One firm beats them all, again.

Discussion in 'Interactive Brokers' started by tonyf, Sep 21, 2022.

  1. newwurldmn

    newwurldmn

    I don't think any major retail broker is at risk of going under.
    What puts financial brokers out of business is proprietary trading or taking on some kind of securities risk outside the normal course of broker/custodian business.
     
    #11     Sep 21, 2022
    athlonmank8 likes this.
  2. JamesJ

    JamesJ

    Or bad risk/margin managment.
    See EUR CHF floor pull by SNB, which busted some FX Brokers.
     
    #12     Sep 21, 2022
  3. Nobert

    Nobert

    I was expecting the title to be ,One Firm To Beat Them All', but this one will do as well.
     
    #13     Sep 21, 2022
  4. tomkat22

    tomkat22

    Great.Now pay Baron for the free advertising. :D
     
    #14     Sep 21, 2022
    Nobert likes this.
  5. MrMuppet

    MrMuppet

    The only thing that comes to my mind is: you guys all paid for that :D
     
    #15     Sep 21, 2022
  6. newwurldmn

    newwurldmn

    I thought those were market makers who didn’t have recourse. Not real brokers.
     
    #16     Sep 21, 2022
  7. The software is trash and it always will be
     
    #17     Sep 22, 2022
  8. JamesJ

    JamesJ

    Some were some not.
    Problem was that in many cases losses exceeded customer balances.

    Ibkr had such an issue when oil went negative (google it, a canadian guy lost almost 10 Million on <100k account).
    Ibkr had software glitch and miscalculated margin.

    They however did handle that well and just wrote off the loss (around 100M) and compensated.
    They probably would not have been able to collect much anyway.
     
    #18     Sep 22, 2022
  9. newwurldmn

    newwurldmn

    Liquidity buffer is definitely important. The thesis of the OP is still wrong - profitability is not a sign that a broker is safe to put capital in. In fact, outsized profitability might be a red flag that the firm is selling icecream in the front and crack out the back.

    No financial company wants to be in the news for stealing Bill's family farm.
     
    #19     Sep 22, 2022
  10. TrAndy2022

    TrAndy2022

    I think the have such high margins and then they do not invest enough in infrastructure thus such high pretax gains can be possible. You cannot compare them with Goldman by the way.
     
    #20     Sep 22, 2022