Closing my IB account

Discussion in 'Interactive Brokers' started by Trade_Cents, Aug 28, 2002.

  1. Perhaps a solution would be a special server at a different location which would reverse your position if you submit an order to it.

    It would be alot like a customer service workstation except it would do one thing- get you out now and it would be automated.
    #21     Aug 28, 2002

  2. try FFastTrade US LLC

    #22     Aug 28, 2002
  3. become a local on one of the exchanges

    cme ... trade sp500 / nasdaq100 futures

    cbot trade dow futures

    nymex trade the energy complex

    then you do not have to worry about system outages

    only out trades ... costing you thousands

    #23     Aug 28, 2002
  4. My 2 cents. Trade with IB to get low commish on the 97% of the time they are up. Establish an alternative account with option permissioning w/ any other broker-even old fashioned telephone broker. Having a backup broker will work in most cases except for when the system hangs whle you have an unfilled order since you don't know whther you are flat, long, short.,etc. That is why it pays to brush up a little on your options.

    Scenario 1: You have a position on and system is down. Pick up the phone and hedge with stock to flatten or establish synthetic position so you limit downside and still participate upside.

    WORST CASE is...
    Your orders hang so you don't know whether you are long 1000, or flat or sometimes in a fit of panic you press the button more than once so now the ? is are you long, flat , short 1000,2000,Yikes...

    Call your option guy and hedge at least 1/2 your position.As the market move against you on your possible position, buy more protection.

    Eg you are long 1000 shares of xyz and you don't know if you sold it out since system went down when you submitted your sell 1000.
    Hedge 1/2 of position initially and watch it. If xyz keeps going down buy a couple more, worse case you did flatten out the stock and you are long puts on an averaging down basis. Your screwed is xyz whips back up hard, BUT you've got the gamma of the option working for you so as it whips back up you are getting hurt less and less.

    Bottom Line: Any system outages will COST you money! That is the price WE pay for the benefit of waking up, rolling out of our bed and being ready to trade anywhere in the US. The question is will the losses be manageable or catastrophic.
    #24     Aug 28, 2002
  5. Your kidding, right?
    #25     Aug 28, 2002
  6. You will shortly be in that club ...
    #26     Aug 28, 2002
  7. Exactly. I understand system downtime is going to happen but not being able to phone in an order is unacceptable.
    #27     Aug 28, 2002

  8. LOL

    i could ask scalpers the same thing. i always knew these guys put their brokers' kids through college by churning their accounts into the stratosphere; it's still a mild shock to see hard numbers though.

    Ever wonder why growth stocks always get hit harder than value stocks when the boom goes bust? Because they tend to be smaller companies and/or have higher fixed costs relative to incoming profit (like hard dollar commission costs).

    Lean businesses with low absolute costs relative to the profit stream can weather drought periods without fear of going under. Strong survivability.

    But expensive businesses with high fixed costs- i.e the ones that need significant profits month in and out just to pay their nut- are much more likely to die of thirst when the drought comes. Weak or even zero survivability.

    The only businesses where high fixed costs or razor thin margins make sense are the ones with extremely high probabilities of continuation, a built in structural edge, or both. Grocery store chains can have razor thin margins, for example, because they have mass economy of scale and people always need to eat.

    Small traders are the exact opposite of grocery stores- high exposure to drought, no built in structural edge, finite capital, nowhere to hide when profits take a siesta but costs don't. They are the WORST candidates for the high cost model business. In fact, the real world odds are SO tilted against the "at home market maker" or the "off the floor floor trader" that the only way he could really survive and thrive is if there were a temporary strong aberrance in his favor, like, say, a monsoon in the desert- or a major bull run in stocks, where so much cash was flowing it swamped all other negative considerations. Like the bull run we just saw. Which is now over. Hmmm...

    But hey, different strokes for different folks.
    #28     Aug 28, 2002
  9. How much a day do you pay in commisions?
    #29     Aug 28, 2002
  10. So, if the system is down, then what is the status of your server held stops?
    #30     Aug 28, 2002