Interactive Brokers (Best Kept Secret)

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
vbrbnd
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Re: Interactive Brokers (Best Kept Secret)

Post by vbrbnd »

bling wrote: Thu Oct 22, 2020 10:21 pm i found that example but it's not particularly useful for me because i'm not buying/selling 30 million shares.
the bottom example on https://interactivebrokers.com/en/index.php?f=713&nhf=T is 200,000 shares @ $5 remove liquidity (meaning a marketable order) on NASDAQ/Island. Commission is .0035 / share (<= 300,000) and the NASDAQ/Island exchange fee (see https://interactivebrokers.com/en/index.php?f=936&nhf=T) for removing liquidity on NASDAQ (>= $1/share) is .003 / share. So the total commission + fee is .0065 / share (this is where the $700 IB commission and $600 Island NASDAQ fee come from on the example), which would exceed fixed pricing of .005 / share, and this holds even if you were selling only 30-100 shares.

Note the exchange fees change based on what type of order you have entered, so it is possible to, for example, issue a non-marketable (add liquidity) non-displayed order and the exchange fee would be .000 / share, so the tiered pricing would be cheaper than fixed.

For someone like me the fixed tier pricing is probably cheaper most of the time (TBH the specifics of types of orders on exchanges is over my head).
bling
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Re: Interactive Brokers (Best Kept Secret)

Post by bling »

vbrbnd wrote: Thu Oct 22, 2020 11:32 pm
bling wrote: Thu Oct 22, 2020 10:21 pm i found that example but it's not particularly useful for me because i'm not buying/selling 30 million shares.
the bottom example on https://interactivebrokers.com/en/index.php?f=713&nhf=T is 200,000 shares @ $5 remove liquidity (meaning a marketable order) on NASDAQ/Island. Commission is .0035 / share (<= 300,000) and the NASDAQ/Island exchange fee (see https://interactivebrokers.com/en/index.php?f=936&nhf=T) for removing liquidity on NASDAQ (>= $1/share) is .003 / share. So the total commission + fee is .0065 / share (this is where the $700 IB commission and $600 Island NASDAQ fee come from on the example), which would exceed fixed pricing of .005 / share, and this holds even if you were selling only 30-100 shares.

Note the exchange fees change based on what type of order you have entered, so it is possible to, for example, issue a non-marketable (add liquidity) non-displayed order and the exchange fee would be .000 / share, so the tiered pricing would be cheaper than fixed.

For someone like me the fixed tier pricing is probably cheaper most of the time (TBH the specifics of types of orders on exchanges is over my head).
the thing is that the minimum order for fixed is $1 while the minimum for tiered is $0.35. using the NASDAQ exchange fee of 0.003, that means tiered is still better than fixed if you buy/sell less than 216 shares.
Neus
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Re: Interactive Brokers (Best Kept Secret)

Post by Neus »

Does anyone know if we can buy fractional PUT option

as 1 option is for 100 shares, it can get expensive to buy

I wonder if with fractional shares, we can buy 1/10 of the option
Raraculus
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Re: Interactive Brokers (Best Kept Secret)

Post by Raraculus »

A few days ago, I got slapped on the wrist on a margin call. I bought some stock on leverage mid-day. Since it went through, I assumed it was okay. And, I thought I was being conservative with this stock purchase.

To their credit, Interactive Brokers did send me a warning on their app that they would liquidate shares late that afternoon. I was just too busy to even notice my phone. They went ahead, liquidating some shares at the end of day.

After I realized what happened, I started to figure out why? It turns out that Interactive Brokers will allow you to exceed their margin limits for intraday trading. However, at the end of the day, the margin limits are still enforced.

This whole fiasco cost me... $3.24. :oops:

The lesson? Pay close attention to margin limits. Don't get too close to them, either. I'm good for now. Let's hope the markets this week will survive this Tuesday. :shock:
Tanelorn
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Re: Interactive Brokers (Best Kept Secret)

Post by Tanelorn »

Neus wrote: Sat Oct 31, 2020 5:15 am I wonder if with fractional shares, we can buy 1/10 of the option
No, US stocks only and only those off their allowed list.

https://www1.interactivebrokers.com/lib ... d=83261303
corp_sharecropper
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Re: Interactive Brokers (Best Kept Secret)

Post by corp_sharecropper »

Looks like IB is working on implementing fractional shares within the basket trading framework. https://www.reddit.com/r/interactivebro ... &context=3

I'm looking forward to seeing how it gets implemented.
Neus
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Re: Interactive Brokers (Best Kept Secret)

Post by Neus »

Anyone using paid market data subscription and Research Subscriptions offered by IB?

Which one is good to have?

