Interactive Brokers - experiences and opinions

Ok here is something semi-official about this new IB developement from forexlive.com:

http://news.forexlive.com/!/interact...ept-1-20160812

And this applies to US trading accounts ONLY and NOT trading accounts of IB clients of countries outside of US. So this explains why we are not receiving any notices. It is very strange that IB chooses not to make any public announcement regarding this and just quietly sending emails to their clients. And people have to get confirmation from other 3rd-party sites.

According to KB2731 posted by IB, in order to qualify as "Eligible Contract Participant" (ECP), you just need to have $10 million in net worth. So for those of you who have been successful in trading and have accumulated this much assets, you just need to fill out a questionaire to state to them that you have $10 million and you will be able to continue to do leveraged fx just like before, nothing changed. And even if you don't, you can still fill out a questionaire to show that you are an "Accredited Investor" but I am just not sure being an "Accredited Investor" would allow you to continue to do leveraged fx.

Or another option is just to simply move to Futures (for which IB is still the best broker like I said before) or move to Canada if you really want to stay with IB if you can't do leveraged fx anymore. So I guess this is one more reason for you guys to move to Canada besides escaping from Donald Trump, to escape from draconian, clueless and incompetent financial regulators.

Good trading!

And this is a response from an IB customer service rep. to a client:

Dear ******,

IB made a policy decision to stop offering leveraged forex to US retail client because of the current regulatory environment toward the product in the US. We believe the change will affect fewer than 2,000 US retail clients who trade this product actively. We may decide to offer this product in the future to US retail clients, depending on regulatory developments.

Regards,
Karen S.
IB Client Services

Quoted from this forum thread: https://futures.io/brokers-data-feed...x-trading.html

So I guess they are not going to bother to establish a separate entity exclusively offering retail forex and register under CFTC/NFA only just for fewer than 2000 US clients. Only 2000 traders in the US signed up with IB, one of the closest to an ECN broker in retail forex? I don't believe it.

https://www.interactivebrokers.com/en/index.php?f=3731

I may be missing something, I probably am, but why do so many people view FXCM as a viable alternative to IB? FXCM does not allow you to be a market maker and IB does. If the bid-ask spread on EUR/USD is 1.12 - 1.1201, IB allows you to enter a sell limit order at 1.12005 and it will get executed ahead of all the 1.1201 sell limit orders. On the other hand, FXCM will ignore your order and will execute the buyers against the 1.1201 "liquidity providers" (who obviously share their revenue with FXCM one way or another). This is big. Over the last year, I have made more than 1k on just the ability to be on the other side of the bid-ask spread. A couple of times the market never reached my limit order but it got executed anyway by IB against some poor guy, and I made substantial profit.

Why is nobody talking about this issue? Does anybody know another broker who would allow market making in FX?

The rest 30.000 could be non-US forex trader.

Hello All

I've actually just joined Forex Factory to specifically (and only) reply to this thread as it appears that there is a lot of mis-information flying about and I am in a position to perhaps shed some light on it. I am a professional trader, based in Europe and to be honest, although I solely trade using Leveraged Forex through IB, I would never have heard about this except that I have a friend in the US also trading Forex through IB.

When he sent through a copy of the email he received on Thursday night, although it did not mention non US traders, I was highly concerned as my trading strategy is semi automated, sending trades through Ninja Trader into IB Gateway and it's taken a lot of time, effort and money to perfect, so to 'start again' from a technical point of view would be extremely frustrating.

I am lucky in that I have access to a few well placed (i.e. rich !) Venture Capital guys in Switzerland whom in turn know some of the senior guys at IB and I was given access (due to the size of my account I was told) to a senior IB exec. to discuss this matter.

I have been told categorically that it only impacts US domiciled traders and IB are absolutely not pulling out of the Leveraged Forex market, as it is one of their biggest income generators. I was told that they simply based their decision on 'numbers' - they have 360,000 client accounts and only 2,000 of those trade leveraged forex in the US - the other 30,000+ forex accounts are outside the US and for them (I was told) it is simply not worth the regulatory 'hoops' they would have to jump through to segregate / change the structure of large portions of their business to allow these 2,000 accounts to continue trading leveraged forex vehicles.

It sounds harsh, but as mentioned, it was a business decision purely based on 'numbers'.

Hopefully this will enlighten people as to what is happening (at least as I have been told and knowing the people that put me in touch with the senior IB exec, I have no reason at all to doubt what I was told), but equally it does not make it any easier on the 2,000 traders that now have to change their trading style / vehicles or jump ship to an undesirable option with far less 'security' than IB provides in terms of 'money in account' risk etc.

Good luck in finding a new, suitable broker.

I just got off the phone with IB. It is TRUE. 10M is the minimum begging SEPT 1st. Incase you want to call and confirm yourselves 312-542-6901. Futures requirements are not changing, as I suspected they wouldn't. And just like you didnt NEED to be in Conn to trade with IB. You dont need to be in DENMARK to trade with SAXO. I guess what they say about ASSUMING is accurate.....Anyways, I hope that helps clarify things for those of you, who like me were in the dark about it still.

