Trading an account for someone else with interactivebrokers.

cvds, if you are only managing 1 guys account you can open a brokerage anywhere in that guy's name and set up a power of attorney. You can settle up your fees, etc. through another document. The only reason to use a IB's friends and family (or similar platform) is if you have many accounts and need to allocate trades among them as well as manage the fees between them.

If this is going to be a business (with you soliciting more clients) then get the right setup now because it will be difficult to switch later.
 
newwurldmn said:
cvds, if you are only managing 1 guys account you can open a brokerage anywhere in that guy's name and set up a power of attorney. You can settle up your fees, etc. through another document. The only reason to use a IB's friends and family (or similar platform) is if you have many accounts and need to allocate trades among them as well as manage the fees between them.
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Not sure this will work for non-US clients. I ran into trouble before doing this, they just froze the account, supposedly due to some anti-money laundering rules.
 
As to your question on limits - I don't see that in there. Looking at their KB, I can see limits for prop trading firms to restrict subordinate traders - and even there it is all in money terms - there is no explicit option to say "you can only trade CL and your position limit is X.
The only thing you can restrict otherwise is specific symbols from being traded. You can also restrict broad categories, e.g. stocks, futures, forex, etc.

As to how you are setting it up, there is no question. Use F/F account. Especially if there are cross border issues involved...
 
ok, thank you all for your replies ... I got some pm's too and I really got much wiser friends and family it's going to be ...
 
cvds16 said:
I just heard someone from Belgium that is doing it that way ... maybe depends on the country you live in ...
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You can trade someone's account like that but if they find out it's going to be closed. You may get it re-opened if you supply documents but that will take time.
 
sounds a bit unlikely to me that that was the reason things happened to you ... but I'll ask around ... but good I have a warning in beforehand ... should be no problem to provide them the documents as it's exactly what this person wants me to do: trade for him ...
 
cvds16 said:
sounds a bit unlikely to me that that was the reason things happened to you ... but I'll ask around ... but good I have a warning in beforehand ... should be no problem to provide them the documents as it's exactly what this person wants me to do: trade for him ...
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This was exactly the reason, I had no other problems or reasons for them to shut the account.
 
I know for a fact that it depends on the country you operate from, the country your investor lives in and the type of instruments you trade on their behalf. In the US, for futures trading, the CFTC/NFA have exemptions when it is for 15 qualified investors but it may not be the only requirement. Also, if you're doing this from, say, Canada, you probably have to register as a licensed Portfolio Manager in the province you operate from. It is far from free and quick. I highly doubt it is the only country to regulate this way. Of course, you may be undetected for a while. But consider what willl happen when the investor loses 15% with you. His "I have a high risk tolerance" statement will have a very different meaning and he might sue you.

Now, what does IB require to open a F&F account? A proof that you comply with applicable regulations?
 
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