According to the 1st qtr 2010 report, IB states that they have 140,000 customer accounts and over $16.7 billion in client assets, From wikipedia. http://en.wikipedia.org/wiki/Interactive_Brokers No matter it is $17 or $30, the point is that Interactive brokers's customer assets is far less than the biggest. As an customer, my concern is why more customer assets is attracted by those big names? IB's own financial condition maybe stable, but this is another issue. IB do have many large customers, but that does not affect that we have the right to discuss the issue here as an open forum. I think it is not wise that IB involves in this discussion, especially correct the number from $17 to $30. Does this change the fact that IB has much less customer's assets?
IB's minimum is $10K and offer commission based on volume. Besides that, any difference IB treat its customers with different size? I think it might exists another good fit for people trading his own $500K money. That's the purpose. For example, I hope to get excellent hard to borrow locations. If ML pro did better job than IB and entry price tag is $500K, then I can get some advantage than others with less money. Maybe ML pro can offer lower commission than IB, that's another advantage. And if introducing broker can add another level of fund withdraw security because they know me, then any other person cannot use fake identity or compromise my password, then that's another advantage.
At most firms I know of other than IB, all fees are negotiable and the default values are quite high, much higher than IB. This means that if you switch from IB, you will pay much higher fees unless you negotiate each fee aggressively. You would have to negotiate all of - commission rates for stocks, options, forex, and and each commodity. - ticket charges - overnight fees - margin rates - margins required - forex spreads - forex swap rates - quote fees - assignment and exercise fees - platform fees Unless you negotiate all of these in great detail with specific dollar values, and preferably get it all in writing, you will be paying 2 to 3 times the fees you pay at IB.
macintosh, I don't have any experience with ML Pro so I can't comment. Tonyzhou, sorry but I do make a point to correct inaccurate statements in a public forum. You just pointed out that you're using 2 year old data and Wikipedia so enough said on that. Regardless, you seem to project that client safety has a direct relationship to AUM. It surely is a factor you can consider but they are not necessarily related. ML runs a much different business than IB. You also say you're an IB client and are looking for a broker specializing in $500K accounts. perhaps there was a misconception so hence my reply. IB's services are tailored to the professional trader. We also believe our financial position is amongst the strongest in the business. In any event, good luck with your search and if you have other questions/concerns, feel free to ask.
No, I am claiming IB LLC does not conduct proprietary trading and that IB LLC is a separate entity. i.e. if TH blows out, IB LLC account/funds would not be impacted. To be specific and to refer a source: http://www.interactivebrokers.com.hk/en/p.php?f=ibgStrength&p=fin We manage our brokerage and market making businesses in separate companies, which are registered with local securities and/or commodities regulators. We maintain strict systematic and procedural separation between the two business lines and we do not commingle or utilize customer segregated assets for proprietary operations. Our brokerage companies conduct no proprietary trading.
I don't think there is anything in the law that prevents IB LLC from sending equity capital to Timber Hill, thus increasing IB LLC leverage and financial risk
At the peak of his power when JP Morgan was clearly the most potent financial force in the world, his bank was not the biggest. To the extent that any broker's financial statement is comprehensible (rehype etc.), IB's is an impressive one. When you take a look at how they handle margin in futures accounts and overall how their business model seems to shun risk (at least in their brokerage subsidiary ... I have no idea about Timber Hill) I would be hard pressed to fault their approach. I deal with three futures firms and keep the bulk of my cash balances at IB. That said, I could see someone making a "too big to fail argument" and contending that IB is not in that league and in the insane world we live in you would rather be at a bust out huge entity than a soundly run mid sized one. In an irrational world that inane argument has to be taken seriously!!
Tony, you should be glad that Def is participating, if you check on his message history you will most likely agree that he has his facts straight and has for many years provided forthright and truthful arguments which I cannot confirm of others. Obviously Def and anyone else have their own interests but so does anyone who replied to your posts. If I were you I would not start a lengthy discussions what large brokerages can offer to clients with 50+ million AUM what does it good to you? You have until now not provided us with what you actually want to do. What is your trading and investment style, what are your priorities? P.S.: The reason some large brokerages command a high asset base is because they cater to large clients. Its a give and take: They provide access to oversubscribed issues, they provide information that is not accessible to non-clients, in exchange for outrageously high commissions. The Fidelities and SACs could not care less about being charged a 100% or more commission mark-up in exchange for "whispers" (whether legal or grey zone...you get the point), short-inventory of hard-to-borrows, and other goodies. But its pointless to think about it, your account size does not qualify, period. Think about what you really want to do, then narrow down the choices to those brokers who can offer that and then you eliminate those who you do not perceive as being "safe" enough or whatever other criteria matter to you.