Anybody have experience running SMAs at IB?

Discussion in 'Professional Trading' started by GlobalMacro90, Feb 8, 2019.

  1. Anybody have experience running SMAs at IB? From what I can tell you can just trade an institutional master account and have the SMAs basically mirror the master account. Seem very scalable (trading one account basically same amount of work as trading 100). Also looks like a good amount of back office stuff such as fee collection, taxes, reporting, etc is automated.

    This seems like a very good structure if you dont have a lot of AUM, as the traditional hedge fund structure is very expensive to set up and maintain. Would you be registered as a RIA to trade this way (master account with connected SMAs)? Is there any hoops to jump through if you trade with leverage? Would each SMA just be levered the same as the master?

    If anybody could share their experience in this area that would be great.

    nooby_mcnoob likes this.
  2. ZBZB


    What is sma? They have a friends and family account that allows you to trade 15 accounts.
    Last edited: Feb 8, 2019
  3. RedDuke


    Single Managed Accounts

    oops meant to say separate :)
    Last edited: Feb 8, 2019
  4. separately managed account.
  5. RedDuke


    Unfortunately IB is not good for SMAs. They only allow accounts' allocation based on percentages and not contract quantity. We used to do allocations based on SMA balance, and needed to be precise which account get which number of contracts. IB does not have such capability.
    jackmcgreal and dcwriter like this.
  6. Mr.Wahdy


    I manage long-only and long/short strategies for SMAs on IB, and can confirm that it's a bit of a challenge. Accounts do not perfectly mirror the model portfolio. For example, sometimes when I look to exit a position, I'll submit the order with a percentage allocation of -100%. Some accounts, for some reason, end up having a negative position and I have to quickly take a corresponding long position in the "independent" model.

    Other than that, theoretically, the IB platform is a great way to establish an investment management business.

    I hope this helped.
    dcwriter and GlobalMacro90 like this.
  7. RedDuke


    Exactly why we left IB, our situation was even worse, since we traded futures, and could not allocate the exact number of contracts to account that we needed to.
    dcwriter likes this.
  8. qlai


    For what may I ask?
  9. def

    def Sponsor

    This thread/comment was brought to my attention. IBKR does provide the ability to allocate a specific number of shares to multiple accounts via an allocation profile. We also provide the ability to submit orders for a specific number of shares for a single account directly in the Order Entry window. I've also been told we are looking into making the process simpler to do. I don't have an ETA though.
    dcwriter likes this.
  10. ZBZB


    Def, where have you been?
    #10     Feb 15, 2019