IB: The Party Is Over

Discussion in 'Interactive Brokers' started by LionSec, Aug 27, 2001.

  1. LionSec


    IB doesn't want daytraders at their firm.

    They decided not to allow daytrading in cash accounts.

    They decided not to give 4 x margin to daytraders.

    Other brokers allow daytrading in cash accounts and give 4 x margin to daytraders.

    The party is over at IB. It's time to move your money to another broker.
  2. Atlantic


    as long as ib keeps on offering the stable technology - fast executions and the lowest commissions around - i guess the party is not over.

    and daytrading in a cash account - come on - you won't get happy with it. if you can't short, it would be like you can't use your car when it's raining.
  3. LionSec


    Restricting trading in cash accounts means that they will lose all daytraders with less then 25.000$ in account.

  4. LionSec


    Oh and I forgot...

    Daytraders with more then 25.000$ in account will leave because they don't get 4 x margin.

    It's clear. IB doesn't want daytraders at their firm.
  5. Turok


    >Oh and I forgot...

    Yeah...what you forgot is that you don't speak for other traders, that's what you forgot.

    >Daytraders with more then 25.000$
    >in account will leave because they
    >don't get 4 x margin.

    Uh...I'm not looking for 4x margin. I rarely use the 2x that they offer me now. Not every profitable trader is balls to the wall (in fact, I'll bet there are more profitable ones who are more conservative).

    >It's clear. IB doesn't want daytraders
    >at their firm.

    IB's got a pretty good history of being good to the little guy. They were vocal in their opposition of this rule (were you?). I'm betting that after a period of watching, if there is an interpretation that stands which allows daytrading in a cash account, they will adopt it. There is much chaos and differing interpretations at the moment and if I were them I'd want to see what shakes out before putting my a** on the line regulation wise.

    For now, why don't you just speak for yourself and move your money rather than attempting to claim you know what the rest of us will do.

  6. LionSec


    There is no new rule regarding cash accounts.

    According to their interpretation, also with the old margin rules, trading in cash accounts would not have been legal.

    Of course what I write is my opinion. And my opionion is that if you are a daytrader, you should switch to another firm. I already did. And I won't come back until they don't offer me a more "daytrader friendly" deal.

    IB's interpretation of the rules is ridiculous. There is no reason not to give us 4 x margin and daytrading in cash accounts. Other firms do it. So don't tell me it is not possible.

  7. If high leverage is what you crave, you can either go pro, or just trade futures. You'll get 10:1 in either case.

    Actually, I propose that IB allows 4:1 day trading margin and 2:1 for overnights. That would give most of us what we're asking for, and reduce the overnight risks for them (and us). [For futures margin is obviously different than for stocks, but since the question was regarding leverage ... ]

  8. LionSec


    Please... the only good part of the new margin rules is 4 x margin for daytraders, also overnight.

    Why do IB customers get only the bad parts of the new rules?

  9. Turok


    >There is no new rule regarding cash
    >accounts. According to their
    >interpretation, also with the old
    >margin rules, trading in cash
    >accounts would not have been legal.

    There have been numerous brokers that in the past have interpreted the rule to say that there is no daytrading in cash accounts so this isn't a new battle. The new margin rules are forcing some brokers to be a bit more creative and push the edge of the cash account interpretation envelope, but don't try to say that in the past one could simply open up a cash account at any old broker and daytrade (T-0) it, because it ain't so. I tried it when I first started and was pissed when I found out that I needed to open a margin account (I had no plans to learn to trade on margin)

    >There is no reason not to give us
    >4 x margin and daytrading in cash

    There is a very BIG reason not to give 4x margin -- it's called RISK. To say "there is no reason" just makes you look silly. In any industry, some firms are credit aggressive and some aren't. IB apparently isn't but they have a very solid reason (they're here...Harbor isn't)

    >Other firms do it. So don't tell me
    >it is not possible.

    Didn't say it wasn't possible. It's possible alright -- possible to end up like any number of firms that have crashed and burned through the less than careful extension of credit.

  10. silvius


    I find it hard to believe that someone with less than $25,000 can actually day trade full time and expect to make a decent living anyway. Even if you were to make 400% return on your captial, after taxes and health insurance, you can expect to take home less than $50,000 annually. What would happen if you had a bad year and made only say 100% return on your capital??? It's seems to me that the better option would be to keep your full time job, keep your $25,000 in a cash account, and swing trade for extra cash. Perhaps I am too conservative. . .
    #10     Aug 27, 2001