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Interactive Brokers - experiences and opinions

  • #561
  • Sep 3, 2014 9:08am Sep 3, 2014 9:08am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
Quoting naizarak
oh jeez that's bad news for scalping. why is finding a decent broker so difficult for US customers. every one i've looked at had some major issue that kept me from opening an account
Unless you regularly trade in millions of dollars, the variance Mevo pointed out is only going to amount to single digit differences in your profit/loss. With the narrow spreads and $1-$2 commission per trade and the speed of order execution, you'll be hard pressed to find a better alternative than Interactive Brokers. I've heard from some American colleagues that are quite satisfied with Oanda's spreads and order execution speed, provided you're strictly interested in FOREX trading as they stopped offering commodities last month and they've never offered stocks, etc.
You can always make money tomorrow provided you don't lose it today.
  • #562
  • Sep 3, 2014 9:41am Sep 3, 2014 9:41am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
I was pleased to see $50 of the missing $100 dollars returned to my cash balance when I logged in this morning, then at 8:30 a.m. EST, notable because that's the end of overnight maintenance requirements and the beginning of day maintenance, though my unrealized profit/loss was up $30 (no realized P&L changes) my cash balance dropped $20 -- so much for that returned $50. An hour and a half later my unrealized profit/loss is up another $30 as is my cash balance. Being Wednesday I'd rather expected most of the borrowed amount it to be returned by now with a complete balance by Thursday as it's seldom gone for more than a week.

Except for the "borrowed" money issue, the cash balance, net liquidity, and available funds are all updated regularly (every time you make a trade and at least once every five minutes) and have always proven to be accurate, as have trade amounts. If they would just "borrow" the money like a bank rather than ...whatever it is they're doing all would be well.
You can always make money tomorrow provided you don't lose it today.
  • #563
  • Edited 1:40am Sep 5, 2014 12:19am | Edited 1:40am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
We've discussed total accrued interest amounts being deducted from daily cash balances before, usually to be returned to the account later, but that hasn't happened for several months. The September 4th reports aren't ready yet, but my cash balance has further dropped exactly the amount of my total accrued interest at the same time that the monthly accrued interest total is zeroed out which seems like more than a coincidence.

Having exited all but my gold long at 3 p.m. EST yesterday the math is very simple considering gold is sitting at the exact same dollar amount right now, as is the unrealized profit/loss (obviously), as is USD/CAD (the only relevant exchange rate) right down to the half pip. The only change is the monthly accrued interest total amount has been zeroed out and my cash balance just happens to be down the same amount.

I've gotten nowhere with support before stating they would only investigate if I provided them with a comprehensive account audit from a CGA, clearly costing more than the few dollars that disappears, but I'm tempted to see what they have to say about this latest drop because nothing has changed in my account except the accrued interest amount and my cash balance.


Update: Now 30 minutes into a "Live Chat", the agent has misunderstood twice (clearly a language barrier), suggested I wait for the monthly report, told me the balance shown in TWS does not reflect actual balance amounts (Ridiculous. So they're generated how? Just made up?), and while we chatted the September 4th daily report came available showing the the accrued interest amount for August minus the accrued interest amount for September 4th being applied as a reversal which he said was actually a reversal of the accrued interest amount from the prior month (?!?). I saw no value in continuing our conversation at this point. If that reversal quadruples and makes its way to my live cash balance my account will finally be correct.

Now, I graduated at the top of my class in accounting in college, one of only two who did so with honours, and have worked with a variety of accounting packages as well as helped develop custom accounting software, so despite not being an accredited CGA I feel fairly comfortable around numbers, but reversing the accrued monthly interest minus a day (or the prior month's accrued interest amount which makes no more sense), which is the opposite of what is being shown in the live account cash balance displayed in TWS, I simply don't understand.

While investigating possible discrepancy causes (one of the favourite parts of my job once upon a time) I added up the individual accrued interest accruals for each currency excluding positive interest gains and added that to the total accrued interest amount and it adds up to my previously missing cash balance amount. That could just be a coincidence -- I'll need other examples to compare it with.

Anyway, at this point I can only hope the missing cash will be returned to my account soon and that larger amounts don't start disappearing.
You can always make money tomorrow provided you don't lose it today.
  • #564
  • Sep 5, 2014 1:24am Sep 5, 2014 1:24am
KADC, kudos to you for trying to get to the bottom of this, I'd be very interested to see how this thread can shed some light on the issue. I've also seen swings in my cash reports, albeit small, and could not get a satisfactory explanation from IB support...