I got this one at topmost checked as fee waived but doesn't seem to ever get any research

Research Platform, brokerage, nonprofessional
IBIS is a suite of research tool that are powered by research subscriptions, listed below for the low cost of $69/month. We recommend the heavily discounted "Research Essentials" subscription bundle. One month free trials are available for all research subscriptions!
News: Dow Jones, Reuters, Briefing.com, theflyonthewall.com.*
Fundamentals: Financial statements, consensus estimates, ratios, SEC filings, insider trading reports, and more.*
Live Event Calendars: Earnings events, economic indicators, IPOs, splits.*
Analyst Research: Equity, ETF, and credit reports from Morningstar and Zacks.*
Analyst Upgrade/Downgrade Bulletin: Tracks sell-side research activity.
Market Commentary: Macro economic outlook, industry focus, intraday market updates, and more.
Requires Data Subscription
xerxes101
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Re: Interactive Brokers (Best Kept Secret)

Post by xerxes101 »

Anyone else experiencing issues with ACATS transfer to IBK :!: R...it keeps getting rejected and I have no idea why :?: ...no code is provided as far as why the rejection is taking place so it is difficult to troubleshoot :oops: .
stormcrow
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Re: Interactive Brokers (Best Kept Secret)

Post by stormcrow »

xerxes101 wrote: Tue Jan 26, 2021 7:49 am Anyone else experiencing issues with ACATS transfer to IBK :!: R...it keeps getting rejected and I have no idea why :?: ...no code is provided as far as why the rejection is taking place so it is difficult to troubleshoot :oops: .
I'd recommend chatting with them. That seems the quickest way to get support.
bling
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Re: Interactive Brokers (Best Kept Secret)

Post by bling »

xerxes101 wrote: Tue Jan 26, 2021 7:49 am Anyone else experiencing issues with ACATS transfer to IBK :!: R...it keeps getting rejected and I have no idea why :?: ...no code is provided as far as why the rejection is taking place so it is difficult to troubleshoot :oops: .
talk to support. i've done multiple ACATS transfers in the past and they all get processed within a day or two with the cost basis following a week later. in my case it's all ETFs so i don't expect anything otherwise.
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whodidntante
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Re: Interactive Brokers (Best Kept Secret)

Post by whodidntante »

bling wrote: Tue Jan 26, 2021 9:20 am
xerxes101 wrote: Tue Jan 26, 2021 7:49 am Anyone else experiencing issues with ACATS transfer to IBK :!: R...it keeps getting rejected and I have no idea why :?: ...no code is provided as far as why the rejection is taking place so it is difficult to troubleshoot :oops: .
talk to support. i've done multiple ACATS transfers in the past and they all get processed within a day or two with the cost basis following a week later. in my case it's all ETFs so i don't expect anything otherwise.
Yep. You can also ask the source broker why they rejected it, and sometimes, you have to.
xerxes101
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Re: Interactive Brokers (Best Kept Secret)

Post by xerxes101 »

Thanks guys...will give this another shot.
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Steve Reading
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Re: Interactive Brokers (Best Kept Secret)

Post by Steve Reading »

xerxes101 wrote: Tue Jan 26, 2021 8:52 pm Thanks guys...will give this another shot.
This might not be the case but if in the ACAT transfer (say, you did "transfer all") there are securities that cannot be traded at IBKR, they will reject the entire transfer. Speaking from experience.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
SlowMovingInvestor
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Re: Interactive Brokers (Best Kept Secret)

Post by SlowMovingInvestor »

Since this thread deals with IB, I had a question:

Does one need to subscribe to a premium IB package to get futures trading data ? I'm not interested in trading futures and am do not need live data, I just wanted to do some programming with their API and wanted to get futures data for that.
mike999
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Re: Interactive Brokers (Best Kept Secret)

Post by mike999 »

Image

What the heck are they doing?
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dmcmahon
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Re: Interactive Brokers (Best Kept Secret)

Post by dmcmahon »

Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
rchmx1
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Re: Interactive Brokers (Best Kept Secret)

Post by rchmx1 »

dmcmahon wrote: Thu Jan 28, 2021 9:19 pm Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
I'd call this a very generous interpretation. He went out of his way to say that IB had the resources to cover the financial obligations this event has and continues to generate, but he wasn't sure about the solvency of other brokerages. If that is true, then his firm doesn't need protection. And what is he protecting his clients from? Losing money in the stock market? Isn't that a nice thought, that IB or any other brokerage in reality gives zero sh*ts about.

