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Interactive Brokers - experiences and opinions

  • #761
  • May 6, 2016 6:00am May 6, 2016 6:00am
Quoting priceaction9
{quote} they spreads r so good that you ll make more money than you have got if you had signup to a broker offer bonuses.
You forgot to add: Their swaps are so horrible that they'll eat all your profits if you keep your positions overnight...
  • #762
  • May 6, 2016 8:33am May 6, 2016 8:33am
Quoting priceaction9
{quote} Interactive broker is the rolls royce of the broker, i had to deposit a minimum of 10K when i did open my account (they might have lower it nowdays) but they spreads r so good that you ll make more money than you have got if you had signup to a broker offer bonuses. IAs i mentioned in the past , i hate their costumer service but the rest is ok
Unfortunately I don't have 10K to deposit. I will start with 500 USD which is the money I can loose without affecting my lifestyle. With Interactive Brokers I cannot start also because they only offer 1:100 leverage if I am correct. But I have heard it is a good broker.
  • #763
  • Aug 11, 2016 4:03pm Aug 11, 2016 4:03pm
Whoa - I just got this e-mail from IB:

"Effective September 1, 2016, Interactive Brokers will require that only accounts held by "Eligible Contract Participants" may open leveraged forex positions."

It goes on to clarify that an "Eligible Contract Participant" generally is an individual or organization with assets of over $10 MM (or $5 MM if trades are hedging).

I called IB and they informed that they are pretty much getting out of the retail FX business due to Dodd-Frank! I was with IB due to funds security (at least in terms of being a reputed broker) and great spreads, although commission-based trading. This is quite disappointing. What other US broker is reputed with good pricing/spreads for FX trading. And if IB is getting out, so also might a lot of other shops be closing up! Disappointing news!
Enter Signature
  • #764
  • Aug 11, 2016 5:45pm Aug 11, 2016 5:45pm
Quoting san99
Whoa - I just got this e-mail from IB: "Effective September 1, 2016, Interactive Brokers will require that only accounts held by "Eligible Contract Participants" may open leveraged forex positions." It goes on to clarify that an "Eligible Contract Participant" generally is an individual or organization with assets of over $10 MM (or $5 MM if trades are hedging). I called IB and they informed that they are pretty much getting out of the retail FX business due to Dodd-Frank! I was with IB due to funds security (at least in terms of being a reputed...
Disappointing indeed!!, they told me that it was a 'new IRS rule and will apply to all brokerages '
  • #765
  • Aug 11, 2016 6:41pm Aug 11, 2016 6:41pm
Can interactive brokers be used for trading options as well as penny stocks?
  • #766
  • Aug 11, 2016 6:45pm Aug 11, 2016 6:45pm
Quoting MoneyD
{quote} Disappointing indeed!!, they told me that it was a 'new IRS rule and will apply to all brokerages '

