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Interactive Brokers - experiences and opinions

  • #1
  • First Post: Jan 14, 2006 8:58am Jan 14, 2006 8:58am
Guys and fellow traders, I need everyones' opinion about Interactive Brokers...I am on the website right now and I can see that it's just the perfect choice...With only $2000 minimum balance to start an account, and with a great ALL IN ONE account in which you can trade stocks, options, futures, forex and bonds, this is more than great...

Commissions are great as well..I have read over here that you need to have a minimum of $25k to be able to trade forex, but on their website, they state that the leverage for AUD,CAD,EUR,GBP,CHF,USD is 50:1, so you can actually trade mini-lots if you have an account of $10-$15k...

I am asking about them because I have been flooded lately by a quantity of people from my family and friends who want to invest money in the financial markets and they want me to manage these amounts..The Global account of IB is just the perfect fit for this, I will be able to fund the account with $15k-$20k, and manage and diversify the risk between different instruments...This would be really great, and with low commissions as the ones they are offering, profits won't be eaten as with other brokers...

Please, I want comments about IB from everyone, even if you haven't used them, tell me what you heard about them...


Thanks,

Nader
  • #2
  • Jan 14, 2006 10:39am Jan 14, 2006 10:39am
If I am not wrong,minimum order size for forex is $25,000, right?
  • #3
  • Jan 14, 2006 10:48am Jan 14, 2006 10:48am
I am emailing them for this issue?? Is it the minimum lot size of $25,000 or you should have a minimum equity of $25,000 to be able to trade forex in the first place...The examples on the website are a little bit confusing..


Thanks,

Nader
  • #4
  • Jan 14, 2006 1:25pm Jan 14, 2006 1:25pm
I use interactive brokers and am very happy with them. Their software (TWS) does not function like a standard "forex" trading software. There is no "lot", you simply enter the amount to trade (minimum is 25K). They do not charge a "spread" on the buy, you simply pay .00002 * trade amount or a minimum of $2.50USD.

They are great.
  • #5
  • Jan 14, 2006 1:49pm Jan 14, 2006 1:49pm
i dont trade forex with IB (yet), but i can tell you for futures and stocks they are A+++++++. i dont see why forex would be any different.

their platform is kind of dated, but it does the job. their commissions are the best in the industry.
Relax and be happy.
  • #6
  • Jan 14, 2006 2:19pm Jan 14, 2006 2:19pm
Quoting merlin
i dont trade forex with IB (yet), but i can tell you for futures and stocks they are A+++++++. i dont see why forex would be any different.

their platform is kind of dated, but it does the job. their commissions are the best in the industry.
is the A+++++++ a censored "Assh+++s"?
  • #7
  • Jan 14, 2006 3:37pm Jan 14, 2006 3:37pm
Quoting merlin
i dont trade forex with IB (yet), but i can tell you for futures and stocks they are A+++++++. i dont see why forex would be any different.

their platform is kind of dated, but it does the job. their commissions are the best in the industry.
Well, I am comparing IB, TradeStation and Ameritrade for the account I mentioned in the first post of the thread...I will mostly need stocks and options, maybe futures in the future, but I don't think I will need forex trading for that account as the money owners don't like the idea of high risk/reward, they want some sort of safe investment and trading, that's why I am excluding futures for the time being...

Ameritrade is great...I already have an account with them, and their stocks and options trading is excellent, customer service is excellent and commissions are in the middle ($10.99 + $0.75 per contract, way too high relative to IB, but I know the company and I traded with them before)...

Tradestation is one of the best, I know...Their commissions are excellent as well regarding the stocks and options as well as the futures..

The idea of the universal account is the real edge for IB, that's why I am asking about them...

I am considering TradeStation strongly, just to get along with one of the best, although I am still in the comparison phase...There are many things yet to be compared, margin requirements for options trading (This will be a real differentiator), execution, phone execution and so on...

The real thing that I don't like regarding IB is that they say they charge fees for changing or cancelling an existing order, I can't understand why they do this, it is supposed to be free of charge, I do it all the time with ETrade, I even cancel the order or change it 10 times in less than an hour, no problems, no charges....