I would say the more accurate interpretation is that IB chose to protect one source of revenue, the clearance houses etc, at the detriment of another source of revenue, it's retail clients. IB absolutely does not get to come off as a valient actor in this situation.
latak215
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Re: Interactive Brokers (Best Kept Secret)

Post by latak215 »

T use ib light. no charge for stock and etf and a few covered calls that are way high expected to expire worthless in a month to generate $20 a month commission to get real time data for free. happy. thanks
saver007
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

dmcmahon wrote: Thu Jan 28, 2021 9:19 pm Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
+1
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dmcmahon
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Re: Interactive Brokers (Best Kept Secret)

Post by dmcmahon »

rchmx1 wrote: Thu Jan 28, 2021 10:03 pm
dmcmahon wrote: Thu Jan 28, 2021 9:19 pm Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
I'd call this a very generous interpretation. He went out of his way to say that IB had the resources to cover the financial obligations this event has and continues to generate, but he wasn't sure about the solvency of other brokerages. If that is true, then his firm doesn't need protection. And what is he protecting his clients from? Losing money in the stock market? Isn't that a nice thought, that IB or any other brokerage in reality gives zero sh*ts about.

I would say the more accurate interpretation is that IB chose to protect one source of revenue, the clearance houses etc, at the detriment of another source of revenue, it's retail clients. IB absolutely does not get to come off as a valient actor in this situation.
Not sure what you think he should do instead. Allow trades to continue with no assurance that the other side of the bet is covered, and put his entire firm at risk of an implosion that leaves everyone trapped for 2 years in a legal limbo?
the way
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Re: Interactive Brokers (Best Kept Secret)

Post by the way »

dmcmahon wrote: Fri Jan 29, 2021 12:19 am
rchmx1 wrote: Thu Jan 28, 2021 10:03 pm
dmcmahon wrote: Thu Jan 28, 2021 9:19 pm Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
I'd call this a very generous interpretation. He went out of his way to say that IB had the resources to cover the financial obligations this event has and continues to generate, but he wasn't sure about the solvency of other brokerages. If that is true, then his firm doesn't need protection. And what is he protecting his clients from? Losing money in the stock market? Isn't that a nice thought, that IB or any other brokerage in reality gives zero sh*ts about.

I would say the more accurate interpretation is that IB chose to protect one source of revenue, the clearance houses etc, at the detriment of another source of revenue, it's retail clients. IB absolutely does not get to come off as a valient actor in this situation.
Not sure what you think he should do instead. Allow trades to continue with no assurance that the other side of the bet is covered, and put his entire firm at risk of an implosion that leaves everyone trapped for 2 years in a legal limbo?
I also think his answer was reversed, and therefore fishy. If he's worried the "other side of the bet" doesn't have the money, then that person must be a buyer, and the IB client must be a seller. Then why is IB blocking buys instead of sales then?

And he could make buys on IB safe by just requiring settled funds to purchase, instead of banning buys completely.
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dmcmahon
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Re: Interactive Brokers (Best Kept Secret)

Post by dmcmahon »

the way wrote: Fri Jan 29, 2021 12:54 am
dmcmahon wrote: Fri Jan 29, 2021 12:19 am
rchmx1 wrote: Thu Jan 28, 2021 10:03 pm
dmcmahon wrote: Thu Jan 28, 2021 9:19 pm Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
I'd call this a very generous interpretation. He went out of his way to say that IB had the resources to cover the financial obligations this event has and continues to generate, but he wasn't sure about the solvency of other brokerages. If that is true, then his firm doesn't need protection. And what is he protecting his clients from? Losing money in the stock market? Isn't that a nice thought, that IB or any other brokerage in reality gives zero sh*ts about.

I would say the more accurate interpretation is that IB chose to protect one source of revenue, the clearance houses etc, at the detriment of another source of revenue, it's retail clients. IB absolutely does not get to come off as a valient actor in this situation.
Not sure what you think he should do instead. Allow trades to continue with no assurance that the other side of the bet is covered, and put his entire firm at risk of an implosion that leaves everyone trapped for 2 years in a legal limbo?
I also think his answer was reversed, and therefore fishy. If he's worried the "other side of the bet" doesn't have the money, then that person must be a buyer, and the IB client must be a seller. Then why is IB blocking buys instead of sales then?

And he could make buys on IB safe by just requiring settled funds to purchase, instead of banning buys completely.
I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client. At which point his firm is effectively short the shares of a stock that’s going to Pluto.

Edit: then imagine the bankruptcy. Investor A: I have 100 shares of VTI that I’d held for 10 years and it was worth $200/share so I should get $20,000 out of the corpse of IB. Investor B: I had 10 shares of GME at $8k/share that I’d held for 10 minutes so I should get $80,000! Underlying assets are: 100 shares of VTI. Split 20/80, the VTI investor gets $4k and the GME investor gets $16k. After legal fees, that is.
rchmx1
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Re: Interactive Brokers (Best Kept Secret)

Post by rchmx1 »

dmcmahon wrote: Fri Jan 29, 2021 12:57 am
the way wrote: Fri Jan 29, 2021 12:54 am
dmcmahon wrote: Fri Jan 29, 2021 12:19 am
rchmx1 wrote: Thu Jan 28, 2021 10:03 pm
dmcmahon wrote: Thu Jan 28, 2021 9:19 pm Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
I'd call this a very generous interpretation. He went out of his way to say that IB had the resources to cover the financial obligations this event has and continues to generate, but he wasn't sure about the solvency of other brokerages. If that is true, then his firm doesn't need protection. And what is he protecting his clients from? Losing money in the stock market? Isn't that a nice thought, that IB or any other brokerage in reality gives zero sh*ts about.

