Interactive Brokers min 100 shares NYSE

T

tntneo

Moderator
sorry to write this in a new thread, but I tried to reply in the original thread without success.
Considering the member really wanted the answer I post it here...

With IB when you buy there is a minimum 100 shares. That's hardcoded in the software. This is on a specific request from NYSE/AMEX which was complaining about people sending limit orders with odd lots.

I am not working for IB, I'm a customer, and indeed NYSE sent me a complaint through IB [I was testing buying odd lots of QQQ].

Of course you can order odd lots with Island, but my test was using the automatic routing from IB, which directed to NYSE I suppose.

You can sell any number of shares though.

NYSE requests that you use market orders if you want odd lots execution. That should be OK for buy and sell, but IB took the safe way.

I can live with that. I would not like my account closed because IB is very good for listed stocks [and futures, I guess options also], although less good for Nasdaq because of difficult manual routing [and no level II].
Again, I don't mind the restrictions and 100 shares lot.
If someone can not buy 100 shares min, he should not trade. If he is trying expensive stocks, OK, that can be a good reason, but then, trade less expensive stocks, odds are you can not afford to trade the pricy ones.
 
tnteo :
I was aware of this restriction for the Q's.
It is stated on IB's website since quite a while that Q's and ML holders can only be traded in lots of 100 shares. But they are traded mainly on the AMEX.

see "products"

"*USD 0.01 per share with a USD 1.00 minimum.
**BBH, HHH and QQQ orders must be 100 shares or more."

What about other NYSE/AMEX stocks ?
Never was informed that this restriction is valid for all NYSE and AMEX stocks.
( haven't tried to buy less than 100 shares/lot up to know - so I don't know )

 
Not everyone who trades odd-lots is a small trader who "shouldnt be trading". If you have an account size of 30k or less it may be very benificial to trade odd-lots in order to handle risk. It doesnt mean you only trade 70 or 30 shares, but maybe 130, or 250. If you have an account size of 50k or less, rounding lots, even in medium priced equities could through your risk off by as much as a full percentage point. (risk in overall capital should be set with position sizing, not changing your stop-price in a trade)

On the other hand, I've noticed that people who feel they need to trade round lots are a bit more likely to be rookie traders. They feel if they trade 500 shares they are more important than someone trading 450, or even 575... They also can more easily count profits in there head.

IB has told me that they will re-instate odd-lot trading on listed issues in the future. Exactly when, they would not tell me.
 
jmcgraw,

Do not be offended about me saying 'should not be trading'. My trading account is not big and I keep it that way [sweeping profits out].
You are right, it would be nice to trade odd lots for money management reasons, I respect 150%.
However, IB is not a broker for that. Not anymore at least.

Privateer, the restriction is for ALL Nyse and Amex stocks. This is a regulation issue, not a software problem with IB [I used to trade odd lots].

By the way, with a small account, jmcgraw, odd lot was nice for scaling in and out.
My remark about 'should not be trading' is someone trying to daytrade with 50 shares of JNPR because his account is too small. It does not sound like a good idea to me..
 
tntneo,

I can understand what your saying. And I supose I agree.

As for IB's rule, privateer is correct, the commission scheduale at IB is misleading. I opened an account only to find out odd-lot trading in listed issues wasnt allowed. I immediately closed the account because that just doesnt fit with my money management style, and the fact that I mainly trade only nyse issues. If I would have seen this on the scheduale, I would never have opened the account.

 
Well, I guess, trading options or leaps instead of odd-lots of the underlying itself could be an alternative.

With a comission of only 1.95$/Contract and IB's excellent option-trade executions, this would make sense to me.
At least for those stocks who are optionable.

Money management :
By applying appropriate option strategies, you can limit your risk substantially vs. an outright purchase / short-sale of the underlying.

Otherwise, if you don't like options for any reason and want to diversify & position-trade with a small account, you might even consider to open an account with

foliofn.com

http://www.foliofn.com

It's in a way similar to trading mutual funds, but rather than buying an unknown portfolio, you can build "your personal fund" or stock-basket from more than 3000 stocks.
You can buy or sell your basket either in number of shares/stock or in fixed $ amounts (allowing you to have even fractions of shares in your account ).

This is not for daytraders, because you can buy and sell your baskets only in 2 time-windows per day. But you pay only a flat fee of 29.95$ a month or 295 $ a year for as many transactions in your baskets as you want. The fee includes 3 personalized baskets ( folios ) of up to 50 stocks/basket per account.
Additional folios are available for 9.95$ a month.

For a position-trader who trades in time-frames of say 1 day to several weeks, using i.e. sector-rotation strategies, this could be an alternative to regular brokers.






 
Just for the records :

this is what I got today as reply on my request concerning odd-lot trading with IB :

"Dear Trader,
We are not trading odd lots in listed stocks anywhere right now.
This only temporary though, and we should announce something
soon.
Thanks,
IB Customer Service"


 
Privateer,

So they told you "SOON"? Hmmmmm. That an improvement. When I asked them, they said "in the future", I then pressed them on that and they said that "it probably WONT be very soon".

Once they do, I'll wire my money right over, RIGHT AWAY.


 
From IB's website :

ODD LOT ORDERS
In response to NYSE rulings regarding odd lot orders (less than 100 shares), Interactive Brokers will no longer allow customers to submit odd lot orders in NYSE listed stocks except to close out an existing odd lot position.

There are no restrictions regarding odd lot trading for Nasdaq stocks, and Interactive Brokers will allow both opening and closing odd lot orders in all Nasdaq stocks.


For more information, please contact the IB Help Desk at ...

 
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