Search results

Yes, try previewing a big order for FTEG or CBDL for example in TWS and you’ll see it won’t accept it. yes, IB’s commissions (and bundled clearing charges) for otc penny stocks are significantly higher than many retail brokers who charge a fixed price per trade.

They’re self clearing and have lots of capital? But they have added a lot of otc restrictions recently due to the dumb SEC rules coming later this year.

And in addition, IB has a max order size of 500k shares, which is only $50-100 for the very low priced stocks so it’s a pain to trade. Plus, they won’t allow all but the highest tier of OTCs and many of the rest with any “flags” (shell Corp, no financial info, etc) are all close-only. you’d...

No, they won’t ACAT unsettled shares. They’re worried about compliance / fraud related issues.

Worse, Schwab doesn’t negotiate lower margin rates for those with large balances the way most other brokers do. Well, I suppose they might offer something better than 7-8%, but nothing competitive with IB at 1% or the like.

Because the clearing firm says so. But mainly because there’s a chance the shares aren’t real or something and they need some extra capital until the shares settle two days later.

I’m sure it’s based on average volume over a few weeks or months. Either way, if you’re trading a stock like that, expect to run into these compliance issues. the bad part is that even after you address their concerns, the trading permissions are only restored for two weeks (to allow you to...

No, it’s based on trading volume. I’ve had a compliance review trigger for trading 1000 shares at less than $10 each. The stock had 7M shares outstanding as of their last annual report. Average volume for the stock was about 1000 shares daily. there’s a separate >1% outstanding shares...

I don’t know what the % of average volume cutoff is, but this has been a problem for me in lower liquidity listed stocks as well as OTC.

IB these days hassles you if you trade an unspecified % of volume as if you might be an affiliate of the company and locks up your position, including from closing it, for some compliance review. Trading or acquiring moderate positions in low volume OTC stocks is probably best done elsewhere.

We’ll have to agree to disagree on this. Whether a 90% hit is the right number will depend a lot on who currently owns the stock and whether opportunistic buyers can find a broker who will let them bid for it in the gray market. The more shorter term current shareholders / traders in a stock...

It’s not quite that simple. Most investors don’t have a timeframe of “forever” ala Berkshire and do value the liquidity of being able to sell their holdings, either for funding their lifestyle or reallocating to other more promising investments when circumstances change. For these reasons, if...

So with your experience with OTC markets, I’m sure you know how much a stock tanks when it gets kicked off otc to the gray market. Down 90-99% seems typical. That will happen to otc scams but also to real value stocks that don’t follow these new rules, either because they don’t care or it’s...

Lots of nanny brokers have been banning trading in various types of OTC and even occasionally listed stocks, solely based on the (sometimes inaccurate) OTC Markets classifications such as “no info”, “shell”, “caveat emptor”, their subjective interpretation of if someone might have been promoting...

You can get out of the 10% penalty, but not the taxes on the Roth earnings, via a 72T withdrawal schedule. https://www.forbes.com/advisor/retirement/rule-72t-early-withdrawals-sepps/ but if it were me, I’d be inclined to just trade more in my taxable account if I wanted more money to spend...

Good, hopefully they won’t screw it up.

They seem pretty good.

How can you target a fixed dollars filled if you don’t know if you’ll get filled on a particular order? You could either 1. Use market orders and have a rough idea for how much each would be based on the last trade and divide up your purchases that way, or 2. use limit orders for a fixed...

Yes.

The solution is to use a margin account to avoid settlement delays, but just not use the margin for leverage. Otherwise you’ll run into SEC free riding and similar cash account violations if you trade too frequently and get restricted to trading only settled cash.