Anyone analyse on the survivability of IB in 2020?

nooby_mcnoob · Mar 16, 2020

def said:
It is funny, on one side there are gripes because we are tighter than what seem to be most others on margin yet still get questions like the one above. During such chaotic times, it does remain valid so I ask you to compare other firms and make an informed decision. Please read the link below on our strength and security. It may provide some comfort. My thoughts/comments:

First and foremost, IBKR is extremely well capitalized with over $8 BILLION USD in shareholder equity. That would be one heck of a lot of client exposure to burn though.

Unlike most brokers, we monitor exposure real time to each and every client as well as a number of other metrics such as specific product and currency. We know where to focus and don't waste time reacting when a client goes into a deficit or negative liquidity.

Unlike most other large brokers and banks, our management and staff have significant skin in the game owning over 80% of the company. No one has a greater incentive to manage things more conservatively than we do.

We have a history of transparency and profitability being in the securities business since the late 70s. Our track record through thick and thin speaks for itself.

I urge you to do your homework, read our history, check our profitability during other periods of turbulence, look at our balance and income sheets and hopefully you'll walk away having additional comfort.

Link to Financial Strength and Security

Please keep liquidating their accounts I need you to survive.

That being said if they close the markets ib can't liquidate... So...

RedDuke · Mar 16, 2020

Check this data out. IB is super overcapitalized, and does check margins real time.

https://www.cftc.gov/MarketReports/financialfcmdata/index.htm

zoned_post_meridiem · Mar 16, 2020

athlonmank8 said:
IBKR will fold during the good times, not the bad. They're a horrible broker with high margins, terrible service, and brain-dead risk management that will drive even the most risk-adverse traders crazy. No way they're going to fold. They'd rather sit on cash than provide a reasonable service.

Their risk management is precisely why I'm comfortable keeping a large portfolio with them. Different strokes, I suppose.

nanama · Mar 16, 2020

I will doubt IB will Fail. Thay are not Robinhood. They are a strong company.

murray t turtle · Mar 16, 2020

athlonmank8 said:
They're a horrible broker with high margins They'd rather sit on cash than provide a reasonable service.

%%
Ever see an IBKR ad with a promise to hand hold, amk8 ?? Ever;+ I never have.
Like IBD/investors.com newspaper says- look @ both sides of the trade.
The less people pay down[margin] on a home= the greater the foreclosure rate. :caution:

,

That's why you may have seen a sliver margin chart; good uptrend/margin/price+ then something else...........................................................................................

JesseJamesFinn1 · Mar 16, 2020

The only threat is Zero Commission, they are a great broker that is not experiencing issues some of the Freebies are suffering.

zdreg · Mar 16, 2020

JesseJamesFinn1 said:
The only threat is Zero Commission, they are a great broker that is not experiencing issues some of the Freebies are suffering.

Not true. The biggest threat is FTT- financial transaction tax.
https://www.elitetrader.com/et/thre...tion-tax-and-disappearing-day-traders.340600/

Jason11111111 · Mar 23, 2020

OK. Got to admit I'm lazy to investigate ib financial health, and trying to seek short cut of some1 already have the right answer base on their net equity, cash allowance and foresight.

And market cap is definitely not a indicator of financial strength. There's no cash to raise in this market downtrend,unless u want to upset your existing share holders.

Yep, I do see IB has stronger healthy position along compared to other brokers. Alternatively investors can pull their cash and park in stronger banks if feels uncomfortable with the best broker's exposure.

And exactly the going concern was market gap down, limit down in this poor liqiuidity period . Its going crazy, definitely many people over leveraged in IB are put in queue to liquidate, while those put on queue, risk are still partially exposed by IB.
Especially IB just publish an enticing 1.7% margin loan ads to attract more people to use leverage lol.

Please tighten more on margin loan exposure. Liquidate more.
I want to see a strong lasting IB, benefits me this way.

RedDuke · Mar 23, 2020

IB is monitoring margin in real time, many brokers on daily basis. IB software would auto liquidate way before they are exposed to risking debit account.

zdreg · Mar 23, 2020

Jason11111111 said:
OK. Got to admit I'm lazy to investigate ib financial health, and trying to seek short cut of some1 already have the right answer base on their net equity, cash allowance and foresight.

And market cap is definitely not a indicator of financial strength. There's no cash to raise in this market downtrend,unless u want to upset your existing share holders.

Yep, I do see IB has stronger healthy position along compared to other brokers. Alternatively investors can pull their cash and park in stronger banks if feels uncomfortable with the best broker's exposure.

And exactly the going concern was market gap down, limit down in this poor liqiuidity period . Its going crazy, definitely many people over leveraged in IB are put in queue to liquidate, while those put on queue, risk are still partially exposed by IB.
Especially IB just publish an enticing 1.7% margin loan ads to attract more people to use leverage lol.

Please tighten more on margin loan exposure. Liquidate more.
I want to see a strong lasting IB, benefits me this way.

"Yep, I do see IB has stronger healthy position along compared to other brokers. Alternatively investors can pull their cash and park in stronger banks if feels uncomfortable with the best broker's exposure."
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You don't know how measure a brokerage firm strength. You certainly then don't know how to measure a bank's finance which is much more complex to analyze.