IB - firm-wide system modification. Is your account affected?

[Ajax2004]

I put in an option order yesterday. The order was rejected, despite my account being approved for it - or so I thought. They later confirmed I wasn’t actually approved for the trade due to a problem in their compliance department.

This (lightly edited) correspondence followed. Judge for yourself:

My follow-up question to IB:

Thanks for the reply. Please address the following:

1. Why wasn’t this done before despite me submitting the request very long time [months] ago?

2. Why is the trading permissions section in the Acc Management showing I’m approved for it when I wasn’t?

3. This trade that I put in and was rejected is in profit now, how are you going to compensate me for this?

4. I’ve heard many times horror stories about IB in places like EliteTrader.com and where an IB rep had to come and explain and try to clean up the mess, I hope this isn’t going to follow the same pattern.

Thanks.

IB’s response:

1) Compliance had an issue where certain accounts who requested a trading permission upgrade did not come into their queue (Inbox). Yours was one of the affected accounts.

2) This is an unusual programming feature. I do not know why the screen is programmed to show you permissions that have not been approved. This will need to be reviewed by programmers for a firm-wide modification.

3) There will be no compensation for a speculative profit. Interactive Brokers does not guarantee approval of trading permissions and and certainly does not compensate customers on speculative and hypothetical “missed opportunities”

4) We are very aware of comments on Elitetrader.com and as you stated they are addressed accordingly.

And in plain English: InteractiveBrokers systems screwed up, malfunctioned, didn’t work, showed incorrect information and mislead the customer - and the customer will pay for it.

Guys out there might want to double-check their trading permissions have actually been processed and aren't lost on the way to some Inbox.

 

[archipus]

Quote from Ajax2004:

I put in an option order yesterday. The order was rejected, despite my account being approved for it - or so I thought. They later confirmed I wasn’t actually approved for the trade due to a problem in their compliance department.

This (lightly edited) correspondence followed. Judge for yourself:

My follow-up question to IB:

Thanks for the reply. Please address the following:

1. Why wasn’t this done before despite me submitting the request very long time [months] ago?

2. Why is the trading permissions section in the Acc Management showing I’m approved for it when I wasn’t?

3. This trade that I put in and was rejected is in profit now, how are you going to compensate me for this?

4. I’ve heard many times horror stories about IB in places like EliteTrader.com and where an IB rep had to come and explain and try to clean up the mess, I hope this isn’t going to follow the same pattern.

Thanks.

IB’s response:

1) Compliance had an issue where certain accounts who requested a trading permission upgrade did not come into their queue (Inbox). Yours was one of the affected accounts.

2) This is an unusual programming feature. I do not know why the screen is programmed to show you permissions that have not been approved. This will need to be reviewed by programmers for a firm-wide modification.

3) There will be no compensation for a speculative profit. Interactive Brokers does not guarantee approval of trading permissions and and certainly does not compensate customers on speculative and hypothetical “missed opportunities”

4) We are very aware of comments on Elitetrader.com and as you stated they are addressed accordingly.

And in plain English: InteractiveBrokers systems screwed up, malfunctioned, didn’t work, showed incorrect information and mislead the customer - and the customer will pay for it.

Guys out there might want to double-check their trading permissions have actually been processed and aren't lost on the way to some Inbox.

Well, eyalmoaz, i guess we now know of yet another thing that can go wrong.

 

[Ajax2004]

indeed. one of many.

thanks for your insightful reply ;-)

Quote from archipus:

Well, eyalmoaz, i guess we now know of yet another thing that can go wrong.

 

[Gustaf]

Two questions;

*Was this your first option trade with them?
*Would you have raised question #3 if that "trade" was in the red?

 

[Ajax2004]

1. Yes.
2. Question 3 is illogical and therefore mute in case of the position being in the red.

In any case, even taking out question 3 all together from this post and correspondence then I believe there is material information here which IB customers should feel concerned about.

Quote from Gustaf:

Two questions;

*Was this your first option trade with them?
*Would you have raised question #3 if that "trade" was in the red?

 

[powerfade]

Quote from Ajax2004:

3. This trade that I put in and was rejected is in profit now, how are you going to compensate me for this?

Unfortunately, this question useless. I understand where you're coming from and it is really frustrating when a company drops the ball and you have to pay for it. However, you know damn well that the contract you signed says that IB is not responsible for one nickel of missed profits that result from any malfunction or administrative error. You already know this - I have seen your posts and you're not an idiot.

They aren't responsible for actual losses - and so you know that the suggestion that they will compensate you for missed profits is laughable.

So by asking this you are essentially just telling them that they're assholes.

This is not going to be one of those times when an IB rep shows up and makes things right. Don't waste any more mental energy on it.

 

[Ajax2004]

Fair points, and thanks.

This was written out of frustration with the situation. And I wasn't really expecting to be compensated. This is just one small trade out of thousands and is immaterial in itself.

What is material though is that they have not only dropped the ball but also refused to take any responsibility for it initially. They offered no explanation on what went wrong, all I received was a canned reply: "You have recently applied for blah blah". That is till I put in those questions above seeing they need to be jolted about a bit.

Maybe I naively expected proper customer service from IB and didn't get it. And that's the only takeaway from this post.

Anyway, as you said, this isn't something I'm going to get hung up on, I will probably just forget about it tomorrow.

Quote from powerfade:

Unfortunately, this question useless. I understand where you're coming from and it is really frustrating when a company drops the ball and you have to pay for it. However, you know damn well that the contract you signed says that IB is not responsible for one nickel of missed profits that result from any malfunction or administrative error. You already know this - I have seen your posts and you're not an idiot.

They aren't responsible for actual losses - and so you know that the suggestion that they will compensate you for missed profits is laughable.

So by asking this you are essentially just telling them that they're assholes.

This is not going to be one of those times when an IB rep shows up and makes things right. Don't waste any more mental energy on it.

 

[powerfade]

Quote from Ajax2004:

This was written out of frustration with the situation. And I wasn't really expecting to be compensated. This is just one small trade out of thousands and is immaterial in itself.

Believe me, I hear you. I opened an account with IB this year after hesitating for a couple of years, mainly due to the horror stories I heard here.

Let's hope that a glitch doesn't result in a big loss one day. As you know, it has happened and IB isn't famous for 'fessin up. That's why they have us sign that contract.

 

[Ajax2004]

I know what you mean. Actually I've been with IB for about 3 years now and have had very few issues.

But as one of my trading buddies says: IB's commission and order types all sound great, but when I need that customer service once a year I need it pronto and I need it to be top notch.

There's no perfect broker. The CS and horror stories are part of the package deal together with the good stuff about IB. Oh yeah and also the occasional rant on ET ;-)

Quote from powerfade:

Believe me, I hear you. I opened an account with IB this year after hesitating for a couple of years, mainly due to the horror stories I heard here.

Let's hope that a glitch doesn't result in a big loss one day. As you know, it has happened and IB isn't famous for 'fessin up. That's why they have us sign that contract.

 

[Retired]

Quote from Ajax2004:

I know what you mean. Actually I've been with IB for about 3 years now and have had very few issues.

You must not be trading very much. Just keeping TWS running smoothly is a challenge for IB.