Yeah I got that message too... I really hope that's not true! They were such a good broker too. I'm looking elsewhere now, ATC, FXCM, and TD Ameritrade. I hope the government doesn't screw US forex trading like they did with online poker.
  • #767
  • Aug 11, 2016 7:02pm Aug 11, 2016 7:02pm
Quoting oliver1337
{quote} Yeah I got that message too... I really hope that's not true! They were such a good broker too. I'm looking elsewhere now, ATC, FXCM, and TD Ameritrade. I hope the government doesn't screw US forex trading like they did with online poker.
I am sure that it is true, I had an online chat with one of their representatives and she told me that as of September, I will only be able to trade spot FX 1:1 , meaning if for instance you have a 5K account you can not buy/sell more than 5K units worth of any currency pair. Which makes trading FX on IB pretty much worthless as currency pairs move in very small increments and hence can not make decent profits unless one has a huge account (+500k). Pretty devastating really, as I have been happily using IB FX for the past 4 years and now have to shop around for another fx broker, looking at either FXCM or Oanda, not sure how reliable they are, likely not as reliable as IB, I will probably deposit a small amount and use full leverage on my trades in case they go under, only a small part of my overall trading capital would be risked.
  • #768
  • Aug 11, 2016 7:51pm Aug 11, 2016 7:51pm
Quoting san99
Whoa - I just got this e-mail from IB: "Effective September 1, 2016, Interactive Brokers will require that only accounts held by "Eligible Contract Participants" may open leveraged forex positions."
Is this just for US residents? I haven't received such an email, and I can't find anything about it on IB's website. If someone could provide a link with this announcement I'd be grateful, thanks.
You reap what you sow.
  • #769
  • Aug 11, 2016 8:05pm Aug 11, 2016 8:05pm
No link since it was an email notice and not sure if it applies for non-US accounts , but definitely for US. Here's the screenshot of the email below anyway
Attached Image (click to enlarge)
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  • #770
  • Aug 11, 2016 8:14pm Aug 11, 2016 8:14pm
Quoting MoneyD
No link since it was an email notice and not sure if it applies for non-US accounts , but definitely for US. Here's the screenshot of the email below anyway {image}
Yeah I've been searching their site but also haven't seen any announcements or news. Searching news sites but nothing about IB. They still have up some award they got in 2015 for "Best FX retail platform". They also have up their metrics on how IB FX traders have the best profitability among all US brokers. Sheesh . Did they mention to you about any specific IRS rules? The guy I talked to said that he'd just seen the notice and that it was sprung on by surprise. And then he said the bit about Dodd-Frank but figured it was a stock answer. I am hoping they clarify their position and maybe it was some "mistake". I know, wishful thinking. They apparently have the largest retail base. And they are making commissions - easy money. WTF?!
Enter Signature
  • #771
  • Aug 11, 2016 8:24pm Aug 11, 2016 8:24pm
Quoting MoneyD
No link since it was an email notice and not sure if it applies for non-US accounts , but definitely for US. Here's the screenshot of the email below anyway {image}
Could be a hoax. Even if this is an email notice, there should be a link to explain it further. And no link to the KB articled mentioned in the email? I searched all over internet and I couldn't find any mention of this notice from IB either. Check the email address of the sender to see if it's from a legitimate email address from IB.
Make your losses in demo. Earn your profits live.
  • #772
  • Aug 11, 2016 8:26pm Aug 11, 2016 8:26pm
Quoting Forexia
{quote} Could be a hoax. Even if this is an email notice, there should be a link to explain it further. And no link to the KB articled mentioned in the email? I searched all over internet and I couldn't find any mention of this notice from IB either. Check the email address of the sender to see if it's from a legitimate email address from IB.
I would love it if you're right. But two of us have called in to IB so far and nothing to the contrary...
Enter Signature
  • #773
  • Aug 11, 2016 8:30pm Aug 11, 2016 8:30pm
Quoting san99
{quote} Yeah I've been searching their site but also haven't seen any announcements or news. Searching news sites but nothing about IB. They still have up some award they got in 2015 for "Best FX retail platform". They also have up their metrics on how IB FX traders have the best profitability among all US brokers. Sheesh . Did they mention to you about any specific IRS rules? The guy I talked to said that he'd just seen the notice and that it was sprung on by surprise. And then he said the bit about Dodd-Frank but figured it was a stock...
I captured the screen shot of my chat session with the IB representative. See for yourself what she had to say below, btw, I blacked out my username for privacy purposes.
Attached Image (click to enlarge)
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  • #774
  • Aug 11, 2016 8:41pm Aug 11, 2016 8:41pm
Quoting MoneyD
{quote} I captured the screen shot of my chat session with the IB representative. See for yourself what she had to say below, btw, I blacked out my username for privacy purposes. {image}
Ok if this is an IRS bullshit then it DEFINITELY does NOT apply to non-US traders. But it's strange that I searched on the internet on this new IRS rules and I can't find any information either. What's the rule called? And it's applying to ALL brokerages according to this chat? So FXCM is affected as well? Time to check with Jason Rogers from FXCM then.

It seems very strange that IRS would want to get involved in limiting trading on leverage on forex all of sudden. That's usually a regulator's job first of all and they are just a tax-collecting agency. WHY would they want to get involved? Second, the more leverage, the more a trader would trade and higher commissions for the broker and that's higher taxable income for the IRS. WHY would IRS want to limit that? This does NOT make sense.
Make your losses in demo. Earn your profits live.
  • #775
  • Aug 11, 2016 8:45pm Aug 11, 2016 8:45pm
Its about this: https://www.leaprate.com/2016/05/sec...-retail-forex/

