Buckets in IB for multiple strategies

[volpunter]

Could you please comment on how groups pertain and potentially solve the OP's question? My understanding is that you can create 2 different groups, group1, and group2, that "can" share one and the same underlying account. When you then submit an order you can choose whether to allocate the trade to group1 or group2. In that you have a clear separation of trades into different groups but margin is shared in one and the same account. How does this not directly address the OP's intent?

Thanks

As point of clarification, the advisor (or "F" type) account is intended to accommodate an arrangement whereby individuals provide discretionary trading authority to an advisor who, through his master account, pre-allocates and enters orders on behalf of those individual clients. As the client accounts typically represent distinct ownership interests, the is no pooling of assets across for purposes of margin (i.e., each individual client account must maintain equity in an amount sufficient to meet the margin requirement of their positions).

We do offer an account type which likely meets the requirements of the original poster, but which introduces other considerations that may or may not be desirable. It's a proprietary trading group account referred to as a Separate Trading Limit Account (STL). Similar to an advisor account, it consists of a master account and subaccounts referred to as service accounts. The purpose of the service accounts is to hold positions associated with a given strategy and/or a given trader. As positions and assets have common ownership, they are aggregated for purposes of determining compliance with maintenance margin requirements, although initial margin must be met at the individual service account level.

Other things you may want to be aware of:

- As this is an institutional account structure it is not available to individuals; your account would need to be formed as an organization.

- The minimum funding requirement is USD 10,000, or equivalent (in aggregate not for any service account or the master)

- The master and service level accounts are each subject to the monthly activity fee, although this fee is eligible for offset based upon commissions aggregated across all.

- As market data is subscribed to at a user level and each service account requires its own user, you may be subject to additional subscriptions and costs than you would in your existing account. Moreover, as this is an organization account you will be classified as a professional for market data subscription purposes which itself infers higher costs.

Below is a link to our website where you can find additional information on the STL account along with a detailed users guide. Should you have other questions, please contact our Professional Services Desk at 866-694-2757, menu option 3.

https://www.interactivebrokers.com/en/index.php?f=648

 

[IB-AN]

Could you please comment on how groups pertain and potentially solve the OP's question? My understanding is that you can create 2 different groups, group1, and group2, that "can" share one and the same underlying account. When you then submit an order you can choose whether to allocate the trade to group1 or group2. In that you have a clear separation of trades into different groups but margin is shared in one and the same account. How does this not directly address the OP's intent?

Thanks

I think that the STL account structure would satisfy the OP's question in that multiple service level accounts could be created to hold positions of a given strategy and the maintenance margin requirement would be determined based upon the aggregate of all service accounts (strategies).

Orders under the STL account structure can be entered at either the master account level or by logging in as a user at the service account level (as these can be allocated to individual traders as well). When entering at the master account level, you'd need to designate the service account which will hold the position, once executed. This is somewhat different than the Financial Advisor ("F" account) structure whereby a single order can be entered at the master account level for multiple client accounts, with the share/contract quality per account pre-allocated at the point or order entry.

 

[kcgoogler]

I think that the STL account structure would satisfy the OP's question in that multiple service level accounts could be created to hold positions of a given strategy and the maintenance margin requirement would be determined based upon the aggregate of all service accounts (strategies).

Orders under the STL account structure can be entered at either the master account level or by logging in as a user at the service account level (as these can be allocated to individual traders as well). When entering at the master account level, you'd need to designate the service account which will hold the position, once executed. This is somewhat different than the Financial Advisor ("F" account) structure whereby a single order can be entered at the master account level for multiple client accounts, with the share/contract quality per account pre-allocated at the point or order entry.

Thanks IB-AN. Glad to know there is atleast one way of doing it.

But i wish it were simpler than having to open a Prop Trading Group account when all i wanted was a customized view of my positions. I am not worried about the nominal fee for data etc but its probably a pain to setup an organization (LLC?) for it.

-gariki

 

[volpunter]

Again, I would first check whether you can create groups in your account. The button in TWS for me is called "FA Setup" and "Account Groups" where you can create new groups. It may only work if you have an FA type account structure but I would try it anyways.

Thanks IB-AN. Glad to know there is atleast one way of doing it.

But i wish it were simpler than having to open a Prop Trading Group account when all i wanted was a customized view of my positions. I am not worried about the nominal fee for data etc but its probably a pain to setup an organization (LLC?) for it.

-gariki

 

[IB-AN]

Again, I would first check whether you can create groups in your account. The button in TWS for me is called "FA Setup" and "Account Groups" where you can create new groups. It may only work if you have an FA type account structure but I would try it anyways.

You have either a Friends & Family or Financial Advisor (i.e., "F" type) account. While you can create groups of client accounts, this is solely for the purpose of facilitating order entry and, while positions would be maintained separately within each of those client accounts, they would not be combined for purposes of determining margin requirements.