I would say the more accurate interpretation is that IB chose to protect one source of revenue, the clearance houses etc, at the detriment of another source of revenue, it's retail clients. IB absolutely does not get to come off as a valient actor in this situation.
Not sure what you think he should do instead. Allow trades to continue with no assurance that the other side of the bet is covered, and put his entire firm at risk of an implosion that leaves everyone trapped for 2 years in a legal limbo?
I also think his answer was reversed, and therefore fishy. If he's worried the "other side of the bet" doesn't have the money, then that person must be a buyer, and the IB client must be a seller. Then why is IB blocking buys instead of sales then?

And he could make buys on IB safe by just requiring settled funds to purchase, instead of banning buys completely.
I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client. At which point his firm is effectively short the shares of a stock that’s going to Pluto.
"Luckily enough, we have 9 billion dollars of equity, so we don't have a problem." ~ Thomas Peterffy

So what is the problem? If, as the man says himself, they don't have a problem "if [their] customers are not able to pay for their losses and so they have to put up [IB's] own money," because they "have 9 billion dollars of equity," then what exactly is their justification for removing GME from new purchases?

You're reading into the situation something perfectly reasonable, but the fact is that in this interview Mr Peterffy himself contradicts what you're saying. He explicit states that they have a huge amount of equity, and robust risk management software, so they "haven't gotten hurt." Then, directly after making those statements, he follows by saying, "I cannot say the same thing with full confidence about other brokers. So I'm extremely concerned." This was his answer to the question, "Why have you, like Robinhood, decided to restrict trading in shares like GME." Does this really not strike you as a suspicious answer? Boiled down, his response is, "We have the capital and software in place so that we're fine, and yet we still restricted trading because of problems with other brokerages." Wut??

Also, and you might be more knowledgeable here then me, but when you say, "I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client," is that really how things work? If I place an order for a very illiquid asset, and there is no seller, then my buy order just sits there not completing, surely. Just the fact that my broker has sent my order to the clearing house doesn't mean that anyone is on the hook for anything, if there is no seller on the other end of the transaction. Right?
mike999
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Re: Interactive Brokers (Best Kept Secret)

Post by mike999 »

dmcmahon wrote: Fri Jan 29, 2021 12:57 am I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client. At which point his firm is effectively short the shares of a stock that’s going to Pluto.
IBKR has already a 100% margin requirement for buying those stocks. It should be rather simple for the clearing house at that point. They get from one party the 100% covered order. The question at that point is only if the selling party delivers the stock. If yes the trade is done, if no the buyer gets his money back. If it doesn't pass the clearing house the buyer doesn't get the stocks. Why would the broker owe anything to the client if the clearing house hasn't validated the trade yet? Isn't this why there are clearing houses in the first place?
ChrisBenn
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Re: Interactive Brokers (Best Kept Secret)

Post by ChrisBenn »

dmcmahon wrote: Fri Jan 29, 2021 12:57 am
the way wrote: Fri Jan 29, 2021 12:54 am
dmcmahon wrote: Fri Jan 29, 2021 12:19 am
rchmx1 wrote: Thu Jan 28, 2021 10:03 pm
dmcmahon wrote: Thu Jan 28, 2021 9:19 pm Please watch the CNBC interview with Peterffy today, he explains what’s going on. He’s protecting the firm and it’s clients from an MF Global type event IMO.
I'd call this a very generous interpretation. He went out of his way to say that IB had the resources to cover the financial obligations this event has and continues to generate, but he wasn't sure about the solvency of other brokerages. If that is true, then his firm doesn't need protection. And what is he protecting his clients from? Losing money in the stock market? Isn't that a nice thought, that IB or any other brokerage in reality gives zero sh*ts about.

I would say the more accurate interpretation is that IB chose to protect one source of revenue, the clearance houses etc, at the detriment of another source of revenue, it's retail clients. IB absolutely does not get to come off as a valient actor in this situation.
Not sure what you think he should do instead. Allow trades to continue with no assurance that the other side of the bet is covered, and put his entire firm at risk of an implosion that leaves everyone trapped for 2 years in a legal limbo?
I also think his answer was reversed, and therefore fishy. If he's worried the "other side of the bet" doesn't have the money, then that person must be a buyer, and the IB client must be a seller. Then why is IB blocking buys instead of sales then?

