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Is IB really that bad?
- Thread starter pbanerjee
- Start date
yeah but u would like everything disclosed on ib site not on friggin' wiki, innit.
and i still cant find anything on wiki detailing the exact interest charges for running losses in your acct and non-marginable positions. i will contact ib on monday and insist they make clear everything. if not the sec may be the only answer....it really pisses me i have to pay hidden charges that i cant comprehend and may ot may not be legal.
Quote from Bitstream:
yeah but u would like everything disclosed on ib site not on friggin' wiki, innit.
and i still cant find anything on wiki detailing the exact interest charges for running losses in your acct and non-marginable positions. i will contact ib on monday and insist they make clear everything. if not the sec may be the only answer....it really pisses me i have to pay hidden charges that i cant comprehend and may ot may not be legal.
I do not think you are right with marginable positions - if you have $1000 in cash and you purchase stocks worth of $1000 your net cash is zero and you never pay anything ever.
I agree though that tiers for account balances are a rip off but that's something IB might not change any time soon - they philosophy is to cater to day traders generating a lot of fees in commissions - not a carry trader who does one trade a week.
All this is however disclosed on IB website in as clear way as possible I think.
Quote from dhpar:
I do not think you are right with marginable positions - if you have $1000 in cash and you purchase stocks worth of $1000 your net cash is zero and you never pay anything ever.
I agree though that tiers for account balances are a rip off but that's something IB might not change any time soon - they philosophy is to cater to day traders generating a lot of fees in commissions - not a carry trader who does one trade a week.
All this is however disclosed on IB website in as clear way as possible I think.
i know i am right. there's no disputing it.
first time i noticed it was on an otcbb non-marginable position and negative accrued interested kept accumulating...same later and now with intc and c; both positions cost fully covered by what i have in my acct yet negative accrued interests keep accumulating day by day. just for this month it shows around -70 bucks for 400 shares and that's insane: around .4% a month in rates repayments for no reason.
tell u what, give it a try and buy a stock of your choice without using margins and keep it for a week or more and see what happens to your accrued interests.
Quote from pbanerjee:
Thanks for the replies...
So let me get it straight - suppose I have a margin account where I have say $1000 - and I make purchases of $900, I will still get accrued interest payments ? How is that possible ? The cash balance covers all the purchases ?
yes, in your acct window u'll see negative margins accrued interests accumulating day by day even if u have 1000 bucks in your acct and make a purchase of 900 bucks. now i cant tell for sure what the heck those charges are but it is logical to think it is rates repayments, as they fall under accrued rates. if not it still is some hidden charge not disclosed.
Thanks for the post on Wikipedia. I figured out IB very aggresively deletes negative comment posts from its forums.
I AM ALSO BIT TOO CONCERNED ABOUT TAX BLOTCHES ... CAN ANYONE SHED A BIT MORE LIGHT ON THIS ASPECT?
Quote from Bitstream:
you are charged interets rates on non-marginable positions. i haven't made the calculations to determine the exact rates but they are there. i have a couple of small positons on a two diff stocks that amount to around 400 shares: i have more than enough money in my acct to cover the full purchase costs so there are no margins expenses involved yet i am charged insane rates.
Are you saying:
1) Your account has a credit balance
2) That while you've held the ~400 shares the account has always had a credit balance
3) You have no overnight short positions
If so, there is something missing somewhere.
Here is the way I understand IB's margin calculations for equities -
IB treats non-marginable stocks as requiring the full value of the stock (or $2000 if the value of the stock is less than $2000). This means that the full value would be debited against the amount available. It would not affect your margin balance, just the loan amount available.
Could you have a credit from shorts making your account balance appear to be in a credit position? IB subtracts the short credit (marked-to-market at day's close) from your true cash position to determine the amount of the margin loan.
They compute margin interest separately for longs and shorts. Since IB pays interest on credit balances (>$10K) as if the short credit does not exist, and only pays interest on short credit balances >$100K this might explain your problem.
Jack
Quote from JackR:
Are you saying:
1) Your account has a credit balance
2) That while you've held the ~400 shares the account has always had a credit balance
3) You have no overnight short positions
If so, there is something missing somewhere.
Here is the way I understand IB's margin calculations for equities -
IB treats non-marginable stocks as requiring the full value of the stock (or $2000 if the value of the stock is less than $2000). This means that the full value would be debited against the amount available. It would not affect your margin balance, just the loan amount available.
Could you have a credit from shorts making your account balance appear to be in a credit position? IB subtracts the short credit (marked-to-market at day's close) from your true cash position to determine the amount of the margin loan.
They compute margin interest separately for longs and shorts. Since IB pays interest on credit balances (>$10K) as if the short credit does not exist, and only pays interest on short credit balances >$100K this might explain your problem.
Jack
both positions and all previous held overnite are long.
both postions are paid for in full [not margin] and still mucho money is available in the acct.
never held anything overnite besides the 2 original positions.
Quote from pbanerjee:
Thanks for the post on Wikipedia. I figured out IB very aggresively deletes negative comment posts from its forums.
I AM ALSO BIT TOO CONCERNED ABOUT TAX BLOTCHES ... CAN ANYONE SHED A BIT MORE LIGHT ON THIS ASPECT?
present proof that IB deletes "negative comment posts" from its forums.