Can I be a non-professional trader with a general partnership at IB?

Discussion in 'Professional Trading' started by jimcrist, May 10, 2007.

  1. jimcrist


    I'm a individual non-professional equities trader. My wife & I formed a general partnership for tax purposes. That was fine with CyberTrader. Now I read on IB's website that:

    "Many exchanges classify customers as non-professional or professional. Exchange rules require that trusts and organizations (e.g. corporations, partnerships, LLCs and unincorporated businesses) must be classified as a professional."

    That's baloney. Here's a quote from the Nasdaq website:

    "In addition, non-commercial organizations solely owned by an individual and members of their immediate family (who themselves are non-professionals) utilizing the market data solely for their own personal investing may access data at non-professional rates. "

    Is IB really going to make me sign up as a professional just so they can collect (and probably keep) alot of data fees??? I trade on Nasdaq, NYSE, ARCA, INET and I like to see level II.

    Here's an old thread on the subject: partnership&pagenumber=1
  2. (1) IB can uses ANY criteria they like to classify you as a "professional".
    For example, opening an "institutional" account.

    (2) IB makes ZERO dollars on the exchange fees...
    It costs them money to give you free quotes.

    (3) There are dozens of quote vendors that may chose to classify you differently.

    (4) Generally...
    People are constantly trying to rip off the exchanges for data fees.
  3. If you open a friends and family account then open your GP account as a client account you will not be charged professional fees because the master account holder (you) is not a professional.

    IB stated this on ET a long time ago (you might be able to find the post) and it's definitely true, I know because I've done it.

    Note that F&F accounts mean you need to use TWS, you can't use webtrader, plus there are other quirks.

  4. jimcrist


    Thanks, Bob.

    I plan to use the TWS and the API. The API isn't one of the quirks, is it?

    Thanks again...
  5. The API will require you to allocate the trades, other than that it works just like the regular API.
  6. jimcrist


    Thanks SSB. If you'd be so kind, I PM'd you with another IB vs. Wealth-Lab Pro question. Thanks!
  7. jim you don't allow PMs so I can't reply :confused:
  8. Hey Jim,

    I'm think the only IRS requirement for an account to get tax treatment as a de facto husband & wife general partnership is that it has both of your names on it (i.e. joint tenancy). You don't need to create a formal partnership entity, and the account can still be an individual account.

    I haven't done this though, only read about it. So please let me know if I've got this wrong.

  9. jimcrist


    Sorry, I updated my email address and lost my access rights 'til Barron fixed it. I'm PMable again... thanks!
  10. zdreg


    if you think they are were going to rip u off why did you want to sign on?

    "Thanks SSB. If you'd be so kind, I PM'd you with another IB vs. Wealth-Lab Pro question. Thanks!"

    are you a kid passing a note underneath the desk?
    #10     May 11, 2007