And he could make buys on IB safe by just requiring settled funds to purchase, instead of banning buys completely.
I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client. At which point his firm is effectively short the shares of a stock that’s going to Pluto.

Edit: then imagine the bankruptcy. Investor A: I have 100 shares of VTI that I’d held for 10 years and it was worth $200/share so I should get $20,000 out of the corpse of IB. Investor B: I had 10 shares of GME at $8k/share that I’d held for 10 minutes so I should get $80,000! Underlying assets are: 100 shares of VTI. Split 20/80, the VTI investor gets $4k and the GME investor gets $16k. After legal fees, that is.
When I listened to the interview his solvency concerns seemed to be around options -- which I I think there is some legitimacy to. I believe OCC (or whatever the options clearinghouse is called now) offers some guarantee - but I don't know now deep the pockets are behind that.

But I am completely unclear in the scenario what risk there is to purchasing shares? As long as we are not talking about buying shares from a naked short (which we aren't) then there should be no financial liability associated with allowing the purchase of shares?

Now if IB has lended out a massive amount of shares and is worried about additional purchases driving up the price to the point that the people they loaned the shares to default, thus leaving IB liable - then the risk makes sense. But the response - we restrict trading that itself doesn't have appreciable risk in order to manipulate the price lower - doesn't seem reasonable, equitable, or legal (though IANAL, so caveat).
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dmcmahon
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Re: Interactive Brokers (Best Kept Secret)

Post by dmcmahon »

mike999 wrote: Fri Jan 29, 2021 1:33 am
dmcmahon wrote: Fri Jan 29, 2021 12:57 am I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client. At which point his firm is effectively short the shares of a stock that’s going to Pluto.
IBKR has already a 100% margin requirement for buying those stocks. It should be rather simple for the clearing house at that point. They get from one party the 100% covered order. The question at that point is only if the selling party delivers the stock. If yes the trade is done, if no the buyer gets his money back. If it doesn't pass the clearing house the buyer doesn't get the stocks. Why would the broker owe anything to the client if the clearing house hasn't validated the trade yet? Isn't this why there are clearing houses in the first place?
IB was adequately funding, according to Peterffy. But on CNBC Steve Weiss said RobinHood was underfunded to support their clearing requirements.
talzara
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Re: Interactive Brokers (Best Kept Secret)

Post by talzara »

the way wrote: Fri Jan 29, 2021 12:54 am I also think his answer was reversed, and therefore fishy. If he's worried the "other side of the bet" doesn't have the money, then that person must be a buyer, and the IB client must be a seller.
The other side could also be a short-seller. For example, Interactive Brokers requires 300% margin to hold short positions in some of these stocks. However, they have no assurance that the other brokers are also requiring 300% margin.

The other side has the 100% from the short sale, but it may not have the other 200%. If the short cannot locate a borrow, and the stock triples before settlement, then there will be a failure to deliver.
the way wrote: Fri Jan 29, 2021 12:54 am Then why is IB blocking buys instead of sales then?

And he could make buys on IB safe by just requiring settled funds to purchase, instead of banning buys completely.
IB is blocking both purchases and sales. The stocks are liquidate-only at Interactive Brokers. You cannot buy to open or sell to open. However, you can buy to close or sell to close.

Requiring 100% settled funds to purchase does not protect against a failure to deliver. IB has no assurance that the other brokers have the same requirement.
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Steve Reading
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Re: Interactive Brokers (Best Kept Secret)

Post by Steve Reading »

Maybe it’s an unpopular opinion and maybe it’s wrong to think it, but IBKR is my broker and I really like them. If they’re choosing to limit clients from doing X twitch a stock that moves 40% in a matter of minutes (and they’re legally allowed to, which they are), then I support them 100%.

Perhaps if I really understood the ramifications of the volatility of these meme stocks, I might be more open to these theories that IBKR actually has no risk and is preventing purchases to manipulate the price to help the short hedge funds.
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
talzara
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Re: Interactive Brokers (Best Kept Secret)

Post by talzara »

rchmx1 wrote: Fri Jan 29, 2021 1:17 am "Luckily enough, we have 9 billion dollars of equity, so we don't have a problem." ~ Thomas Peterffy

So what is the problem? If, as the man says himself, they don't have a problem "if [their] customers are not able to pay for their losses and so they have to put up [IB's] own money," because they "have 9 billion dollars of equity," then what exactly is their justification for removing GME from new purchases?
He doesn't have a problem now, but he could have a problem in the future.

