IB Exposure Fee

[Gldr]

IB wants another source of profits. Under the cover of risk management, they are increasing their profits through extra fees.

They will push the envelope of extra fees until traders start fleeing. From the look of the posts, it seems like no one will leave IB over exposure fees. People are annoyed, but not enough to leave. They have done their job for IB shareholders.

I think traders are more calculated so they phase out and look for a new broker rather then just emotionally closing positions. The same way, good tarders manage their positions so that the 'unlikely' scenario of the exposure fee will never happen.

My self, I have not posted any trades on IB since this fee and have found a good alternative with similar commissions and margins but no exposure fee for the instruments I trade.

 

[1245]

I think traders are more calculated so they phase out and look for a new broker rather then just emotionally closing positions. The same way, good tarders manage their positions so that the 'unlikely' scenario of the exposure fee will never happen.

My self, I have not posted any trades on IB since this fee and have found a good alternative with similar commissions and margins but no exposure fee for the instruments I trade.

What firm did you move to?

 

[NeutronJuan]

I'm no longer being charged an exposure fee even though my estimated exposure fee in the Risk Stress Test depicts this fee as increasing. Is anyone still being charged an exposure fee? Has anyone received any word from IB as to whether this fee is being dropped?

 

[risknav]

I'm no longer being charged an exposure fee even though my estimated exposure fee in the Risk Stress Test depicts this fee as increasing. Is anyone still being charged an exposure fee? Has anyone received any word from IB as to whether this fee is being dropped?

I’m in the same situation as you; however, up until this point I have not received any further communication from IB regarding this fee.

I can only speculate, if they did second guess there decision (to implement the fee) the easiest way would be to just stop the charge from being posted to accounts; instead of changing the code (albeit small) that generates the stress test report.

 

[RedDuke]

So, what's the best IB alternative then, when all things considered (platform, api, mobile apps, margin, omissions and etc)

 

[risknav]

So, what's the best IB alternative then, when all things considered (platform, api, mobile apps, margin, omissions and etc)

All things considered, IB is in a league of its own.

I will disclose I’m Canadian, which does reduce some options compared to US citizens, but I will specifically add to your list choice of markets – nobody outside of investment banks offer the choice they do – furthermore, inside the same account.

 

[RedDuke]

All things considered, IB is in a league of its own.

I will disclose I’m Canadian, which does reduce some options compared to US citizens, but I will specifically add to your list choice of markets – nobody outside of investment banks offer the choice they do – furthermore, inside the same account.

Yep. That's why finding a replacement will be tough. I heard that IB hired bunch of mf global risk people, and exposure fee is their idea.

 

[1245]

Yep. That's why finding a replacement will be tough. I heard that IB hired bunch of mf global risk people, and exposure fee is their idea.

"my global risk people"?

 

[Gldr]

What firm did you move to?

For european instruments, Saxo bank is a good replacement. Maybe also for american instruments, but I did not check.

 

[monkeyc]

From the look of the posts, it seems like no one will leave IB over exposure fees. People are annoyed, but not enough to leave. They have done their job for IB shareholders.

Oh so wrong. I have 3 other portfolio margin accounts besides IB and was prepared to wire money out of IB, then they stopped the ridiculous exposure fee so I decided not to. I am not wed to any broker, IB included. The exposure fee effectively triples their commissions, thereby making them the most expensive options broker out there. The autoliquidation is bad enough, but when you factor in high commissions, that would have been the final straw.

The people affected by the fee appear to be large account holders, and people like that have accounts spread among multiple brokers. So don't think they wouldn't leave one broker for another.