IB is a brokerdealer, so its game over for retail fx in the USA for them. Hopefully the UK, SG and HK branches will still offer it for non-us-residents.
  • #776
  • Aug 11, 2016 8:51pm Aug 11, 2016 8:51pm
Quoting Forexia
{quote} Ok if this is an IRS bullshit then it DEFINITELY does NOT apply to non-US traders. But it's strange that I searched on the internet on this new IRS rules and I can't find any information either. What's the rule called? And it's applying to ALL brokerages according to this chat? So FXCM is affected as well? Time to check with Jason Rogers from FXCM then. It seems very strange that IRS would want to get involved in limiting trading on leverage on forex all of sudden. That's usually a regulator's job first of all and they are just a tax-collecting...
I can not answer any of your questions, as I have posted all the info I have on this unexpected development from IB. If you get a response from FXCM please post it, as I am actively looking for an alternative broker.
  • #777
  • Aug 11, 2016 9:37pm Aug 11, 2016 9:37pm
Until I see some official announcement either from IB itself or some other sources on the Internet, I will treat this as a hoax. You never know who's behind this. The SEC ban on leveraged forex published on Leaprate, that I am aware of. But this is NOT it. And especially if you mention that this is an IRS rule and would apply to all forex brokers, then how would changing broker make any difference? When you go to another broker, you would still be required to be an "Eligible Contract Participant" and otherwise not be allowed to trade forex with leverage?
Make your losses in demo. Earn your profits live.
  • #778
  • Aug 11, 2016 10:09pm Aug 11, 2016 10:09pm
Quoting MoneyD
{quote} I captured the screen shot of my chat session with the IB representative. See for yourself what she had to say below, btw, I blacked out my username for privacy purposes. {image}
This is more or less the same info I got, only exception being the guy was talking about Dodd-Frank. The link posted by Shrike seems more informative than what the IB reps are letting on. In the comments on the link, someone was saying that as long as IB was *not* counterparty to trades then it would not be affected by the new regulations. But apparently this is exposing that it IS. It is not "true ECN". I don't know...IB still needs to post something more on it's website and take down all the stuff on retail FX if this is truly end of the line for these operations.

Dammit dammit dammit I am going to miss the low spreads on EUR/AUD. Even Pepperstone and Dukascopy have at least 0.5 pips higher on the pair. Basetards
Enter Signature
  • #779
  • Aug 11, 2016 10:57pm Aug 11, 2016 10:57pm
I have been with IB for about a year trading forex for my own account full time (prior to this I traded spot at a bulge bracket in NY for 9 years followed by a 3 year stint at a prop house in Chicago). I chose IB after much research and was especially pleased with the FXTrader platform, its reliability, and functionality (though it can be overwhelming in the intricacies of its capabilities). I have read here and in other forums about the poor customer service at IB but aside from this most recent stunner of a development, I have nothing but good things to say. In fact, I was even able to upgrade to a customized commission schedule in a conversation with an account manager given my high volume. I am sad to see them exit retail FX in the US. This is not a hoax email, I spoke to a rep in compliance and this is a result of regulation dating back to 2011 in the Dodd-Frank mess. The reason FXCM and Oanda for instance are still able to service retail FX is because they are CFTC regulated rather than SEC (as in the case of IB, a broker-dealer). Sorry for the long-winded background, but I wanted to post because I am now in search of a new full time broker. As mentioned, I do very high volume trading (in excess of 5 yards per month). Reliability and dependability are my main concerns. I have read horror stories of freezing and quote rejections during high vol market periods from the likes of FXCM and Oanda specifically. But at this stage it seems like these are two of the only options for US based investors. I am also trying to research some prime of prime options like Baxter and LMAX. I spoke with a Baxter rep already and this seems like a viable option (they have relationships with many LPs like Currenex, Hotspot, EBS, FXall among others). I have an appetite for an account size of $250-300 but I do not want to tie up $1mm+ which many of the US based prime of primes (FC Stone) require to gain access to the low clearing fees. Do any posters have advice as I begin this search? Any experience, good or bad, with some of the prime of primes. Is it necessary to go this route to improve upon the dependability of market access (i.e. avoid the freezing and requotes of the FXCMs?). ANY advice would be most appreciated. Thank you
  • #780
  • Aug 11, 2016 11:48pm Aug 11, 2016 11:48pm
Quoting texashedge
I have been with IB for about a year trading forex for my own account full time (prior to this I traded spot at a bulge bracket in NY for 9 years followed by a 3 year stint at a prop house in Chicago). I chose IB after much research and was especially pleased with the FXTrader platform, its reliability, and functionality (though it can be overwhelming in the intricacies of its capabilities). I have read here and in other forums about the poor customer service at IB but aside from this most recent stunner of a development, I have nothing but good...
I would stick with prime brokers as they operate in more of an ECN model where the broker operate not as principal to your trades but actual brokers just like in other financial instruments like stocks for example. Another prime broker you can also try is Reuters. I know they provide a platform for the interbank market IBS, so maybe you can contact them to see if they can recommend some brokers to you.

If this is all stemming from the recent SEC ban, it seems the only way for IB to remain in the retail FX business is just to incorporate a completely separate entity from its main company to deal in leveraged Forex only and register it as a FCM to be solely regulated by CFTC/NFA. The rest of their business can be still overseen by SEC but just forex will be overseen by CFTC/NFA if they still want to continue to deal in retail FX. Retail FX is a lucrative business so I don't see good reason why IB would want to or should give it up especially when they are doing so well in it. But then again, this would be IB's decision to make.

SEC is nothing but one word: STUPID!! They totally f***ed up on Bernie Madoff and all they know what to do is go after little forex traders because we are easy targets.
Make your losses in demo. Earn your profits live.
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