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Vanguard doesn't permit levered or inverse ETF buy orders in IRAs
Old 02-28-2020, 11:29 AM   #1
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Vanguard doesn't permit levered or inverse ETF buy orders in IRAs

I tried to enter an order for an ETF like TQQQ or SQQQ in my Roth and the order was refused. They are going to tell me what I can invest in? Time for a real brokerage.
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Old 02-28-2020, 11:48 AM   #2
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Trying to protect account holders.

I am sure that they allow individual stocks, but some of these are actually more volatile and riskier than leveraged but broadbased ETFs.
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Old 02-28-2020, 12:44 PM   #3
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True, they don't try to be everything to everyone.
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Old 02-28-2020, 01:01 PM   #4
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That is amazing. Yet another reason to take your business elsewhere.
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Old 02-28-2020, 02:23 PM   #5
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I know you can't short in an IRA - fed regs. Maybe that's been extended to funds that short? Or maybe VG is being conservative in their interpretation.

Has there ever been a ruling on this? I'm not sure I'd blame VG for this, it might just be prudent.

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Old 02-28-2020, 02:29 PM   #6
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I know you can't short in an IRA - fed regs. Maybe that's been extended to funds that short? Or maybe VG is being conservative in their interpretation.

Has there ever been a ruling on this? I'm not sure I'd blame VG for this, it might just be prudent.

-ERD50
At first I thought it might be some regulatory reason. But I researched it and found other brokers permit it, Vanguard just decided it won't let certain investments be available to their customers.
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Old 02-28-2020, 03:04 PM   #7
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At first I thought it might be some regulatory reason. But I researched it and found other brokers permit it, Vanguard just decided it won't let certain investments be available to their customers.
I'm curious if my brokers allow it, I may test it next week during market hours.

But I guess that's your answer, if you want to do it, time to switch.

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Old 02-28-2020, 03:16 PM   #8
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Fidelity makes you agree that you are an "aggressive" investor and other *&^%@ before they let you buy certain investments or trade after hours.
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Old 02-28-2020, 03:22 PM   #9
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Here is a link to Vanguard’s explanation on why they don’t allow these investments

http://https://investornews.vanguard/vanguard-to-stop-accepting-purchases-in-leveraged-and-inverse-investments/
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Old 02-28-2020, 03:29 PM   #10
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Today I traded the SPXU and UPRO all day long in my Fidelity Roth account. I suggest you go somewhere else.
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Old 02-28-2020, 04:11 PM   #11
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Here is a link to Vanguard’s explanation on why they don’t allow these investments

http://https://investornews.vanguard/vanguard-to-stop-accepting-purchases-in-leveraged-and-inverse-investments/
I do not use my Vanguard accounts for active trading, so did not know about this restriction.

Yes, just as I thought, Vanguard seeks to protect account holders from "hurting" themselves.

With other brokers, they did not care. Outright shorting stocks in an IRA account is against the IRS rule, I believe, because it means borrowing somebody else's shares to sell. Buying a bear ETF is not a problem. Same with leveraged ETFs.

Some time last year, Schwab made account holders acknowledge that these ETFs carry higher risks. "Don't blame us if you hurt yourself" is what they try to say.

PS. Should Vanguard disallow account holders from trading GE, or Tesla, or energy stocks? These are quite volatile too. Who's going to determine the criteria?
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Old 03-03-2020, 09:59 AM   #12
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I tried to enter an order for an ETF like TQQQ or SQQQ in my Roth and the order was refused. They are going to tell me what I can invest in? Time for a real brokerage.

That was the straw that broke the camel's back for me as well. Not that I own any levered funds, but I'll be damned if I let a broker tell me I can't buy etf XYZ or whatever.

My brokers job is to do what I tell them to do with my money and keep their opinions to themselves.
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Old 03-03-2020, 12:54 PM   #13
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... My brokers job is to do what I tell them to do with my money and keep their opinions to themselves.
Nothing wrong with this, but you are apparently a customer that VG doesn't want to keep: "This change is part of an ongoing effort to align the products and services we offer with our investors’ focus on the long term. These investments, which are generally incompatible with a buy-and-hold strategy, run counter to this long-term focus."

From time to time it becomes necessary for a company to fire a customer. Good managers understand this.
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Old 03-03-2020, 01:01 PM   #14
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I have no problem at all with Vanguard prohibiting or restricting trading for certain stocks and ETFs to protect their customers from themselves (be it customers who are misinformed or customers that fat-finger a ticker symbol).

The needs of the many ourweigh the needs of the few.

And for those who this upsets enough for them to leave Vanguard... don't let the door hit you in the arse on your way out.
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Old 03-03-2020, 11:16 PM   #15
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Its become apparent that I have a two person fan club on this forum.

Does anyone know if there is a way to put people on ignore, so I don't have to see their comments anymore?
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Old 03-03-2020, 11:54 PM   #16
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.... Does anyone know if there is a way to put people on ignore, so I don't have to see their comments anymore?
Yes, there is a way to put people on ignore.
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Old 03-04-2020, 03:49 AM   #17
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I find Vanguard inferior to Fidelity in many respects. The only reason I stay there is to not have all my eggs in one basket.
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Old 03-04-2020, 08:53 AM   #18
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Its become apparent that I have a two person fan club on this forum.

Does anyone know if there is a way to put people on ignore, so I don't have to see their comments anymore?
Many of us know.

Many of us don't use it, we want to hear dissenting opinion, that's how we learn.

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Old 03-04-2020, 09:05 AM   #19
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Fidelity makes you agree that you are an "aggressive" investor and other *&^%@ before they let you buy certain investments or trade after hours.

Yes, I had to do that just last week with Fidelity but it was easy to do.
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Old 03-04-2020, 09:18 AM   #20
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For those that didn't know (like me), if you login you can click on a users name and there is a drop down to add someone to your ignore list.
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