As a recent IB customer, I've been following this thread with some interest and would note the following:
- I suspect that the IB posters are under the impression that you Jayre have a basic understanding of regulations involving the separation between the proprietary trading and brokerage activities of clients (the Chinese Wall) and your questions are implying that they are willfully breaking these rules (which isn't going to endear yourself to anyone). The proprietary trading arm may or may not be realizing a profit if it takes the other side of a liquidation, but it's certainly not guaranteed as they are at the same risk of losing money as anyone else who may be on the other side of that liquidation. To imply that the trading side is aware when a client liquidation is underway and/or trading at a price which is more advantageous than any third party is ill-informed and not something that a reputable broker would do, nor could they do it for long as this activity is closely monitored in the course of regulatory examinations. It also exhibits a lack of understanding as to how a global market maker trading multiple securities manages its book as they're not likely looking at trading decisions based upon a single stock but rather at a basket level. Therefore, you're question as to whether they profit or not is indeterminable as it may be part of a hedge or offset against another position.
- I think it's reasonable to assume that clients read their account agreements before signing and while IB's agreements provide them with broad discretion to liquidate positions when your account is no longer meets the maintenance margin requirement, they are not shy about making that clear either in the agreements or website. Looking at the history of your comments Jayre in which you continuously complain about this policy, one has to question whether you actually read the agreement beforehand (shame on you if you didn't). In any event, if you're so dissatisfied why are you still with IB as your posts indicate? I doubt you're going to change this policy and you hurt your credibility by not simply moving on as any other rational individual would do. It also suggests perhaps that there's another agenda going on here (competitor bashing?).
- One of the things that's been made clear through this MF Global fiasco is that while customer assets are supposed to be segregated from firm assets (if the broker is on the level), they are not segregated from each other. The quickest way for a customer to lose money aside from his/her own trading activities is from other customers who, through margin lending, lose more money than they have available and which the firm's capital is insufficient to cover, thereby exposing one client's assets to those of another as the assets have been collectively pledged to other banks, brokers or clearinghouses. I'm comfortable controlling my own exposure but am not so comfortable with the behavior or knowledge of others which is why I feel comfortable with a broker such as IB who through protecting their own capital, protects my assets as well.
- I suspect that the IB posters are under the impression that you Jayre have a basic understanding of regulations involving the separation between the proprietary trading and brokerage activities of clients (the Chinese Wall) and your questions are implying that they are willfully breaking these rules (which isn't going to endear yourself to anyone). The proprietary trading arm may or may not be realizing a profit if it takes the other side of a liquidation, but it's certainly not guaranteed as they are at the same risk of losing money as anyone else who may be on the other side of that liquidation. To imply that the trading side is aware when a client liquidation is underway and/or trading at a price which is more advantageous than any third party is ill-informed and not something that a reputable broker would do, nor could they do it for long as this activity is closely monitored in the course of regulatory examinations. It also exhibits a lack of understanding as to how a global market maker trading multiple securities manages its book as they're not likely looking at trading decisions based upon a single stock but rather at a basket level. Therefore, you're question as to whether they profit or not is indeterminable as it may be part of a hedge or offset against another position.
- I think it's reasonable to assume that clients read their account agreements before signing and while IB's agreements provide them with broad discretion to liquidate positions when your account is no longer meets the maintenance margin requirement, they are not shy about making that clear either in the agreements or website. Looking at the history of your comments Jayre in which you continuously complain about this policy, one has to question whether you actually read the agreement beforehand (shame on you if you didn't). In any event, if you're so dissatisfied why are you still with IB as your posts indicate? I doubt you're going to change this policy and you hurt your credibility by not simply moving on as any other rational individual would do. It also suggests perhaps that there's another agenda going on here (competitor bashing?).
- One of the things that's been made clear through this MF Global fiasco is that while customer assets are supposed to be segregated from firm assets (if the broker is on the level), they are not segregated from each other. The quickest way for a customer to lose money aside from his/her own trading activities is from other customers who, through margin lending, lose more money than they have available and which the firm's capital is insufficient to cover, thereby exposing one client's assets to those of another as the assets have been collectively pledged to other banks, brokers or clearinghouses. I'm comfortable controlling my own exposure but am not so comfortable with the behavior or knowledge of others which is why I feel comfortable with a broker such as IB who through protecting their own capital, protects my assets as well.