IB: The Party Is Over

def said:

> rfoulk,
> i don't see how you can claim IB doesn't want you business.
>
> First: it states 25% margin after sept 28. In my book that's 4:1.
>
> Second: it states that it is regulated by NYSE rules. The other
> brokers may not be. However, it is waiting for a guidance paper
> from the NYSE moving on.

You missed the point, def.

IB has made a decision to enforce 3-day clearance delay over their previous 0-day. This has nothing to do with the new margin rules and other brokers are still providing 0-day.

Let's see ... can't trade at all with IB anymore due to choices they've made. Other brokers aren't being this stupid. Hmm ... what to do?

We don't all have $25K+ to trade with. (Stats that I've read say that the majority of traders don't.) And I'm not interested in risking that much capital at this point anyway.

IB has been a great service up to this point. Now they seem to have some strange priorities that aren't compatible with mine. Perhaps their latest actions are somehow related to those nutty ideas about trailing stops that they voiced recently.

Perhaps they're suddenly more interested in `saving the world' than providing their clients with what they need. If I owned stock in IB this would be the indicator to sell immediately. Something has become more important than profit and service to the customer.


Richard
 
Richard,

Simply put, I recommend switching to a low-cost direct access broker that does allow daytrading in a cash account (i.e. has real-time buying power). If you are trading small size, you need low commissions. Datek is probably the best option; it is not regulated by NYSE so does not need to be overly cautious about not allowing its customer base to daytrade in a cash account.

Switch back to IB if it receives non-adverse clarification from the NYSE. In the event of adverse clarification, IB will obviously lose its sub-$25k customer base to firms like Datek.

Regards/ Candle
 
richard,
candletrader hits the point. IB is regulated by the NYSE. It simply has No Choice until the NYSE issues guidelines.

There firm is in no way happy about these rules. It would love to keep your business. However, it would be insane to risk regulatory sanctions that could affect other parts of the business. I can't state this enough to get the point through. Wait till the dust settles. If the NYSE will allow auto-updates of buying power, then I am confident IB will return to the way it used to do business. The rule was posted to you in the mailing earlier today. It seems pretty straight forward to me.

(BTW, financial statements are published on the web site each quarter. the firm is private but you be the judge. other than stating that the firm makes money I will say that things are going well and I expect them to continue to do well).
 
def said:

> richard,
>
> candletrader hits the point. IB is regulated by the NYSE.
> It simply has No Choice until the NYSE issues guidelines.

That's a problem which IB needs to fix.

>
> There firm is in no way happy about these rules. It would
> love to keep your business. However, it would be insane
> to risk regulatory sanctions that could affect other
> parts of the business. I can't state this enough to get
> the point through. Wait till the dust settles. If the
> NYSE will allow auto-updates of buying power, then I am
> confident IB will return to the way it used to do business.
> The rule was posted to you in the mailing earlier today.
> It seems pretty straight forward to me.

The first notice IB provided about these problems made it sound like the new rules where a good thing. Why aren't they campaigning against these rules?

>
> (BTW, financial statements are published on the web site
> each quarter. the firm is private but you be the judge.
> other than stating that the firm makes money I will say
> that things are going well and I expect them to continue
> to do well).

According to various stats, the under $25K traders are quite likely the main profit center in IB's equities section. So next quarter's statement will probably show that things aren't going so well anymore.

If IB would do the right thing and contest these absurd rules then I'm sure their customers would be more than happy to back them up.

What are they waiting for?


Richard
 
richard,
as a member of the NYSE there is not much you can do except renounce your membership. If you look at program trading stats, IB is typically in the top 5 of program traders (50-150 million shares per week http://www.nyse.com/marketinfo/programtrading.html ) thus I would not expect the membership to be revoked.

IB did send comment letters and try its best to oppose the rules. I'm not sure where or why you get the impression that the firm is for the new rules. all NYSE members must follow the rules - no exception. The comment letter can be found at:
http://www.interactivebrokers.com/download/comment7.pdf

you'll have to check next quarter to see if your suspicions are correct. no need for me to bother commenting on it.
 
this is beaten to death.. bored... :eek:

If by now, a trader doesn't know what to do, he's really in trouble.
There are many people able to read in the future here, it's great.. they should trade too :D
at IB or elsewhere I don't care anymore after 15 pages in this thread alone. With these kind of emotions I suspect trading must be very difficult to you (sorry, I am reading in your business, just like you can read in IB's).

Def shows a lot of patience after weeks of these. He might be a better trader than I.
 
def said:

> richard,
>
> as a member of the NYSE there is not much you can
> do except renounce your membership. [...]

What about continued protests, direct, in the courts and in the
media?

What about a letter-writing campaign through their clientele?

What about an online petition to stuff the new rules back into the
deranged head they sprang from in the first place?

> If you look at
> program trading stats, IB is typically in the top
> 5 of program traders (50-150 million shares per week
> http://www.nyse.com/marketinfo/programtrading.html ) thus I
> would not expect the membership to be revoked.

So they can afford to rock the boat a bit.

>
> IB did send comment letters and try its best to oppose the
> rules. I'm not sure where or why you get the impression that
> the firm is for the new rules. all NYSE members must follow
> the rules - no exception. The comment letter can be found at:
> http://www.interactivebrokers.com/download/comment7.pdf

The first notice I received from IB parroted the absurd argument from
the new rules -- about protecting the trader from himself -- with no
other explanation or rebuttal. Thus appearing to agree with them.

And in the IB `Day Trading FAQ' it says:

. What can IB do about the SEC's approval of the new US
. stock day trading restrictions?

. Nothing. IB filed comments in opposition to the proposed
. rules, but as a broker-dealer regulated by the SEC and a
. member of both the NYSE and NASD, IB is subject to the new
. day trading rules.

IB could be mounting a campaign to reverse these absurd rules. The whole
world seems to agree they are discriminatory, counter-productive,
contradictory and illogical.

So why are they sitting on their butts doing nothing when corporate
profits, customer livelihoods and basic marketplace freedoms are at stake?

Perhaps this is why I get the impression IB is for the new rules ...

Please prove me wrong!

Why in the world don't all the discount brokers band together and take
this mess to the courts!? A freshman lawyer with a paper fan could blow
holes in these new rules without trying.

>
> you'll have to check next quarter to see if your suspicions
> are correct. no need for me to bother commenting on it.

Good chance I'll be trading with someone else by then.


Richard
 
I agree with tnt,

Traders with under 25K need to...

QUIT YOUR WHINING!!!!!

It's a done deal. What don't you understand??

Quit beating this dead horse.

Stop your griping and go over to Cybertrader or Datek...(or whatever, I dont care)

Ticket charges are a bit higher but your bigger problem is solved...

YOU GET TO DAYTRADE STOCKS!

Noone can predict what will happen in the ensuing months, you'll have to wait and see what 'pans out'.

In the mean time, your immediate solution is obvious.

Get it together fellow traders.




:cool: :cool: :cool: :cool: :cool: :cool: :cool: :cool:
 
The surprising thing is traders that don't mind the $25K minimum don't understand that they are at risk too.

The SEC just broke new ground and broadened their powers with these new rules. This is the first time anyone thought that protecting brokers or traders from themselves was a necessary or reasonable thing for them to do.

So what's next? Raise the minimum to $50K? Several senators where lobbying for just that!

You guys are next.


Richard
 
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