No, I am talking about IB's TWS and/or Gateway.
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When to switch to IB
- Thread starter ark93
- Start date
A couple for you:Give me an example of an arcane rule, please.
I have been trading quite a bit on their flatform, never noticeed anything like that.
They evaluate your portfolio up to 48 hours before options expiration and start autoliquidating your options portfolio if you don't have enough cash to exercise the options and buy the underlying, even if you have no intention of buying the underlying.
They evaluate each leg of a vertical spread separately for FOPs to determine the margin. Thus if you buy a vertical spread, which by definition means you can never be liable for more that the price you paid for the vertical, they still charge you margin above the purchase price.
The borrow fee for short stocks is "rounded" up to the nearest dollar. So if you have a 10% borrow fee on a stock that is trading at $1.01, you pay interest on $2.00, basically double the interest rate. If it was a $.10 stock you would pay 10X the borrow fee.
I could go on literally for pages. Do a search on this board for IB and some cursing and you'll see what I mean.
If you are doing straight up vanilla Reg-T trading of stocks I'm sure IB is just fine for you. If you're doing almost anything else it's almost inevitable that you'll run into one of these arcane rules that are unique to them and will probably loose you a lot of money with no recourse but to leave. If you've already invested time into programming with their API that hurts, my advice there from having done it is just rip off the band-aid because while you're trying to justify to yourself that "they're not that bad" you'll run afoul of a few more of these "rules". Just trying to save others the pain that involves.
A couple for you:
They evaluate your portfolio up to 48 hours before options expiration and start autoliquidating your options portfolio if you don't have enough cash to exercise the options and buy the underlying, even if you have no intention of buying the underlying.
They don't auto-liquidate 48 hours ahead of time. Or at least they don't have that policy currently. Generally it's 2 hours before market close if the account doesn't have enough margin to exercise the options.
Generally that's pretty standard for Risk departments. My firm does it 3-4 hours ahead of 4:00pm cut-off. So a lot worse than IB's.
It happened at 48 hours for me in an account that was otherwise nowhere near a margin call, so just speaking from first hand experience. Unless they've changed radically it's certainly not 2 hours, there are lots of stories on here with people getting auto liquidated lot earlier than that.They don't auto-liquidate 48 hours ahead of time. Or at least they don't have that policy currently. Generally it's 2 hours before market close if the account doesn't have enough margin to exercise the options.
Generally that's pretty standard for Risk departments. My firm does it 3-4 hours ahead of 4:00pm cut-off. So a lot worse than IB's.
As an aside, how do you have experience currently trading with IB if you work for a broker? I can't imagine any compliance dept that would go for that?
It happened at 48 hours for me in an account that was otherwise nowhere near a margin call, so just speaking from first hand experience. Unless they've changed radically it's certainly not 2 hours, there are lots of stories on here with people getting auto liquidated lot earlier than that.
As an aside, how do you have experience currently trading with IB if you work for a broker? I can't imagine any compliance dept that would go for that?
My compliance department is a bunch of idiots and life would be easier if they simply did not exist. . . We are allowed to hold outside trading accounts with another firm if its for products/strategies that my firm doesn't support. For example my firm doesn't do futures or Algos so my explanation for external trading was justified there.
Commissions are better at IB, even with my employee plan commissions at my office. I wouldn't switch to a firm that wouldn't let me maintain an external trading account unless I got an increase of 100-150k in pay.
Wow! So you can trade at another firm without pre-clearing your trades with your compliance dept? How do they ensure employees aren't front-running customer orders? It sounds like your assessment of them is pretty accurate!My compliance department is a bunch of idiots and life would be easier if they simply did not exist. . . We are allowed to hold outside trading accounts with another firm if its for products/strategies that my firm doesn't support. For example my firm doesn't do futures or Algos so my explanation for external trading was justified there.
Commissions are better at IB, even with my employee plan commissions at my office. I wouldn't switch to a firm that wouldn't let me maintain an external trading account unless I got an increase of 100-150k in pay.
My first and a half hand experience (my wife worked at the financial firm and I was bound to their rules for that reason) was a world away from that, I could only trade open end mutual funds without pre-clearance, and the pre-clearance could take a couple days. Plus the firm was set up so they got all the trade confirms in our account. And I thought they were a shit-show!
Wow! So you can trade at another firm without pre-clearing your trades with your compliance dept? How do they ensure employees aren't front-running customer orders? It sounds like your assessment of them is pretty accurate!
My first and a half hand experience (my wife worked at the financial firm and I was bound to their rules for that reason) was a world away from that, I could only trade open end mutual funds without pre-clearance, and the pre-clearance could take a couple days. Plus the firm was set up so they got all the trade confirms in our account. And I thought they were a shit-show!
They monitor my trades for sure. IB sends them my monthly account statements.
Different compliance departments have different policies. Your wife's work is among the strictest policies. Though its commonplace is stricter jurisidiction like Singapore. I'm based in Canada.
The rules for compliance in the industry are largely "principals" based as opposed to "rules" based. How a firm achieves compliance with regulations is up to them. That's why there's so much different from firm to firm.