He has no problem with GME at $300 a share. Does he have a problem at $3,000 a share? $30,000? In a short squeeze, the sky is the limit.
rchmx1 wrote: Fri Jan 29, 2021 1:17 am Also, and you might be more knowledgeable here then me, but when you say, "I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client," is that really how things work? If I place an order for a very illiquid asset, and there is no seller, then my buy order just sits there not completing, surely. Just the fact that my broker has sent my order to the clearing house doesn't mean that anyone is on the hook for anything, if there is no seller on the other end of the transaction. Right?
This has nothing to do with liquidity. There is plenty of liquidity on these stocks.

The trades are executing. There is a buyer and a seller. However, there is no guarantee that the seller will deliver the shares. If there is a failure to deliver, then IB could be making up the difference.
SlowMovingInvestor
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Re: Interactive Brokers (Best Kept Secret)

Post by SlowMovingInvestor »

Steve Reading wrote: Fri Jan 29, 2021 1:44 pm Maybe it’s an unpopular opinion and maybe it’s wrong to think it, but IBKR is my broker and I really like them. If they’re choosing to limit clients from doing X twitch a stock that moves 40% in a matter of minutes (and they’re legally allowed to, which they are), then I support them 100%.

Perhaps if I really understood the ramifications of the volatility of these meme stocks, I might be more open to these theories that IBKR actually has no risk and is preventing purchases to manipulate the price to help the short hedge funds.
IBKR is one my brokers -- I mostly use them because I wanted to see how easy/hard it was play with their API (it's a little clumsy, FWIW, but quite functional) and because they offer so many capabilities to retail investors. I still like them. But I prefer Fido for it's far better customer service.

I don't have any real problem with their restrictions, and given what a maverick their CEO (Peterffy) is, I find it hard to believe they were trying to help hedge fund.
the way
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Re: Interactive Brokers (Best Kept Secret)

Post by the way »

talzara wrote: Fri Jan 29, 2021 1:24 pm
the way wrote: Fri Jan 29, 2021 12:54 am I also think his answer was reversed, and therefore fishy. If he's worried the "other side of the bet" doesn't have the money, then that person must be a buyer, and the IB client must be a seller.
The other side could also be a short-seller. For example, Interactive Brokers requires 300% margin to hold short positions in some of these stocks. However, they have no assurance that the other brokers are also requiring 300% margin.

The other side has the 100% from the short sale, but it may not have the other 200%. If the short cannot locate a borrow, and the stock triples before settlement, then there will be a failure to deliver.
Your explanation kind of makes it sound even more like their real goal is to protect the short-sellers from bankruptcy-inducing margin calls, which is the basis of this entire "movement", ie that the "establishment" and Wall St are colluding to help the big players at the expense of the retail investor.

Here's an interview with a different brokerage CEO trying to explain why they shut down those stocks. Basically he says he was told by the Clearing houses to do it. https://finance.yahoo.com/video/heres-w ... 49721.html

ANTHONY DENIER: "Well, it wasn't our choice. Our clearing firm gave us a call and said we're going to have to stop allowing new opening positions in the three names, AMC, GME, and KOSS" because "they simply can't afford the cost of that trade clearance."

Also, TD announced restrictions which are a lot more reasonable and basically what I was saying (require settled funds, no uncovered option writing, etc). You have to wonder why they don't have to worry about the "other side" not making good if what you say is right. https://www.tdameritrade.com/td-ameritr ... tocks.page

"The following restrictions are in place:
  • Stocks - 100% holding requirement (not marginable)
  • Long calls and puts are allowed, with the exception of options expiring today (1/29)
  • Covered call and short put orders may only be placed with a broker. Please be aware that wait times to speak with a broker may be longer than normal due to current market conditions.
  • Covered calls only allowed if your account currently has the shares
  • Short puts only if you have the maintenance/cash to cover the entire exercise amount of the short puts
  • All other complex options orders will not be accepted"

Finally, Citron just announced a "pivot" away from short-selling research. https://www.reuters.com/article/us-reta ... SKBN29Y1XR
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Re: Interactive Brokers (Best Kept Secret)

Post by talzara »

mike999 wrote: Fri Jan 29, 2021 1:33 am
dmcmahon wrote: Fri Jan 29, 2021 12:57 am I suspect if he puts the client’s trade to the clearing house, he may not get the shares and yet has to make them good to the client. At which point his firm is effectively short the shares of a stock that’s going to Pluto.
IBKR has already a 100% margin requirement for buying those stocks. It should be rather simple for the clearing house at that point. They get from one party the 100% covered order. The question at that point is only if the selling party delivers the stock. If yes the trade is done, if no the buyer gets his money back. If it doesn't pass the clearing house the buyer doesn't get the stocks. Why would the broker owe anything to the client if the clearing house hasn't validated the trade yet?
The IB customer agreement states that trades are "subject to rules and policies of relevant markets and clearinghouses." If the clearinghouse fails, then it is subject only to the rules of the markets. The trade has already executed, so IB is required to deliver the shares into the customer's account.