What's worse is since I am trading mostly EU futures & options and live outside the US, they have split (the accounting part of) my account into two (US and UK entities) and the accrued interest issue impact both accounts and since forex transactions seem to randomly hit both accounts it makes it even harder if not impossible to reconcile what's what...
  • #565
  • Sep 5, 2014 2:08am Sep 5, 2014 2:08am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
Quoting actalis
KADC, kudos to you for trying to get to the bottom of this, I'd be very interested to see how this thread can shed some light on the issue. I've also seen swings in my cash reports, albeit small, and could not get a satisfactory explanation from IB support... What's worse is since I am trading mostly EU futures & options and live outside the US, they have split (the accounting part of) my account into two (US and UK entities) and the accrued interest issue impact both accounts and since forex transactions seem to randomly hit both accounts it makes...
I feel for the difficulty you must have reconciling your accounts. A year ago Interactive Brokers moved all Canadian customers to new, fully Canadian integrated accounts, but the the primary benefit was calculating taxes and didn't make reconciling daily transactions any simpler.

I didn't pay attention to it since it doesn't affect me, but I believe there was an update notice a few days ago about changes to the way interest is calculated for European customers; though I doubt that will make things any easier for you. All I can suggest is to keep impeccable personal transaction records including the opening and closing exchange rates for each transaction if you want any degree of accuracy (I highly recommend using a spreadsheet).

I retired several years ago for health reasons, then we had a family tragedy a year ago, so I simply don't have the will to fight things like this anymore beyond a reasonable limit. I just want to make enough money to pay my bills and for my books to balance for peace of mind.

Provided the discrepancies remain minor, I try to chalk up unexplained losses as the cost of doing business with Interactive Brokers. After all, the entire industry is crooked so we can hardly expect our brokers to be saints; however, it would be nice if they would steal our money "honestly" with extra fees, etc. rather than this number obfuscation nonsense.
You can always make money tomorrow provided you don't lose it today.
  • #566
  • Sep 5, 2014 2:59am Sep 5, 2014 2:59am
Quoting actalis
KADC, kudos to you for trying to get to the bottom of this, I'd be very interested to see how this thread can shed some light on the issue. I've also seen swings in my cash reports, albeit small, and could not get a satisfactory explanation from IB support... What's worse is since I am trading mostly EU futures & options and live outside the US, they have split (the accounting part of) my account into two (US and UK entities) and the accrued interest issue impact both accounts and since forex transactions seem to randomly hit both accounts it makes...
Actalis, I'm in the same situation as you and I have to admit it is damn complicated, especially in the beginning. For interest, they charge you if any one of your "account" is in debit meaning that you can have a lot of cash in the "US" part of your account, but be negative for that currency in the "UK" part of your account, and then have to pay interest because of that. You have to know that there is no automatic transfers possible beetween the two, you have to monitor yourself this, and do manual transfers beetween the 2 parts if you want to avoid paying interest for nothing. After this you have the "US" part of the account that is again separated in 2 parts, because there are different regulations in the US beetween securities trading and futures trading.

And all this is calculated on "settled" cash, not actual cash (there is a 2 or 3 days delay until things get settled"), which makes it even more complicated.

But, according to me (you decide what this may be worth), there is not problem with IB's accounting, everything is correct and accurate (even if it is sometimes really complicated, and you need to understand a lot of things)

About interest and our "friend' enjoying seeing "problems" everywhere and complaining all the time here without listening anything that may be told to him, and at the same time still staying an IB customer (anyone logic would have left since a long time): IB calculates ACCRUED interest daily, and at the end of each month charges you the amount of interest for that month.

If you understand a little accounting, they use one "account" (in the accounting sens of the term) to add every day the ACCRUED interest, which appears in a "ACCRUED INTEREST" section of your reports. On each report, you will see the amount of accrued interest growing during the month. And at the end of the month (usually in the beginning of the next one arounfd 4 or 5) they make the debit of the total amount of the month and clear the accrued interest "account".

You can see this as your credit card expenses if you have a card where all the debits are made at the end of the month, it's the exact same thing.
  • #567
  • Sep 5, 2014 3:49am Sep 5, 2014 3:49am
Mevo, you're spot on about all this including the dual US account part...

It is very unsettling to have the already complex accounting spread across several accounts.

I would tend to trust the overall accounting to be accurate as I can't imagine a heavily regulated & listed broker like IB shortchanging their clients and risking their business model with this.

I do however blame the way they organize their internal accounting around multiple accounts while you only see a consolidated version of it on TWS.

