IB Customer Agreement questions

Discussion in 'Retail Brokers' started by JPB, Aug 29, 2001.

  1. JPB

    JPB

    I've been reading this board for some time, and decided to check out IB because of it. Well, I just opened an account there and was reviewing some of the documentation before I fund it, and came across this, which seemed a little strange to me. Please tell me what you think.

    from: http://www.interactivebrokers.com/html/retailAccount/sampleForms/custAgree.html

    22. Proprietary Trading: Customer authorizes IB to engage in proprietary trading, and to execute the proprietary trades of its affiliates, even though IB may simultaneously hold unexecuted Customer orders for the same products which could be executed at the same price. In this regard, Customer represents that Customer has read and understood ADDENDUM 5, "Customer Information Policies and Procedures."



    23. AUTHORIZATION FOR CUSTOMER TRADES TO BE EXECUTED AGAINST IB, IB CUSTOMER OR IB AFFILIATE ORDERS: Customer has no objection if securities, options or futures exchanges, or floor brokers on any such exchanges, trade orders for Customer's accounts with orders for: (i) other IB customers, or (ii) the proprietary accounts of IB or IB's affiliates. Customer authorizes IB, its affiliates, or their customers, to act as buyers with respect to orders given by Customer to IB to sell for Customer's accounts, or as sellers with respect to orders given by Customer to IB to buy for Customer's accounts on any securities, options or futures exchange or market. This consent is subject to the constitutions, rules, and regulations of the exchanges or markets on which such transactions occur and applicable law and may be revoked at any time on written notice to "Interactive Brokers - Attn: Compliance Department" via registered mail. Such revocation shall become effective ten (10) days after receipt by IB's Compliance Department.

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    So, am I agreeing that:

    1. IB can hold my order until they are done with their proprietary trades?
    2. That they can exucute my trades themselves if they so choose? If this is the case, can they, for example, execute my limit order at whatever price they choose, up to my limit? Can they hold my market order until they have processed all of their proprietary orders and then execute it themselves at whatever the market price might be at that point? Should I revoke their right to do this, or is it actually a good thing because I have an additional way for my order to be filled?

    Maybe I am being paranoid. This is my first direct access broker (I thought it was, anyway). Can anyone set me at ease?

    Thanks,

    JPB



     
  2. Turok

    Turok