Even if there is no legal obligation to buy replacement shares, IB still has a reputation to protect. IB has put trading restrictions on hundreds of stocks in the past, but it has never failed to deliver shares. Restricting trading upholds IB's reputation for strong risk management.
mike999 wrote: Fri Jan 29, 2021 1:33 am Isn't this why there are clearing houses in the first place?
No. Clearinghouses exist to simplify the settlement process.

Clearinghouses were originally created to clear checks. Instead of 1000 banks clearing checks with 999 other banks, there are 1000 banks clearing checks with one centralized clearinghouse.

The same thing happened for paper stock certificates. Now the stocks are electronic, but it still works the same way. A stock may be traded multiple times each day. This could cause a chain of delays, as broker A is waiting for shares from broker B, which can't deliver because it's waiting for the shares from broker C. If you clear simultaneously at the end of the day at a central clearinghouse, then it solves the chain problem.
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Re: Interactive Brokers (Best Kept Secret)

Post by talzara »

the way wrote: Fri Jan 29, 2021 2:47 pm
talzara wrote: Fri Jan 29, 2021 1:24 pm The other side could also be a short-seller. For example, Interactive Brokers requires 300% margin to hold short positions in some of these stocks. However, they have no assurance that the other brokers are also requiring 300% margin.

The other side has the 100% from the short sale, but it may not have the other 200%. If the short cannot locate a borrow, and the stock triples before settlement, then there will be a failure to deliver.
Your explanation kind of makes it sound even more like their real goal is to protect the short-sellers from bankruptcy-inducing margin calls, which is the basis of this entire "movement", ie that the "establishment" and Wall St are colluding to help the big players at the expense of the retail investor.

Here's an interview with a different brokerage CEO trying to explain why they shut down those stocks. Basically he says he was told by the Clearing houses to do it. https://finance.yahoo.com/video/heres-w ... 49721.html

ANTHONY DENIER: "Well, it wasn't our choice. Our clearing firm gave us a call and said we're going to have to stop allowing new opening positions in the three names, AMC, GME, and KOSS" because "they simply can't afford the cost of that trade clearance."
Increasing the margin on short positions to 300% causes more margin calls on short-sellers, not less. IB can only control its own margin policies. It cannot control what other brokers do.

Anthony Denier did not say that the clearinghouses told him to restrict trading. A clearing firm is not a clearinghouse.

Also, Interactive Brokers is self-clearing. It does not use a clearing firm.
the way wrote: Fri Jan 29, 2021 2:47 pm Also, TD announced restrictions which are a lot more reasonable and basically what I was saying (require settled funds, no uncovered option writing, etc). You have to wonder why they don't have to worry about the "other side" not making good if what you say is right. https://www.tdameritrade.com/td-ameritr ... tocks.page
Interactive Brokers has always had stricter risk-management controls than TD Ameritrade.
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Re: Interactive Brokers (Best Kept Secret)

Post by audioengr »

Coincidentally to the thread, but not to the current topic of discussion...

MMM just posted about using IBKR's margin to purchase a home.
https://www.mrmoneymustache.com/2021/01 ... kr-review/
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Re: Interactive Brokers (Best Kept Secret)

Post by Steve Reading »

talzara wrote: Fri Jan 29, 2021 3:21 pm
Thank you for the information, very helpful. Let me see if I follow the concern from IBKR:
- Clients of IBKR buy more shares of GME. A seller is matched. If that seller had the shares, that's not an issue. But that seller might be a short-seller. So when it comes time to clear, the broker from the short-seller might not be able to locate shares to sell. This would be mitigated if that broker had stricter margin requirements to short-sell like IBKR but since IBKR cannot assume that, then there's a risk to fail-to-deliver. At that point, IBKR has to buy the shares themselves. That could be OK at the current price given IBKR's equity but if GME rose to $30,000 in those few days, then not so much.

Hence, IBKR does not let you buy any more GME shares. They still let you buy them back to close (if you were previously short) since obviously you want to let people do that.

Now, why did IBKR block "sell to open" (short-selling)? What's the concern here exactly?
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
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Re: Interactive Brokers (Best Kept Secret

Post by ChrisBenn »

talzara wrote: Fri Jan 29, 2021 1:24 pm
the way wrote: Fri Jan 29, 2021 12:54 am I also think his answer was reversed, and therefore fishy. If he's worried the "other side of the bet" doesn't have the money, then that person must be a buyer, and the IB client must be a seller.
The other side could also be a short-seller. For example, Interactive Brokers requires 300% margin to hold short positions in some of these stocks. However, they have no assurance that the other brokers are also requiring 300% margin.

The other side has the 100% from the short sale, but it may not have the other 200%. If the short cannot locate a borrow, and the stock triples before settlement, then there will be a failure to deliver.
the way wrote: Fri Jan 29, 2021 12:54 am Then why is IB blocking buys instead of sales then?