I remember once trying to close a residual long position in JPY only to realize a few weeks later that the position had not been closed on the UK account but a short equivalent position on the US account had been initiated. Obviously interest accrued on the positions even though they didn't show on the consolidated view...
  • #568
  • Sep 5, 2014 4:03am Sep 5, 2014 4:03am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
Quoting Mevo
{quote} About interest and our "friend' enjoying seeing "problems" everywhere and complaining all the time here without listening anything that may be told to him, and at the same time still staying an IB customer (anyone logic would have left since a long time): IB calculates ACCRUED interest daily, and at the end of each month charges you the amount of interest for that month.
The accrued interest being applied at the end of the month would be a fine explanation, and certainly looks good on paper, the problem being, as has already been explained repeatedly, is that accrued interest is applied to your cash balance daily.


Now let's be clear, I'm not your friend, I'm this thread's moderator, which unfortunately means I cannot "ignore" your posts, as well as a senior Forex Factory member with an accounting and software development background and many year of experience dealing with Interactive Brokers. I've read and replied to everything you've posted, virtually all of which has ignored what others, particularly myself, have posted previously, about a situation we've been tracking for years.

By all means disagree with me if you wish, but you've already stated your account has been unbalanced at times but you were satisfied that the problem eventually resolved itself. Please respect that some of us take accounting more seriously.

I appreciate that you are a junior Forex Factory member, but that does not excuse you from the requirement to treat others with respect.
You can always make money tomorrow provided you don't lose it today.
  • #569
  • Edited 5:35am Sep 5, 2014 5:13am | Edited 5:35am
I shouldn't do this, but I'm going to do it anyway...

Quoting KADC
{quote} The accrued interest being applied at the end of the month would be a fine explanation, and certainly looks good on paper, the problem being, as has already been explained repeatedly, is that accrued interest is applied to your cash balance daily.
No, they're not.
How many times did I told you to check the statement of funds optional section ? Read again past messages.
I told you to post the statements to show your claims, you didn't.

For everybody to see, I will just show my account then:
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Last month interests were charged and debited from my account yesterday. I checked for the whole month, ACCRUED interest has NEVER been debited from my account on any single day. As I explained to Actalis, it's like credit cards debited at the end of the month. The debit is not made to your account until the end of the month, but if you calculate how much you have, you take this amounts in consideration, because you know they WILL be debited.

Now post YOUR statement of funds where daily ACCRUED interest has ever been debited from your account.


Quote
Now let's be clear, I'm not your friend
Sure, there were " ", look at IRONY in a dictionary, you may find the definition interesting.

Quote
I'm this thread's moderator, which unfortunately means I cannot "ignore" your posts, as well as a senior Forex Factory member with an accounting and software development background and many year of experience dealing with Interactive Brokers.

You are, you are... You already told this, and nobody cares of your claims.
What you really are is someone who seems unable to see he may be wrong, and here you are.
You keep on telling things, you don't try to understand.
In your mind: You ARE ... You are convinced to be right even when you're wrong.

Quote
I've read and replied to everything you've posted, virtually all of which has ignored what others, particularly myself, have posted previously, about a situation we've been tracking for years. By all means disagree with me if you wish, but you've already stated your account has been unbalanced at times but you were satisfied that the problem eventually resolved itself.

I NEVER ignored anything anyone posted, I hate when people do this.
And you keep on telling this despite I told you this is NOT what I said, nor what I feel. Anybody can just go back and see by himself.
Answer this question then: Do you want to understand, or just keep on posting messages after messages to claim wrong problems about IB just to have enough messages to be a senior member here ?

Quote
Please respect that some of us take accounting more seriously. I appreciate that you are a junior Forex Factory member, but that does not excuse you from the requirement to treat others with respect.

I guess I was always very respectful in anything I wrote. But thank you for your jokes
(EDIT: I just read again all my messages to see if I wrote somewhere that I was thinking you were a f..k..g idiot, and no, not a single disrespectful mention found anywhere. I guess you meant "I am right, and you have to show respect by not telling me I'm wrong, even if I am...")

To go back to the subject, even if I fear you won't admit anything: You don't make the difference beetween ACCOUNTING (which is the REPORTS) and the TWS account window ESTIMATION of your account value. Take the ACCRUED interests as an example, because it's a good example: and compare it to the previous credit card example:

On REPORTS, ACCRUED interest are NOT debited from your account until the end of the month. They are tracked, like your credit card expenses, but never debited. But the account window VALUE takes care of it, because it knows you WILL have to pay it at the end of the month, the same way you know how much money you can spend according to spendings you already have pending on your credit card.

