suggestion: Mutual Fund partner for IB IRAs

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amg

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While ETFs are excellent mutual fund equivalents to use in IRAs, the ability to participate in corrective moves (ie, "short") is limited due to the "No shorting in IRAs" regulation. This is true for any IRA, not just Interactive Brokers (IB).

At present, IB allows trading only stocks, including ETFs, in IRAs. Thus one is limited only to long positions. In the present market environment, the occasional use of shorting (or in IRAs, access to inverse index funds such as Juno for bonds or Tempest/Ursa for SPX) is vital to generating better year-end returns.

Were IB to have a partnership with Rydex, for instance, access to their Benchmark and Dynamic reverse index funds would provide just that capability.

With this one idea, IB would vastly improve its ability to gain clients from brokerages already offering that access, eg, Fidelity, particularly as IB already out-scores them in fees, commissions, and innovations such as the Friends/Family Advisor.

If IB isn't already considering this, I do hope this suggestion is enough to put it into your plans for the near future.

PS- I also post this suggestion at the IB site.

I post it here to see if there are others considering an IB IRA account but are hesitant because of the lack of an inverse fund.
 
I wasn't sure who reads those posts, or how suggestions are generally made.

My experience with Fidelity in regards to suggestions has been mixed. They seem to read them, but are G L A C I A L in response and implementation. For instance, the order window didn't even allow shorting until after the major 2000 correction was over! You had to download and use their simply awful "Active Trader" program. And their fee structure isn't hard to improve upon. IB was a simple choice for my retail account.

IB has undergone some pretty extensive and on the whole radical changes of late. This one thing could make them my IRA brokerage of choice. One thing Rydex might now allow is the AM/PM trading windows. It seems direct funding with Rydex is the only way to trade the AM window, as far as I've heard. A two-trade window partnership would be ideal.

Again, thanks. amg
 
Quote from amg:

In the present market environment, the occasional use of shorting (or in IRAs, access to inverse index funds such as Juno for bonds or Tempest/Ursa for SPX) is vital to generating better year-end returns.
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You can buy puts in your IB IRA if you are bearish. Not the front month contracts that time decay can really hurts.
 
the mgmt e-mails are read by the decision makers. as I'm not based in the US, I do not have much say on these types of calls.

In the end, it comes down to client demand and naturally a cost/benefit analysis naturally taken into relation with other projects on the table.

With the IRA's as mentioned you can purchase a put. You can also enter in a put spread via the option combo order entry. Futures are another way to get short and I believe will be available in IB IRA's sometime in July.
 
Quote from amg:

With this one idea, IB would vastly improve its ability to gain clients from brokerages already offering that access, eg, Fidelity, particularly as IB already out-scores them in fees, commissions, and innovations such as the Friends/Family Advisor.
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Interestingly (at least fee-wise)

http://www.scottrade.com/commissions_main.asp

could be a better deal for both small and big accounts.

Reading their pages, they offer no-fee IRA, no-fee datafeed, no-fee mutual fund trades good for small accounts. And the $12 flat orders also could beat IBs (not-capped) fee structure for big orders.
 
I hadn't widened my thinking on brokerages. I just checked Scottrade and the offerings are much like Fido's with a fee structure that is very attractive, esp. for accounts with little activity.

The later is where IB has a weakness, IMO. Inactivity fees will add up, and in the case of Fido, incur significantly higher commissions when one does trade them, or in the case of IB, feed costs add up in a similar way. I have/manage a number of family/friend IRAs and am for the most part pretty conservative and thus potential inactivity/feed costs will pile up. Small change, but it matters.

Thanks! :)
amg
 
Quote from def:

You can also enter in a put spread via the option combo order entry. Futures are another way to get short and I believe will be available in IB IRA's sometime in July.
More...

I've attempted to enter into put spreads recently in my IRA and TWS would not allow. I sent an email to customer service and they answered that the capability was delayed and would be available at the same time as futures capability.

The good news: I notice that today is the first day that IB has the futures, futures options and SSF migration capabilities available under the "Upgrade Account Type" of my IRA account.:)
 
I would think we will be able to short futures in an IRA with IB, which would make the Rydex funds redundant. One can short futures contracts in a self-directed IRA - I really hope IB is setting up this capability.
 
Quote from Hugh G Recshun:



I've attempted to enter into put spreads recently in my IRA and TWS would not allow. I sent an email to customer service and they answered that the capability was delayed and would be available at the same time as futures capability.

The good news: I notice that today is the first day that IB has the futures, futures options and SSF migration capabilities available under the "Upgrade Account Type" of my IRA account.:)
More...

I tried to upgrade, but it didn't work.
 
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