IB: The Party Is Over

I think the point that is being overlooked is no, it's not these "1000 accounts that spend $10.00 per day or 10 accounts that wheel $10,000.00), this is not issue. If you've ever wondered why their customer service is so wretched at IB it's because they have THOUSANDS of accounts that do $40-80.00 per day, and soon most of these accounts WILL NOT BE TRADING ANYMORE UNDER ANY CIRCUMSTANCES ANYWHERE. These new rules threaten the stability of the type of firms traders like us have gravitated. Wherever you have your account make sure they have adequate reserves and insurance. Many of these firms where fast moving traders have been their bread and butter will go out of business in the next few months. This includes a lot of the paid market services as well.

 

traderx21: "If you've ever wondered why their customer service is so wretched at IB it's because they have THOUSANDS of accounts that do $40-80.00 per day, and soon most of these accounts WILL NOT BE TRADING ANYMORE UNDER ANY CIRCUMSTANCES ANYWHERE. "


so maybe one good thing, for the >25K'rs , they can look forward to better customer service from their brokers...

 

Is this a comical thread or what? LOL

I am the perfect example of a small guy. I have averaged 35k income the last five years.

I drive an 18 year old chevrolet caprice. I have several credit cards with no balance. I have no debts, period.

Whats the point? The point is this rule change is not going to stop me from trading for long. Right this minute, I am 900 dollars short of 25k. Haha (small guy laughter)

I watch my friends and others wrap themselves in debt and live a much grander life style than myself. But, I know I can't do that. I have to live frugally in order to see if I can fufill my dream--trading for a living.

Finally, finally my nonflamboyant lifestyle is going to pay off. This rule change is just a small bump in the road in my highway of dreams.

I don't blame IB for anything. The SEC of the previous administration is to blame. The four to one credit margin is optional Just because someone offers me a line of credit, doesn't mean I will take them up on it. I never heard of 10 to 1 margin on stocks before, but that sounds a little nutty to me.

Lets face it. This stock market stinks! I mean the nazdaq looks like it has no bottom, and so do the 40 million Americans portfolios and 401-k's who are tanking also. This market is capable of tanking BIG time. I mean a 15 to 20% drop in one day. I believe Chairman Peterffy knows what the risks are, and if he doesn't want to go 4 to 1 right now, thats fine with me.

To those traders who are smaller than me. Don't give up and keep a positive attitude.

I love IB. I got some great fills today on Best ECN. It was unreal.

 

Unreal fills on Best ECN? That's because you get the small trader discount, the ECN cuts up to 20 cents off the price if the account is <25k. It's a courtesy.

For Awesome fills, you need an account < 5k.

 

Ok Traders

I can't take this anymore!!!

It'ssssssssssssss definition time.

LOOSE - not fastened; unbound; make less tight, firm or compact

LOSE - to suffer loss

So daytraders can "lose" their money, not loose.

Thanks

 

interesting read, my two cents.....

let the dust settle before you all jump to conclusions about how IB manages a business, makes money, cares about it customers, etc. I think IB has a pretty good record for fighting for a level playing field. Who else offers institutional commissions for all clients regardless of size? For starters the brokerage alone is profitable and I assume intends to stay that way. From what I read/hear the regulators are strictly interpretting certain rules and the firm tends to err on the side of caution. Hopefully you can look at the firms past track record before passing judgement.

As for 4:1 margin. Again, let the dust settle. I've a great deal of experience in volatile markets and have seen firms blow out by extending too much margin. Do you think all traders should be extended 4:1 margin? Sure, I know, you all manage your risk perfectly. Have you ever disobeyed a stop? Got caught on the wrong side of a surprise announcement? Let a loser run, etc. 4:1 leverage could make some losses pretty dramatic in a short amount of time. These losses will have to be eaten by the house (brokerage) putting everyone at risk. Margin is a double edged sword. It will interesting to read the bad loan or write-off sections on the balance sheets of some brokerage firms as we move forward. In any event, perhaps IB will think up an innovative way to extend margin beyon 2:1. (possibly intraday as mentioned by vikana) Who knows? For the immediate future, if your trading is so dependent on the extra leverage, you'll have to pay higher commissions and go elsewhere.

 

My comment is simple. My wife had a question so she logged into IB real time chat yesterday and asked a representative a question. She received her answer pronto. It was good service - end of story. FWIW. :eek:

 

Time to rally around IB? I wonder if we aren't off on the wrong track totally, maybe IB is our only salvation. Of all the posts maybe Vikana's from earlier today was the best? I was thinking earlier this evening about all the firms we rate in the Brokers section, there is probably 70 to 80 of them. And as I stated in one of earlier posts probably 80% of them will be gone in six months. MERRILL LYNCH, SALOMAN SMITH BARNEY, MORGAN STANLEY WON!!! They had the regulators in their back pocket!!! These firms we deal with are like a fly on a horse's ass. They are getting rid of those "firms" and their customers (us).

 

I have to believe that the managers of IB will do what's in their best interest, and since their in business their best interest is to make sure that their customers are happy and that the company is financially stable. Both are important. I'm not a customer yet but if the comments on this board are honest, they sound like a good company to do business with. The prudence they've shown in keeping the margin at 2:1 and their reluctance to (initially anyway) not to allow <25k accounts to "pattern daytrade" are good signs in my opinion.
I do think the new rule STINKS. Even though it doesn't effect me personally it does effect others and in other circumstances, I could be them. Also, I don't understand the reasoning for the new rule. Maybe someone was worried that the market crash would take a lot of people out of mutual funds and into daytrading and screw up the market? Haven't heard that one yet, made it up myself. It could be some kind of political subjugation thing too. Who knows.
Rigel