The TWS account window takes in consideration how much DIVIDEND you WILL receive for example, even if you didn't receive them yet. This shows up on reports in the "ACCRUED dividends" and work the same way as ACCRUED interest: You did not receive the money on your account yet, but you will in the future. It calculates how much daily coupon you virtually received on BONDS too for example, even if you didn't receive anything yet as coupon are usually only received every 6 months. And this doesn't show up anywhere on reports yet, as the coupons are not even planned to arrive on your account yet. But the TWS account value estimation takes all this in consideration.

You have to understand the ACCOUNTING is 100% correct, and to make the difference beetween what is PLANNED to happen but did not happen yet. The TWS account windows tries to make the better estimation possible with all future planned events. The REPORTS show the value of your account at this moment, not taking in consideration future planned events. The values of your account showed on reports is not the same as the value in TWS account window.

According to our example:
REPORTS account value = Your bank account statement.
TWS account value amount = Your bank account statement value + pending clearing checks and money already sent by people not yet arrived on your account - pending fees not yet debited and pending credit card expenses that will be debited at the end of the month.

I'm waiting for your statement of funds with daily accrued interest debited from your cash balance mister "I AM"...
  • #570
  • Sep 5, 2014 9:40am Sep 5, 2014 9:40am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
Quoting Mevo
ACCRUED interest has NEVER been debited from my account on any single day.
Add up your daily transactions at the end of the day adjusted for applicable variances in exchange rates and compare that to your cash balance after system maintenance (between midnight and 1 a.m. EST for my region). You will notice your balance is short the exact amount of the accrued interest from the previous day; however, you are welcome to believe that is merely a coincidence that will repeat itself at the same time every day, year after year. Maybe if you believe it strongly enough reality will change to match your perceptions.

Quote
What you really are is someone who seems unable to see he may be wrong, and here you are. You keep on telling things, you don't try to understand. In your mind: You ARE ... You are convinced to be right even when you're wrong.

Precisely my opinion of you. At least four other people have reported daily cash balance discrepancies in the past few months, one of them being yourself (which is what makes your posts so truly bizarre), yet you insist we're all wrong (including yourself) because your monthly statement balances. So does mine generally. As far as I know everyone's monthly statement usually balances out -- this has never been the issue, or at least I'm not aware of anyone posting about it in this thread. Our concern is discrepancies in the daily cash balance.

I don't know why you're so desperate to prove a point that isn't in dispute, but since you ignore what anyone else has to say and seem to enjoy restating yourself, by all means post again for the fourth time how your monthly report balances.
You can always make money tomorrow provided you don't lose it today.
  • #571
  • Edited 11:45am Sep 5, 2014 9:54am | Edited 11:45am
KADC: You're 100% right. End of discussion.
I totally agree with all you said.

I will close my IB account next week.
Thank you for showing me how this broker was doing bad accounting and ripping me off and once you know this, only really stupid persons can continue to do business with such a company.

Thank you again.

EDIT: Just to make things clear for anyone seeing this post without having followed the previous discussion, it's of course IRONIC.
  • #572
  • Sep 5, 2014 10:52am Sep 5, 2014 10:52am
The $55.7 billions in customer equity probably belong to clients who suck at accounting then..
  • #573
  • Sep 5, 2014 11:11am Sep 5, 2014 11:11am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
Quoting Mevo
KADC: You're 100% right. End of discussion. I totally agree with all you said. I will close my IB account next week. Thank you for showing me how this broker was doing bad accounting and ripping me off and once you know this, only really stupid persons can continue to do business with such a company. Thank you again.
If you prefer misunderstanding and/or misconstruing the discussion I won't stop you: You're only embarrassing yourself.
You can always make money tomorrow provided you don't lose it today.
  • #574
  • Sep 5, 2014 11:19am Sep 5, 2014 11:19am
Quoting KADC
{quote} If you prefer misunderstanding and/or misconstruing the discussion I won't stop you: You're only embarrassing yourself.
What the f*** are you talking about ?
I'm misunderstanding by thinking you're right ?
And I am embarrassing myself by admitting you could be right ?

EDIT: This may be the cleverest thing you ever wrote.
  • #575
  • Sep 5, 2014 11:33am Sep 5, 2014 11:33am
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
Quoting shrike
The $55.7 billions in customer equity probably belong to clients who suck at accounting then..
A similar point was made about how Interactive Brokers, the largest online brokerage with an annual revenue in excess of $1 billion (down sharply from the preceding two years but still impressive) was unwilling to update their software platform.