More ideas and comments please everyone


Thanks,

Nader
  • #8
  • Jan 14, 2006 4:27pm Jan 14, 2006 4:27pm
Quoting narafa
margin requirements for options trading (This will be a real differentiator)...

The real thing that I don't like regarding IB is that they say they charge fees for changing or cancelling an existing order, I can't understand why they do this,
margin requirements are exactly the same for both of them (on options). are you looking to sell options narafa? if you are only buying, there is no margin needed.

as for the cancelling of orders, that is an exchange thing, not an IB thing. you will get charged that no matter where you trade. the rule is that you can cancel 4 orders for each order that is executed, or something like that, i dont know it for sure. the cancellation charge is a pain in the ass, thats for sure.

one big advantage that IB has over TS is the interest you are paid on your margin money. TS pays like 1%, while IB pays around LIBOR - 0.5% on your balance over 10k.
Relax and be happy.
  • #9
  • Jan 14, 2006 4:31pm Jan 14, 2006 4:31pm
Quoting narafa
The idea of the universal account is the real edge for IB, that's why I am asking about them...
this was the original appeal for me as well. but once i got to trading with them, i realized there are a million more reasons they are the best broker.
Relax and be happy.
  • #10
  • Edited 5:00pm Jan 14, 2006 4:53pm | Edited 5:00pm
Quoting merlin
margin requirements are exactly the same for both of them (on options). are you looking to sell options narafa? if you are only buying, there is no margin needed.

as for the cancelling of orders, that is an exchange thing, not an IB thing. you will get charged that no matter where you trade. the rule is that you can cancel 4 orders for each order that is executed, or something like that, i dont know it for sure. the cancellation charge is a pain in the ass, thats for sure.

one big advantage that IB has over TS is the interest you are paid on your margin money. TS pays like 1%, while IB pays around LIBOR - 0.5% on your balance over 10k.
Ya Merlin, I am looking for margin requirements because I am intending to include selling naked options for this account...Apart from selling naked options, I don't care for the margin as I don't buy stocks on margin...

Actually I would combine several strategies for this account, selling naked calls and puts, as well as long stock positions hedged with long put options for 1+ year timeframe investments and some other complex options strategies which MUST require low options commissions...

I guess all stocks and options brokers use the same margin formula (With little changes) for selling naked options, although I am really pissed off ETrade as they don't allow selling naked calls unless you have a minimum of $50,000 in equity...

Another thing that really sucks with almost all brokers is that the formula they use looks like this (Option Premium + (0.2 x Underlying Market Value) - (OTM Amount)) x 100 or Multiplier, this is the formula for just 1 contract, you then multiply by the number of contracts you want to sell...The problem is that almost all brokers calculate the premium as the last sale price of the option under investigation and not the actual premium you are going to receive...For example, yesterday I faced a rejected naked puts selling from Etrade because the last trade of the put was 1.85, although the bid was 0.3 and the ask was 0.5...I wasn't able to initiate a 12 contracts sale because of this and I was forced to sell only 10....They realized that I have plenty of margin to open double this quantity with comfort after a complete 24 hours ...It really sucks...

Well, the interest issue is not a concern, it doesn't matter to me as mostly there will be no cash to earn interest it will be almost always tied up in positions...lol...


Thanks,

Nader
  • #11
  • Jan 14, 2006 5:03pm Jan 14, 2006 5:03pm
I have been using IB and Tradestation for my futures trading. Commision rates are about the same. IB platform does not support a trailing stop as part of a bracket order. Tradestation allows the trailing stop exit as part of a bracket order. Tradestation does not have gtc order but IB does. IB during non-NY trading hours only supports the native orders of the exchange you are trading on. For example, if you have a stop order and eCBOT does not support it and the stop is hit in the middle of the night -- it will not be filled. Hope that makes sense. If you have multiple positions with the same futures symbol and different limit/stop exits, the tradestation platform can be confusing. IB seems to handle that much better on their universal platform.
  • #12
  • Jan 14, 2006 5:18pm Jan 14, 2006 5:18pm
Thanks a lot malagiri for the valuable information...This is really something which I would have never known unless I actually traded with both brokers


Thanks,

Nader
  • #13
  • Jan 15, 2006 10:22am Jan 15, 2006 10:22am
Merlin I have read over some other forums that the customer service and the platform outages are what everyone else is complaining about....Actually I read around 100 reviews, and they all seemed to badly rate reliability and customer support..Have you experienced any of these things while trading with them ???


