Why IB ranked so low in 2006 US futures brokers list ?

Discussion in 'Retail Brokers' started by joesan, May 28, 2007.

  1. joesan


    See the list attached.

    I am curious why IB ranked so low in this list ? My impression is that IB should be way up in this ranking list. Is this due to the criteria of the ranking list ?
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  2. This is a customer equity count - has nothing do with customer satisfaction/etc. Perhaps most big commodity trading accounts are big $$ and like full service.

    For the same reason T Boone pickens probably isn't going to home depot himself to redo his bathroom.
  3. joesan


  4. I have been with IB for years and I follow the rankings. They have actually been inching up the list every year.

    In terms of financial stability- which is more important - it is on the top of the list according to Weiss Research.
  5. When you posted this list, you unfortunately left out the title of the list, and all of the footnotes which help to explain how the list was derived. You if you're really "curious" and want an intelligent response, post the entire page, or a link to it.

    That said, I'm primarily a futures trader with IB. However, most of my equity is held in the Securities account until it is needed in the futures account. It's only needed there if I hold a position overnight.

    So the point might be that it's really quite difficult to measure the equity in IB's futures company, because most people are shifting money between futures and equities within the Universal account that IB offers.

  6. joesan


    Well, I did not intentionally try to hide the entire name of the ranking, actually I got the screenshot of the list from an article at this web address:


    It is from a popular Chinese futures information website, in this article the author commented on the 2006 US futures brokerage ranking list.
    I could not find the exact entire name of the ranking list in this original article, but according to the author, it is a list made by CFTC and published on "futures" magazine.

    Regarding my question, the author of the original article also gave out an answer. He /She says that in IB's case, the customer can use one single account to trade futures/stocks/options of different exchanges, so the the part of the equity that exceeds the necessary overnight margins for futures trading will be regarded as equity for stocks and not reported to CFTC, t/f greatly underestimated. I am not sure if this is the real reason, so I raised the question in ET bbs.

  7. Exactly what I said in my post. I think he is exactly right....IB's futures equity is definitely underestimated. In the typical futures account equity is held either in cash, or in T-Bills, but always in the futures account. IB on the other hand holds all equity in the Universal account (securities account), until it is needed for overnight margin, at which point it is shifted. What this means is that there is a certain amount of money held outside the futures account at IB, to the customers benefit. What percentage of equity this represents is a function of how many daytraders are at IB (because daytraders never hold money directly in a futures account at IB), and how much money the typical IB trader holds in reserve over his minimum margin....because an excess funds are all held in the Univeral (securities) account. Any way you slice it, IB's futures equity is underestimated.

  8. Hey OT! My Chinese comprehension is only so-so :p but that's a list of top FCM's ranked by customer funds. I don't know if "most people" are shifting money back and forth but certainly others are doing as you.

    Two things keep IB relatively low on the list. One they're primarily a retail shop. A customer of PIMCO's ilk can elevate a firm pretty high. Also IB really isn't in the CTA game.

    Frankly I'm surprised IB is so low but also keep in mind futures are leveraged and retail account sizes are typically small.
  9. def

    def Sponsor

    excess funds on the commodity side are moved to the securities account each evening. that number is not a true reflection of the amount of funds at IB.
  10. joesan


    Thanks guys for your clarification.

    Oldtrader, you mentioned T-bills. I have one further question about T-bills. Currently part of the money not used as margin exists as cash in my IB accounts. If I buy T-bills, will this bring me more interest gains than the interest that IB is paying to its customers.
    #10     May 28, 2007