Yes, IB is such a case.
risks associated w/ self-clearing brokerage firms
- Thread starter fvicks
- Start date
IB is associated with or owns the market making firm TimberHill - symbol TMBR on Level 2. I imagine they send all orders to TMBR whenever possible, probably does not help the fills...
def
Sponsor
you're so wrong and obvioulsy haven't read any of the info readily available on this subject on this forum or on the IB web site.
in short, IB will only route internally to TMBR if and when it can match or improve the NBBO. In such cases executions are turned around in milliseconds. next time before you try to bash IB, do some homework - you're batting 0 for 2 now.
Not my intent to bash IB.
however, under threads like this I notice almost 1 in 6 topics involve IB issues (even if these issues are unfounded)! Flip throught the pages and count:
http://www.elitetrader.com/vb/forumdisplay.php?s=&forumid=2
Perhpas the company should work to address these issues for their clients, so the clients do not have to ask the questions on here! IMO. I'm serious.
Topic headings from the first 3 pages in the above link
-----
Come on IB, improve your Level II
using firewall with ib
Does IB charge any fee for International wires out?
Traders using IB
Here We Go Again with IB
IB blank screen today
Problems with IB option quotes
however, under threads like this I notice almost 1 in 6 topics involve IB issues (even if these issues are unfounded)! Flip throught the pages and count:
http://www.elitetrader.com/vb/forumdisplay.php?s=&forumid=2
Perhpas the company should work to address these issues for their clients, so the clients do not have to ask the questions on here! IMO. I'm serious.
Topic headings from the first 3 pages in the above link
-----
Come on IB, improve your Level II
using firewall with ib
Does IB charge any fee for International wires out?
Traders using IB
Here We Go Again with IB
IB blank screen today
Problems with IB option quotes
There are big capital, regulatory, manpower etc. barriers to entering the broker/dealer business as a self clearing BD.
Many new BDs outsource this function in the beginning. If they are successful as a BD and their daily order flow increases this outsourcing cost can represent a LOOOOOOT of $$$$$$$$$$$$$$$$$$$.
Often a successful Broker/Dealer will choose to vertically integrate the clearing functions in house once they have the capital, manpower, etc. One of the biggest risks, IMO, comes from the trading the firm does with customer's (YOUR) credit balances.
I believe one of the main reasons for the PDT rules is that the BDs can trade customer credits at 10 to 1 in the firm account if the credit is not free for the customer to trade.
PDT rules can really increase customer credits that are locked from trading by the customer but not the BD.
If you believe the PDT rules really have ANYTHING to do with protecting the customers, the public, then HARVEY P. and the SEC CO probably have some more good stories about the fairness of new issue distributions they would like to tell you at bedtime!!!!
But don't fall asleep on your stomach!!!!!
Many new BDs outsource this function in the beginning. If they are successful as a BD and their daily order flow increases this outsourcing cost can represent a LOOOOOOT of $$$$$$$$$$$$$$$$$$$.
Often a successful Broker/Dealer will choose to vertically integrate the clearing functions in house once they have the capital, manpower, etc. One of the biggest risks, IMO, comes from the trading the firm does with customer's (YOUR) credit balances.
I believe one of the main reasons for the PDT rules is that the BDs can trade customer credits at 10 to 1 in the firm account if the credit is not free for the customer to trade.
PDT rules can really increase customer credits that are locked from trading by the customer but not the BD.
If you believe the PDT rules really have ANYTHING to do with protecting the customers, the public, then HARVEY P. and the SEC CO probably have some more good stories about the fairness of new issue distributions they would like to tell you at bedtime!!!!
But don't fall asleep on your stomach!!!!!
comment on Velocity Futures in this topic's regards?
I take it VF is self-clearing? Where are their clients' funds kept, and how safe are those from misuse? Any possibility that VF could go under? ( I am asking as I am worried how stable they might be with USD 500 margin levels for their mini products once a market shock occurs).
Comments by VF reps are also welcome.
I take it VF is self-clearing? Where are their clients' funds kept, and how safe are those from misuse? Any possibility that VF could go under? ( I am asking as I am worried how stable they might be with USD 500 margin levels for their mini products once a market shock occurs).
Comments by VF reps are also welcome.
They are leaving a huge short-list inventory behind....
Tradestation has been bent in developing their brokerage business for the last few years, when IMHO they should have capitalized on their dominant software product...
Their management has screwed up so many times in the last few years, I often wonder how they survive. From their pricing plan to their choice of Future's feeds.....what a bungle....
Somebody with the market share that they enjoyed with their software for traders....should be much farther along than they are now....
Michael B.
Tradestation has been bent in developing their brokerage business for the last few years, when IMHO they should have capitalized on their dominant software product...
Their management has screwed up so many times in the last few years, I often wonder how they survive. From their pricing plan to their choice of Future's feeds.....what a bungle....
Somebody with the market share that they enjoyed with their software for traders....should be much farther along than they are now....
Michael B.