Anyways, I still think that for those who are able to relocate in the immediate future would probably be best served by doing so. Lots of lovely places out there....

Yup, and I am one of the unlucky 2000, hence why I closed my account. But there is no need to mop over it, instead find the best viable alternative. Thankfully I do not have a fully automated strategy that routes my orders through IB's gateway, rather I use automation on a different platform (mql4) only for gathering and organizing information, execution is always manual and discretionary.

So there are really 2 main benefits that I loose by having to choose another fx broker (probably going with the biggest one in the US), the first is a lack of the SIPC insurance and the second is unfavorable, or rather, less favorable market execution prices, especially in times of high spreads.

There really is not much I can do about the second, since I have never traded fx with real money with a broker other than IB before, I don't really know the differences, yet, I'm sure I'll find out soon, but somewhere somehow I'm sure those differences will be capped, for instance say 2 unfortunate traders, one with an account at FXCM and another at IB both were short the swissy on January 14 , and both had comparable stops and position sizes in place, I am sure both trader's stops would have been blown out the water, but which trader would have lost less is anybody's guess really, and so goes for other events where liquidity dries up and a stop order becomes a market order.

Regarding the first benefit I will loose, the answer is to simply deposit a fraction of your overall trading capital. The key is knowing, at least to the best of your ability, the maximum draw down of your system as a percentage of your overall trading capital and just depositing that amount and then trading with max leverage. I very seldom open more than 1 trade at a time and I only trade 10-15 times a month.

Say trading capital is 50K, and max draw down is 15% and you only risk 2% of your trading capital, so deposit amount would be 7.5K. With 7.5K you can command up to 3.5 lots, which is about how much you can risk for a 30 pip stop on say EURUSD at ~2% of your overall trading capital. You would need to hit 8 such loosing trades in a row to wipe out your account and hence your overall estimated drawdown , in which case you have to reevaluate your system anyway. If you have profits that take your account above your initial deposit , just withdraw it and in an unfortunate event of the broker going under you will only be out a fraction of your overall trading capital, and just pre-allocate that as the cost of doing business.

Yes that is an issue that was/is amply discussed on FF in various other threads. This is what makes IB a true ECN vs the other STP brokers. Another broker that would allow you to be a market maker similar to IB is LMAX in UK and also most of the prime brokers.

Forex trading is NOT and never was protected by the SIPC ANYWAY even if you continue with IB. So you didn't lose much there. Unlike the other financial compensation schemes by other regulatory bodies in the world, SIPC is VERY SPECIFIC. It only protects some of the more "conventional" investments like stocks, bonds, mutual funds and etc. and none of the "speculative" trading instruments like commodities, even Futures is not protected. If you look at closely at SIPC, first your firm as to be on a list of registered companies with SIPC in order to have the protection, second your account has to be in some kind of special account in order to be protected.

This is IB's article on this: https://ibkb.interactivebrokers.com/node/1968

http://ibkb.interactivebrokers.com/article/2731

What i was emailed by my rep

Hello everybody,
I am a active trader on IB with an automated SW using TWS. I am thinking to change broker from IB to FXCM.
My SW is in Java and i would like to know if you have any suggestions to convert my existing code to work with Trade Station 2, in the painless way possible.

Thank you in advance.

I just heard back from IB

My Email:
I have been reading about a new IB rule set for 1 September 2016 around IB not offering leveraged Forex positions to US accounts less then $10 million?

As I am not a US resident / citizen I would like to find out if this would apply to me?

IB Response:
"Please note, the memo you are referring to only applies to US retail accounts. You will not be affected by this change."

There you go. It is trading as normal for me

Looks like IB have done a deal with www.protrader.org so for those that don't like their crappy TWS software this looks like an excellent hook up especially as the software is free.

And if people like trading from the charts the PTMC platform offers this. Plenty of YouTube videos to learn how to use the software.



Here's how to connect to IB - http://protrader.org/articles/manual...active-brokers

After they get enough traders to download & start using it for free, then they'll start charging a fee.

Yep, they may well start charging a fee but in this game always think of costs as a potential investment and then look if you get a return on that investment. Easier order entry via chart trading which isn't available on TWS might be a great investment for some traders with excellent potential returns. For others however the costs won't make much difference to their bottom line.

Could someone kindly help me to calculate Interactive-Brokers interest rate,

If i have $20.000, then i buy/sell 400K EUR/USD, and keep that position for 20 or 30 days.
How much interest will show on my Accrued Interest Column ?

Thanks

Hey guys,
Anyone can explain me the difference between two orders Market to Limit and BOX TOP order? These two orders are similar)

Do you trade options with IB ?

The Box Top Order is only available for options traded in BOX (Boston Exchange), which was initially an exchange co-founded by IB.
Otherwise, you should only see the Market to Limit order.

Thanks man,
Yes I trade options, but I usually execute by middle price.
It's my mistake: IB shows the table for every order (which products I may trade with the certain order type)

So after 3 solid years of FX paper trading and finally feeling confident enough to go live, IB no longer offers leveraged FX accounts??? I can't even begin to express how frustrated I am.

I hear some FX brokers are shady (although I don't understand how one broker can alter a currency pair that's traded worldwide). Who else can I trust?