Why does Interactive Brokers impose such restrictive limits for options trading?

[M.W.]

Geez, perhaps you should think first before commenting. While the simulated trading environment is a lot more sophisticated than the one of most other brokers it lacks by its very nature. This is why nobody serious about this business analyzes fill and execution quality on a simulator. They perform post trade execution analysis on production executions. The purpose of the simulator is to famiarize yourself with the different features, execution types, and platform, not to give you a realistic fill and execution environment.

Also, IB's paper account only partially fills orders, and mostly only fills upon market open and close. Which is also a sign something is amiss I would think.

 

[maxinger]

So, further to previous posts I have made in relation to my paper trading journey on IB, I am faced with yet another issue. When attempting to trade large-size options contracts, I am receiving a message informing me the order is rejected, as it is too large. Having used other paper trading platforms, I have never encountered this issue with other brokers. Why does IB impose such limits? I wonder does this only apply to simulated accounts, and it is not the case on live accounts? Between all of the 'regulatory' problems and such like, I am very unhappy that IB is my only venue to trade options here in Europe...

When doing demo trading, you are already not serious.
And you already planned to overtrade.

When you do live trading, you wouldn't be serious.
And you will definitely overtrade.

And you reprimanded IB for it.

You have the potential to be the next super Canadian crude oil day trader
who overtraded.
Luckily he didn't commit suicide.


Not a good sign mister.


______________________________________
A day trader who bought hundreds of oil contracts was told he owed $9 million after a trading-platform issue meant it failed to show oil's historic plunge below $0

• A day trader who bought hundreds of oil futures contracts during its historic price crash last month was told he owed $9 million after a technology issue prevented his trading platform from displaying negative oil prices, Bloomberg reported on Friday.
• On April 20, Syed Shah, a day trader in Canada, bought 212 futures contracts for what he thought was $0.01 each, not knowing that oil was actually trading at -$3.70 per barrel at the time, according to Bloomberg.
• The platform he used, Interactive Brokers, could not display negative prices, so Shah and other traders were oblivious to the huge drop.
• "It's a $113 million mistake on our part," Thomas Peterffy, the founder and chairman of Interactive Brokers, told Bloomberg, adding that customers who suffered losses as a result of the issue would get their money back.

 

[murray t turtle]

When doing demo trading, you are already not serious.
And you already planned to overtrade.

When you do live trading, you wouldn't be serious.
And you will definitely overtrade.

And you reprimanded IB for it.

You have the potential to be the next super Canadian crude oil day trader
who overtraded.
Luckily he didn't commit suicide.


Not a good sign mister.


______________________________________
A day trader who bought hundreds of oil contracts was told he owed $9 million after a trading-platform issue meant it failed to show oil's historic plunge below $0

• A day trader who bought hundreds of oil futures contracts during its historic price crash last month was told he owed $9 million after a technology issue prevented his trading platform from displaying negative oil prices, Bloomberg reported on Friday.
• On April 20, Syed Shah, a day trader in Canada, bought 212 futures contracts for what he thought was $0.01 each, not knowing that oil was actually trading at -$3.70 per barrel at the time, according to Bloomberg.
• The platform he used, Interactive Brokers, could not display negative prices, so Shah and other traders were oblivious to the huge drop.
• "It's a $113 million mistake on our part," Thomas Peterffy, the founder and chairman of Interactive Brokers, told Bloomberg, adding that customers who suffered losses as a result of the issue would get their money back.

%%
LIVE+ learn. Lifelong Learning.......Wow he must have used a market order entry

 

[rb7]

No broker would let you trade 200k options in real life. I don’t think a bank desk would even facilitate it for Warren buffet.

I've seen block trades of that size. It's not that uncommon.
But for a retail trader? No way Jose.

A big quantitative trading firm used to trade Complex Orders of that size using a specific schema when the underlying was going ex-div. The ratio of profit vs number of traded option contract was very small. They were trading 50, 100, 200k at a time.

 

[newwurldmn]

I've seen block trades of that size. It's not that uncommon.
But for a retail trader? No way Jose.

A big quantitative trading firm used to trade Complex Orders of that size using a specific schema when the underlying was going ex-div. The ratio of profit vs number of traded option contract was very small. They were trading 50, 100, 200k at a time.

I've seen those too in single stocks. Those are pre-arranged and carry no real risk and the notionals are far less than 80 Billion dollars.