I wanted to get the pulse of this community about something I've been considering. For those of you who trade two very different styles -- in my case, short-term algo-driven trading, and mid-term (3-6 weeks) news-driven trades -- do you use multiple accounts? Or are you running everything through the same account? I'm considering opening a second (linked) account on IB to simplify performance testing, but haven't looked closely enough at the policies yet to see if there are potential downsides.
Multiple linked accounts for different trading styles?
- Thread starter zoned_post_meridiem
- Start date
Robert Morse
Sponsor
At Lightspeed, a division of Lime Brokerage, we clear at Wedbush Securities and we can offer Master-Sub accounts. The master holds the cash and the sub-accounts hold positions and track P/L. If you are looking to verify your returns to manage others' money in the future, a second full account, funded independently, would be a better process as it would have equity and margin constraint for just that strategy and easier to verify later. This is not as margin efficient but a better process.
I have recommended multiple, strategy-driven accounts for a while. I know of no downside, and there are multiple upsides, on a trade-by-trade, weekly, and (tax-time!) annual basis.
I use multiple accounts for different trade styles. My purpose for using multiple is largely tax related as my trading accounts are titled as an entity, where my less traded swing and investment accounts are titled as an individual(s) type.
That brings up another often overlooked aspect... FCM diversification. Depending on circumstances and amounts involved, FCM diversification might be something to consider. Of course, FCM relates to futures only.
That brings up another often overlooked aspect... FCM diversification. Depending on circumstances and amounts involved, FCM diversification might be something to consider. Of course, FCM relates to futures only.
I am having an account at IB. Within my account I hold multiple account numbers (Uxxx numbers). I use each for a different trading strategy. I prefer it this way as it allows me to monitor each of the strategies separately. I don't have to maintain my own administration to see which strategy is making money (or losing it) and to analyze correlation between the strategies. For each of these accounts will I get a separate monthly overview from IB. Market data subscriptions are shared between these accounts.
The disadvantage is that you need to fund each of these accounts and the position size within an account is limited by the account value. However, in my case is that not a bottleneck.
The disadvantage is that you need to fund each of these accounts and the position size within an account is limited by the account value. However, in my case is that not a bottleneck.