I was in contact with their development team regularly for a few months when they were trying to solve the "migrating trend line" issue and they were just as frustrated as we are. At the time (this was a few years ago) their instructions were to essentially bandage any problems that arose. Considering Peterffy (CEO and founder of Interactive Brokers) practically invented electronic trading it's unfortunate he hasn't chosen to focus more in this area.

This may account, at least in part, for the loss of market share the company has experienced almost every quarter since 2012 despite being the cost effective option for discount brokerages. Just the corporate money Peterffy wasted supporting Republican candidates in the 2012 election could have paid for significant software improvements.
You can always make money tomorrow provided you don't lose it today.
  • #576
  • Sep 5, 2014 11:34am Sep 5, 2014 11:34am
Quoting shrike
The $55.7 billions in customer equity probably belong to clients who suck at accounting then..
Of course ! They're not as clever as KADC, he is
Quote
a senior Forex Factory member with an accounting and software development background and many year of experience dealing with Interactive Brokers.
And he has
Quote
been tracking (this) for years.
Please show him all the respect he (thinks he) deserves.

EDIT: And he will answer your post with something having absolutely no relation, Shrike.
Ok, now is really time for me to stop. I will make a big effort to not answer whatever he further says.
  • #577
  • Edited Sep 6, 2014 10:14am Sep 5, 2014 12:28pm | Edited Sep 6, 2014 10:14am
http://i.imgur.com/JLcViof.jpg

IB customer equity, 2008 to 2014, in billion USD

Apparently clients are running for the hills, too many accounting problems. Please, give Peterffy some advice on how to run a brokerage firm..
  • #578
  • Edited 3:12pm Sep 5, 2014 1:02pm | Edited 3:12pm
  •  KADC
  • Joined Apr 2012 | Status: Be unreasonable. | 897 Posts | Online Now
Quoting shrike
http://i.imgur.com/JLcViof.jpg IB customer equity, 2008 to 2014 Apparently clients are running for the hills, too many accounting problems. Please, give Peterffy some advice on how to run a brokerage firm..
Interactive Broker's operating cash is drying up (see image), investing and financing cash flow has been negative since the IPO, revenue was down 35% in 2013 from 2011, 2014 2nd quarter report shows client DAT is down 10% from January this year (monthly reports show sustained losses of 2%), and the stock has been downgraded to overweight by most agencies, but you go ahead and buy up all the IBKR stock you want since you believe they're doing so well.

addendum:

Even if Interactive Brokers were doing better, corporate success has nothing to do with good business practices. For the sake of discussion let's mention a couple of examples you may be familiar with; like Wells Fargo who, according to court documents a few months ago, "set up detailed internal procedures to fabricate foreclosure papers". How about GM who just issued the largest recall in automotive history for a defective part they were aware of for at least a decade that would have cost only a few cents per unit to replace. Perhaps you remember the events of 2007/2008 where the largest banks (and therefore by your argument the most trustworthy because they had so many customers) nearly caused the collapse of the global economy in 2008?

Now if you think Interactive Brokers or any other company is an exception and that they won't do whatever they believe they can get away with in order to make more money (and particularly a company with shrinking revenue like IB) your ideology with regard to corporate conduct differs from real world demonstrated behaviour.

The "lots of customers" argument is part of crowd psychology: People tend to believe that everything is fine because they don't personally see a problem, and even if they do they assume someone else is already doing something about it. That's why everyone kept buying derivatives until 2007/2008, and by then it was too late. Being too trusting, particularly when it comes to money that someone else is in control of, seldom works out in the owner's favour.


Interactive Brokers Cash Flow
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You can always make money tomorrow provided you don't lose it today.
  • #579
  • Sep 5, 2014 3:09pm Sep 5, 2014 3:09pm
So you are short IBKR then? At what price?
  • #580
  • Sep 5, 2014 3:25pm Sep 5, 2014 3:25pm
I sure hope the talk here recently about inaccuracies is incorrect but after seeing my account value from yesterday & today after the up move in corn today has me scratching my head a bit. My account is about 95% corn related & even with the decent move higher today, the account value didn't move up a bit from yesterday. This I haven't noticed until today.
Looking @ the financials of the company, nothing to brag about & insiders continue to sell. Sure would hate to have to move as they have the lowest commission costs but now I'm not sure I trust the accounting :-(
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