 

[volpunter]

I tried it and what you said is not the case: I created 2 groups and I can specify the group at order entry and the ensuing position will be maintained separately according to the group, specified (as you described) and both groups share the very same underlying accounts and hence funds available for trading. I used an identical "U" user account as underlying for both groups.

You have either a Friends & Family or Financial Advisor (i.e., "F" type) account. While you can create groups of client accounts, this is solely for the purpose of facilitating order entry and, while positions would be maintained separately within each of those client accounts, they would not be combined for purposes of determining margin requirements.

 

[IB-AN]

I tried it and what you said is not the case: I created 2 groups and I can specify the group at order entry and the ensuing position will be maintained separately according to the group, specified (as you described) and both groups share the very same underlying accounts and hence funds available for trading. I used an identical "U" user account as underlying for both groups.

Did you actually attempt to create an order that would have exceeded the equity of any one account within the group? If so, you'll see that the order will either be rejected or reduced to a level that each client can individually hold (depends upon your order settings).

When you create a group, you'll see the group's cash and positions aggregated for viewing purposes on the order screen, but they will not be aggregated for margin purposes. Each client account within the group needs to have sufficient equity to initiate an order and maintain it upon execution.

 

[volpunter]

No I did not and that was not the point. The point I tried to make is that as long as one and the same underlying account is shared among two groups that margin requirements are satisfied from the same shared account. And yes I did actually submit and execute trades for both separate groups.

Did you actually attempt to create an order that would have exceeded the equity of any one account within the group? If so, you'll see that the order will either be rejected or reduced to a level that each client can individually hold (depends upon your order settings).

When you create a group, you'll see the group's cash and positions aggregated for viewing purposes on the order screen, but they will not be aggregated for margin purposes. Each client account within the group needs to have sufficient equity to initiate an order and maintain it upon execution.

 

[IB-AN]

It’s difficult to respond without seeing exactly what you are doing, knowing that we’re using the same terminology or even trying to accomplish the same outcome for that matter. My understanding of what kcgoogler was seeking was the ability to maintain positions in separate accounts following order execution with each account holding those positions associated with a particular strategy. This would allow for separate viewing, statement reporting, performance reporting and allocation of capital by strategy.

As such, for purposes of my responses, a “group” is defined as one or more client (“U” type) accounts beneath a given Advisor ("F" type) account. And while a given client account can belong to one or more groups, those groups are intended to facilitate order entry by the advisor (e.g., allocate shares/contracts across multiple clients accounts based upon certain rules such as equal quantity of shares or share values proportionate to each client's equity). It's an order management tool, not necessarily something one would use to separate positions.

Accordingly, if you were to assign a single client account to multiple groups and create orders for each of those groups, it's true that you'd share the same margin collateral (as by default margin is calculated at each “U” account level), but you would not be creating any separation of strategies for view or report purposes as they'd all be carried in the same client account. In other words, positions are not maintained at a group level, only at the client or "U" account level which is where collateral is held and margin compliance determined.

 

[volpunter]

but that is not how it seems to work. I can create 2 different groups, each containing one and the identical U..... account. That means both groups share the same underlying capital, available, and hence margin is calculated and satisfied from the same U.... account. When I specify one of the 2 groups at order entry the entire fill is allocated to that group and I can see positions within each group separately. Unless I misunderstand what OP tries to do groups that share the same underlying U client account would solve his issue. My understanding is the OP only wants to "view" positions in a segregated fashion but for purposes of all calculations still the same underlying account should be perused.

So, yes I agree that from a business logic sense all positions are maintained by the underlying U client account but I thought the point here was how to view positions in a segregated fashion, and "tagging" via different groups would accomplish that.

Maybe I misunderstand what OP tries to achieve and you certainly are much more of an authority to speak on this issue and I am, I just shared what can be done based on my own experience of using TWS for over 10 years now and the tagging of trades according to groups, done just 2 days ago.

It’s difficult to respond without seeing exactly what you are doing, knowing that we’re using the same terminology or even trying to accomplish the same outcome for that matter. My understanding of what kcgoogler was seeking was the ability to maintain positions in separate accounts following order execution with each account holding those positions associated with a particular strategy. This would allow for separate viewing, statement reporting, performance reporting and allocation of capital by strategy.

As such, for purposes of my responses, a “group” is defined as one or more client (“U” type) accounts beneath a given Advisor ("F" type) account. And while a given client account can belong to one or more groups, those groups are intended to facilitate order entry by the advisor (e.g., allocate shares/contracts across multiple clients accounts based upon certain rules such as equal quantity of shares or share values proportionate to each client's equity). It's an order management tool, not necessarily something one would use to separate positions.

Accordingly, if you were to assign a single client account to multiple groups and create orders for each of those groups, it's true that you'd share the same margin collateral (as by default margin is calculated at each “U” account level), but you would not be creating any separation of strategies for view or report purposes as they'd all be carried in the same client account. In other words, positions are not maintained at a group level, only at the client or "U" account level which is where collateral is held and margin compliance determined.