IB subaccounts

Discussion in 'Retail Brokers' started by Edge-PL, May 11, 2005.

  1. Edge-PL

    Edge-PL

    Hello,
    Here is my question regarding IB's individual accounts:
    Is it possible to divide this account into sub-accts in order to remain LONG and SHORT open positions in the same instrument ( FX on IDEAL PRO ) simultaneously?

    best regards
    EDGE
     
  2. Steve_IB

    Steve_IB Interactive Brokers

    No you can't.

    Unless you have some kind of tax reason for this request I can't think of why you would want to do that?

    That sounds like the old dodgy FX broker's trick. A client is losing, and the broker says.... don't worry you don't have to lose money, simply lock in the trade by taking an opposite opening position.

    A great way to keep the client in the market and double their commissions ... but a complete con.

    If its another reason, please let me know, as we could look at amending it if there was a valid reason.
     
  3. Edge-PL

    Edge-PL

    My trading system is working on the 8 independent models on the one instrument.Can you tell me how to do that in IB?

    regards
    EDGE
     
  4. def

    def Interactive Brokers

    If you're working 8 different models in one account but using the same cash to fund all the models, it doesn't make sense (nor is it probably legal) for the broker to provide separate positions. Think of it simply from a tax point of view. The IRS doesn't care about your 8 models, they care about the profit/loss of the account. I know FX is slightly different than securities as securities regulations are much stricter but I don't this is an area that we'd want to make an exception to how we handle the accounts.

    If you are doing the trades manually, you can use the order ref field to mark each strategy. If automated, your code could automatically flag the trades as well.

    With each trade flagged, you could then sort out and evaluate your strategies.

    hopefully that can be a viable alternative.
     
  5. Edge-PL

    Edge-PL

    Can you help me, how does it work from the Financial Advisor level?Is it possible to place an orders for the multiple users accounts using this strategy with an API to automate trading process?

    regards
    EDGE
     
  6. Steve_IB

    Steve_IB Interactive Brokers

    Ok, I understand. There is no way to do this with an individual account. You would need to open an institutional account. But why not just do the record keeping yourself, and then just act on the net trade. This would save you alot in commissions.

    You could have 3 models showing sell Euro and 5 models showing buy Euro. If you split this into 8 accounts, this would result in 16 trade commissions (assuming you close the postion), as opposed to just buying the net, which would be 4 trade commissions. Unless I'm missing something, paying an extra 12 commissions doesn't seem to be worthwhile just to save some record keeping.
     
  7. Edge-PL

    Edge-PL

    Institutional account sounds great but....the problem is how to manage my clients accounts?I don't want to be a CPO.

    regards
    EDGE
     
  8. Steve_IB

    Steve_IB Interactive Brokers

    A friends and family advisor account, allows you to control up to 15 accounts. Information is available on the homepage of our site. If thats not suitable PM me all the details of your exact situation and I'll recommend a suitable account type.
     
  9. Well, it does make sense. Let me outline a simple example:
    1st model opens LONG position at 1.2970, 2nd model opens SHORT position at 1.2970. Now, 1st model has a stop-loss at 1.2940.
    When the price will reach 1.2940, 1st model will close LONG position BUT 2nd model will still hold open SHORT position.

    If I'd net both positions or if I wouldn't open any -due to opposite sides or signals, I wouldn't have a 1 SHORT position below 1.2940 level.
    I can have opposite positions on multiple accounts with Oanda, why I can't have them with IB?
     
  10. Steve_IB

    Steve_IB Interactive Brokers

    DT-Waw
    We probably should implement this as we would get double commissions! :D :D
    But lets break this down...

    This is what you want do do:
    Model 1: buys 1 at 1.2970. Places sell stop at 1.2940
    Model 2: sells 1 at 1.2970

    Now, your stop triggers at 1.2940.
    This leaves you short 1 at 1.2970 from Model 2.
    Total number of trades = 3

    This would be the same as doing absolutely nothing when they both give opposing signals.
    Placing a sell stop at 1.2940.
    Then when we trade though 1.2940 stop is triggered and you are short 1.
    Total number of trades = 1

    Other brokers allow you to do it because it encourages trading, but it's a con. Instead of having a flat position, you have 2 open positions in the market... which you will need to trade out of.
     
    #10     May 11, 2005