Thanks,

Nader
  • #14
  • Jan 15, 2006 1:16pm Jan 15, 2006 1:16pm
Quoting narafa
Merlin I have read over some other forums that the customer service and the platform outages are what everyone else is complaining about....
ive never experienced a platform outage. however, i dont have the platform open all the time like i do with TS. i use IB as my speculative account and only open the platform when i need to make a trade (maybe four times a week at most). i basically just use IB to execute orders, nothing more. TS is my workhorse that i am on everyday, doing my research and trading mechanical systems.

as for customer service, i dont know cause ive never contacted customer service. there website is so jam packed with info that i always find my answers there. im generally not a customer service kind of guy because the people who pick up the phone at brokerage houses are not the people i want to get my info from
Relax and be happy.
  • #15
  • Jan 15, 2006 2:13pm Jan 15, 2006 2:13pm
Quoting merlin
ive never experienced a platform outage. however, i dont have the platform open all the time like i do with TS. i use IB as my speculative account and only open the platform when i need to make a trade (maybe four times a week at most). i basically just use IB to execute orders, nothing more. TS is my workhorse that i am on everyday, doing my research and trading mechanical systems.

as for customer service, i dont know cause ive never contacted customer service. there website is so jam packed with info that i always find my answers there. im generally not a customer service kind of guy because the people who pick up the phone at brokerage houses are not the people i want to get my info from
Well, this leaves me with Trade Station...I have just ran through their website and watched some of the tutorials...The platform looks great, loaded with features which one would never have dreamt of...No wonder that you are long the stock of Trade Station These guys are really the best on the planet as everyone says...Nothing is perfect as they say, but at least I found almost everything I need to use there, and that's pretty enough for me...

As to the customer service, I totally agree...Usually the guy over the phone won't be of any help in 90% of the cases, but there are some silly issues sometimes which those guys can help fix out....For example I was wiring money electronically out of my ETrade acocunt once and the website did a great job and correctly identified the Bank through the Swift code, but when I initiated the transfer it said that electronic transfers to this specific bank are not allowed electronically That's why I am hating ETrade more and more everyday...

Thanks for the assistance Merlin and I wish to see more opinions from other members


Thanks,

Nader
  • #16
  • Jan 18, 2006 9:04pm Jan 18, 2006 9:04pm
I recommend InterActive Brokers [www.interactivebrokers.com] as one of two houses I would trade futures through in 'Vegas Wealth Builder'. They are big, safe, and have the lowest commission round-turn I have found. A round-turn commission on Globex forex futures is $6.00 with no minimum monthly volume levels. Since most futures spreads are 1 pip, it is cheaper than spot forex and no commissions [since house spread is usually 3 pips].

I have never heard of anyone having a problem with them.
vegas
  • #17
  • Feb 2, 2006 10:37am Feb 2, 2006 10:37am
I'm not familiar with futures. Started trading Fx with MM. IB seems very tempting.

How does it works? Do you need to trade a minimum of 10,000. What is the leverage?
  • #18
  • Feb 2, 2006 11:27am Feb 2, 2006 11:27am
but you can,t trade cfd on Interactive Brokers
on saxobank you can
  • #19
  • Feb 2, 2006 10:59pm Feb 2, 2006 10:59pm
Quoting vegas
I recommend InterActive Brokers [www.interactivebrokers.com] as one of two houses I would trade futures through in 'Vegas Wealth Builder'. They are big, safe, and have the lowest commission round-turn I have found. A round-turn commission on Globex forex futures is $6.00 with no minimum monthly volume levels. Since most futures spreads are 1 pip, it is cheaper than spot forex and no commissions [since house spread is usually 3 pips].

I have never heard of anyone having a problem with them.
I'll second that. The spreads on Eur/$ were running 0.5 to 2 pips yesterday and the execution is very quick. TWS is a very comprehensive trading platform and in addition to that you can use a free charting package called Quotetracker which is superb.

steve
I was here, here I was. Was I here? Yes I was!
  • #20
  • Feb 3, 2006 2:46am Feb 3, 2006 2:46am
You need a minimum of 25k account with IB, right?
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