want more detail, check out the lis of data vendors on the HKeX website.