Which sweep option for IBKR customers?

helpme_please · Jul 18, 2017

For IBKR customers who trade both stocks and futures, they need to decide which sweep option to choose. This is a headache for us. There is not much information out there for the decision.

For the time being, I choose the "sweep to securities" option because of the SIPC protection based on the document below.
https://www.indextrader.com.au/SIPC_Protection_For_IB_Clients.pdf

When would it make sense to choose the "sweep to commodities" option?

Can IB representatives on this forum help out?

HobbyTrading · Jul 19, 2017

If you want a reply from an IB rep, then you'd better ask the question directly to IB via their message system.
There used to be a possibility to select what sweep to use. But I have the impression that it is currently being done automatically for you.

Actuarial_Fun · Jun 20, 2020

Does anyone know the answer to this? I'm trying to understand the disadvantage of sweeping into securities. Given the protection, why would I ever not sweep at all or sweep to commodities? I asked IB in chat and they just posted the article from online. Thanks.

glv123 · Jun 21, 2020

I sweep to commodities account, I couldn't find certainty SIPC would insure the cash if you are not using it for trading.

belsons · Aug 3, 2020

A huge downside of leaving excess cash in the commodities segment is you do NOT receive credit interest on it.

See the Calculations tab on https://www.interactivebrokers.com/en/index.php?f=46381&p=m for more details.

HobbyTrading · Aug 3, 2020

belsons said:
A huge downside of leaving excess cash in the commodities segment is you do NOT receive credit interest on it.

See the Calculations tab on https://www.interactivebrokers.com/en/index.php?f=46381&p=m for more details.

I find that difficult to believe. You link a web page. Where on that page is it written that excess cash in the commodities account is not eligible to interest payments?

belsons · Aug 4, 2020

It's right there in the Calculations tab:

No interest will be paid on excess funds in the commodities segment (AdjustmentCashCommodities). In the event negative interest rates apply, interest will be charged on long balances in the commodities segment.

I confirmed in a message with IB that this is true:

Excess cash in the commodities segment (the amount of cash above the margin requirements) is not paid credit interest, but it is counted towards the principal for debit interest. This is why it would behoove customers actively trading commodities, with excess cash on hand, to activate the sweep to securities side. [...] This changed roughly two years ago.

HobbyTrading · Aug 5, 2020

belsons said:
It's right there in the Calculations tab:

I confirmed in a message with IB that this is true:

Thank you. I overlooked that particular sentence on that page. At the moment it does not matter much as the current credit interest rates are 0% for all major currencies (and negative in Europe). But it could be worthwhile to remember this for the future.