IB charging exchange fees

IRA: why would you put idle cash in an IB IRA? If you own stock you would not earn interest on it. If you have idle cash it probably should be with someone else since the IB IRA is designed for active traders. As for the cost of maintaining an IRA, I hear it is alot higher than you may think.

mult accounts: I can't confirm 100% but from the info I rec'd today it looks like multiple accounts will be covered so you do not pay multiple exchange fees.

I don't have more info at this time. I am recommending that an FAQ be put on the web site to answer these types of questions so we do not have to speculate on them here.
 
def - IRA: why is cash in a non-IRA account treated differently than an IRA account ? If IB provides interest in a regular account - I don't see why an IRA account should be penalized. Idle cash in an IRA account (not invested yet) is only idle because it isn't earning interest. In an IRA account, folks tend to be more cautious because it is their long term holdings at stake. IB is doing well by investing idle cash in customer IRA accounts for its own gain. That's fine - just no new fees please.

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From IB WebSite:

"What Annual IRA Fees Will I Pay? None, as long as the average daily equity in the account is over $3,000. If the average daily equity in the account is under $3,000, IB will charge a $30 annual IRA maintenance fee in order to cover administrative expenses ($7.50 to be deducted after the end of each calendar quarter)."
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def, I look forward to your update. Hopefully there will be some changes (i.e. being able to opt out of receiving IB quotes - a simple programming change) after they have considered our comments. Thanks for your help def.
 
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def, I look forward to your update. Hopefully there will be some changes (i.e. being able to opt out of receiving IB quotes - a simple programming change) after they have considered our comments. Thanks for your help def.
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I fully Agree. Sascha
 
Sorry, guys, but IB's exchange fees make little sense:

- the $10 for stocks is much greater than what it actually costs them (as others have noted)
- the $10 for globex E-Mini data should be $0 for first six months, and $10 after that (according to CME)
- they make plenty off the interest they're keeping on my first $10,000
- we're being charged for the most unreliable quotes I've seen from any broker or quote service
- many of us are now likely to be charged multiple times for each exchange we access

IMHO, for dealing with inactive accounts, they should simply do what many other brokers do: for inactive accounts below a certain level of funding, charge an inactivity fee.
 
Def,

You asked why one might have cash in an IRA account.

I have cash in my IRA account because we are in a bear market and I am not allowed to sell short in my IRA account.

Furthermore, it's not clear to what extent I can daytrade in my IRA account: I am still waiting for your help desk to answer this question for me.

Once the bull market returns, then I'll look to trade to the long side. Until then, my IRA account remains in cash.

However, if my IRA account is going to be charged $10 a month, I will transfer it out.

I'm still thinking about transferring out anyways, due to the loss interest on the first $10K of cash in the account.

-- Punter
 
The other day I made myself real angry about Datek charging an inactivity fee of 15$ p/q.
And now IB is going to do the same thing. The only difference is that it is twice that much!

And IB already holds $350-400 worth non paid interest. That's $30 p/m at least. So we're already paying a basic fee. I haven't seen you comment on that one yet def, though it's been mentioned several times!

An inactivity fee is a stupid thing to do from a commercial point of view. It is generally felt by customers as basically injust to be charged for services not being taken.
It will make customers close their accounts, and once an account has been closed it becomes far less likely that the customer will ever come back.

My account isn't inactive, though I'm beginning to do swingtrading, making it less active, but anyway the $10 fee probably won't really apply to me, but I don't like it anyway.
 
I think wireless is carrying the primary issues that need addressed.

Getting the IRA opted out would help a great deal, or at least let us apply trading commission volume from our non-IRA accounts toward the IRA...and hopefully the spouse's IRA since I think most here trade on the spouse's behalf...I do. Maybe allow the user to create a "basket" of accounts...those that are related under certain rules (marriage, primary holder, authorized trader, etc...) that as a group would be subject to the charges.

The biggest problem many have with small IRA balances is that our wonderful gov't only allows a certain amount to be added each year. While this figure is going up each year now til 2008, it is still relatively small, it goes to 3K next year. If you have a few good years and that income creeps up, you cannot contribute at all - heaven forbid the "rich" would be allowed to save a lil tax free $$$.

On the regular accounts, I guess I do not have a problem with the $10 fee per se if they must do it. This is a free market and anyone can take their accounts elsewhere. Where else is a retailer going to trade for less than $5-$10 per trade? Brown has $5 market orders but limit orders are $10, Datek charges $10. To me, with my trading style (scaling in and out) - I look at how many trades I would have to put on in my regular account to SAVE the $10 that IB would charge. Compared to any other broker, I'm still way ahead on commission savings.

I think IB could hide the Level I quotes. Have the system maintain the quote as they do now, but do not show it to the (unsubscribed) user until they place an order. Simply remove the bid/ask fields from the TWS tab where the orders are placed.

It would be nice to opt out of Level I, but I think getting the IRA's out of the picture in some form would make this an acceptable change.

Thanks again Def.
 
I think that the $10/mo charge is reasonable, especially since I suspect that the vast majority of us won't be paying it given the waiver with monthly commissions if you do over the modest $30/month commissions. I agree that charging IRA's the same fee might be painful for some. And if IB charges that fee on a per account basis (as opposed to per account holder which seems more fair if they have other accounts that are active) the customer should have the option of the fee coming out of his/her main taxable account .

I do however question the $79/month charge to nonpros for Level 2 quotes, given that the Nasdaq charges $10/month for them, and other quote providers pass that $10 amount through. I get them from other sources, so they're not something that I really need, and will probably just not get them. On the other hand, if they were $10/month, I'd probably get them just for redundancy.

99
 
I find IB's new fees resonable. IB's services are designed for the active trader. I just don't see how creating $30 in commision for an active trader is an issue.

If you don't like IB's offerings, just move your money somewhere else. We still live in a free world.
 
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