IB "Concentration Minimum" maintenance margin question

[d08]

I would keep away from IB, their margin requirements fluctuate wildly and I'm seeing worse terms for CFDs, never mind the execution issues. IB's risk department treats traders like sheep.

 

[henry76]

The margin requirements maybe problematic , but the commission on US stocks (CFD's) is I believe less than half of I know of anywhere else.( the margin is an issue for me , but the execution isn't).

 

[d08]

IB's rules maybe arbitary , but it's a business transaction , if we don't like their rules we don't have to trade with them, most brokers will have some rules, I just find I lose the will to live trying to work out margin reqs every day so don't bother, I bet even if you follow all your advice on margin you'll still occasionally find differences where IB have changed the reqs etc.) (especially with more obscure stocks etc)

That's fine but when you go with IB, use their API extensively when the margin reqs are stable - then one day they just go insane with it and just effectively screw the traders (0.5 to 1 leverage on some equities!). It's not like you can just switch instantly after you've put years and years of work in. IB knows this and is enjoying the situation. It would be nice if some brokers started adapting the IB API as a possible method of alternative communication, so switching would not require months of work on the code.

 

[JSOP]

Maybe true , but I think with cfd's in particular their commissions are much much less than other brokers, especially U.S. stocks , certainly Uk based cfd's are I believe twice the commission atleast (I'd be happy to be corrected on this ) probably the thing that comes closest would be portfolio margin with other US brokers.

You know why CFD's commission are lower? That's cuz the broker is the market maker of the CFD's so when you are trading in those CFD's, you are trading against the broker itself so whenever you lose, they win. They are directly profiting from your positions so this is why they charge you lower commissions. And you can only profit when they lose. Guess what they are going to not let you do?? For me, I wouldn't trade CFD's at all with any brokers.

 

[persistence]

You know why CFD's commission are lower? That's cuz the broker is the market maker of the CFD's so when you are trading in those CFD's, you are trading against the broker itself so whenever you lose, they win. They are directly profiting from your positions so this is why they charge you lower commissions. And you can only profit when they lose. Guess what they are going to not let you do?? For me, I wouldn't trade CFD's at all with any brokers.

They offer DMA for stock CFDs.

By the way, I just downloaded demo and I don't see 30% limit thingy there. Buying power is less than 10x for blue chips, but certainly not 3.3. They advertise that the demo is the same as real TWS, but I'll call them to be sure about this.

 

[JSOP]

I would keep away from IB, their margin requirements fluctuate wildly and I'm seeing worse terms for CFDs, never mind the execution issues. IB's risk department treats traders like sheep.

Their risk department is completely clueless and totally out to lunch on what's going on. I suspect they have their ulterior motives in screwing with the margin requirements so much so unnecessarily. They are doing it on purpose to force us to trade more to generate more commissions for them. With the market being so strong, I am not surprised that many people are doing "buy and hold" with their securities and guess what that results into for IB?? That's right, no commission revenue. And that is a no-no for IB because IB always has to make money. So what does IB do? Force traders to trade more of course and what best way to force traders to trade more and put in more money by screwing with the margin policy so the traders are force-liquidated on their existing positions even though they are profitable and then have to put in more money and trade more?

"We are in the strongest bull market ever." "Can't you see the market is going to drop 30% tomorrow??!!!" Yes, IB is truly despicable. Glad I am outta there.

 

[JSOP]

They offer DMA for stock CFDs.

By the way, I just downloaded demo and I don't see 30% limit thingy there. Buying power is less than 10x for blue chips, but certainly not 3.3. They advertise that the demo is the same as real TWS, but I'll call them to be sure about this.

Be prepared to wait 30 min. to talk to the right person. You have to ask to talk to the margin department to be sure. All other customer service rep. are clueless, just so you know. And second, they don't have the same information at all the places. Sometimes you see it, in some places you don't but that doesn't mean they don't exist. Yes they are extremely disorganized too. And third, their demo is NOT the same thing as their TWS despite what they claim. IB states that you should not rely on their demo to know everything rather it's just a tool for you to get familiar with using their TWS which has a very steep learning curve as you will find out if you sign up with them.

 

[cruisecontrol]

To me, this is just how IB micromanages its traders by imposing its own arbitrary rules and policies when they are totally clueless about the nature of the market nor the quality or behaviour of the security itself nor the trading skill and prudence of the traders themselves. I have opened up an account at IB to trade, not to be babysat. It's both draconian and baseless. What's this "30%" based on? Why not 20%? Why is not 50% or 100%? Why don't they the security will drop in value 100% while they are at it? Why stop at 30%? If you are able to find other brokers, I strongly suggest you go with other brokers. Take it from a former client of IB who has been with IB for many years, trust me when I tell you IB is NOT what it makes itself out to be. It's neither the lowest-cost nor the best quality broker out there. Their advertised commission charge might be low but they have all kinds of mechanisms and hidden fees/charges to make sure your commission charge that you end up paying is higher, much higher than what is advertised. Your experience with them will be a very frustrating one. You can ask many of the Elite Trader members here who are truly IB's clients and they will tell you the same thing. They are many many many brokers out there that are either lower cost or deliver much better quality of platform/service/execution or both or all of them or at least 2 or 3 of the criteria. IB is really a high-end bucketshop that just dwindles right on the edge of the legal side. If you still want to try them out, go right ahead but you will arrive at the same conclusion as us.

Good luck!

Long on emotional paranoid rambling, short on facts and data.

Can you give even one proof of a trade that you did where the commission fees were different than what is documented on their website?

Can you actually name some of these "many, many" other brokers that are superior to IB and quantify the ways in which they are superior? I'm sure that there are literally tens of thousands of people out there who would love to be enlightened on this, myself included.

Can you back up your assertion that IB engaged in legally questionable practices?

 

[JSOP]

Long on emotional paranoid rambling, short on facts and data.

Can you give even one proof of a trade that you did where the commission fees were different than what is documented on their website?

Can you actually name some of these "many, many" other brokers that are superior to IB and quantify the ways in which they are superior? I'm sure that there are literally tens of thousands of people out there who would love to be enlightened on this, myself included.

Can you back up your assertion that IB engaged in legally questionable practices?

Have done so in many of my other posts if you care to find out. Just here to help the OP out. So just beat it, troll!!

Boy people aren't kidding when they appeal to the mods to clean up the forum here. The trolls here really are annoying and they really are everywhere now, not just in the "Politics" section anymore.

 

[henry76]

They offer DMA for stock CFDs.

I'm not totally sure either way as regards DMA but I don't seem to slip very much on entry/ exit , but they do screw around with margin reqs and as I say , I've given up trying to fathom it , if I did work out why/how much , it would only change with next stock etc ) so I don't bother ), but as previousley stated cfd wise they are so much cheaper that this outweighs the downside,[/QUOTE]