And he could make buys on IB safe by just requiring settled funds to purchase, instead of banning buys completely.
IB is blocking both purchases and sales. The stocks are liquidate-only at Interactive Brokers. You cannot buy to open or sell to open. However, you can buy to close or sell to close.

Requiring 100% settled funds to purchase does not protect against a failure to deliver. IB has no assurance that the other brokers have the same requirement.
Isn't this only a risk if the other side is selling naked shorts (selling a stock without having located the actual share)? Only market makers are allowed to do this - if they "in good faith" believe they can locate the share in 6 days. Are market makers that rampantly generating FTD's that buys have to be halted on these securities because these market makers might become insolvent?

The TD restrictions seem much more inline with protecting customers and the broker from counterparty risk.
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Re: Interactive Brokers (Best Kept Secret)

Post by talzara »

Steve Reading wrote: Fri Jan 29, 2021 4:13 pm Now, why did IBKR block "sell to open" (short-selling)? What's the concern here exactly?
IB may not be able to borrow shares for customers who want to go short.

Since IB is preventing purchases to open, its long customers can only maintain or reduce their positions. If an IB customer wants to open a short, IB may not be able to borrow shares from its own customers. It would then have to borrow from another broker, which may fail to deliver the shares.

Also, 300% margin may not be enough to protect IB against customers who are opening short positions now.

300% margin is enough for IB's customers with existing positions, because they shorted GME at $20 or $50 or $100. IB already liquidated anyone who failed to post 300% margin. They're bankrupt and no longer IB customers.

300% margin is not enough for an IB customer who wants to open a short position now. GME jumped from 126 to 308 in 50 minutes on January 28, 2021. That isn't 300% yet, but that's too close for comfort. Next time, it could go to 500%, and it could take 5 minutes or even 5 seconds. In a short squeeze, there is no limit to how high a stock could go.
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Re: Interactive Brokers (Best Kept Secret)

Post by Steve Reading »

talzara wrote: Fri Jan 29, 2021 5:10 pm
Steve Reading wrote: Fri Jan 29, 2021 4:13 pm Now, why did IBKR block "sell to open" (short-selling)? What's the concern here exactly?
IB may not be able to borrow shares for customers who want to go short.

Since IB is preventing purchases to open, its long customers can only maintain or reduce their positions. If an IB customer wants to open a short, IB may not be able to borrow shares from its own customers. It would then have to borrow from another broker, which may fail to deliver the shares.
Oh I see. I thought IB would locate the shares to short before it would even let you short. In that case, if you want to short, it would just bounce with an message "could not locate shares, sorry" instead of downright preventing you. But it sounds like IB lets you enter a short (in general, say with AAPL) before knowing exactly which share it would borrow. And then it takes the time to find them. Which yes, I see the risk there.
talzara wrote: Fri Jan 29, 2021 5:10 pm Also, 300% margin may not be enough to protect IB against customers who are opening short positions now.

300% margin is enough for IB's customers with existing positions, because they shorted GME at $20 or $50 or $100. IB already liquidated anyone who failed to post 300% margin. They're bankrupt and no longer IB customers.

300% margin is not enough for an IB customer who wants to open a short position now. GME jumped from 126 to 308 in 50 minutes on January 28, 2021. That isn't 300% yet, but that's too close for comfort. Next time, it could go to 500%, and it could take 5 minutes or even 5 seconds. In a short squeeze, there is no limit to how high a stock could go.
Wait a minute. I don't get how 300% is enough for IB customer's with existing shorts but not for anyone looking to enter a short. I'm sure a bunch of people have been liquidated but then they don't have an existing short any more.

Is this IB just saying "OK 300% is about right for whatever customers are short now, but we cannot tolerate any additional shorting, otherwise we'd need to further raise the margin requirement"?
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
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Re: Interactive Brokers (Best Kept Secret

Post by talzara »

ChrisBenn wrote: Fri Jan 29, 2021 4:14 pm Isn't this only a risk if the other side is selling naked shorts (selling a stock without having located the actual share)? Only market makers are allowed to do this - if they "in good faith" believe they can locate the share in 6 days. Are market makers that rampantly generating FTD's that buys have to be halted on these securities because these market makers might become insolvent?
Covered short-selling only requires you to locate the shares before selling. You do not have to borrow the shares. You only have to borrow the shares in time to deliver them for settlement.

There are many ways to get a failure to deliver. The lending brokerage can change its mind. The lending customer can sell the shares. The lending customer can move the shares to a cash account, where they become ineligible for lending. Usually, the shorting brokerage can buy shares if it cannot borrow them. In a short squeeze, there is no limit on price, and the shorting brokerage could go bankrupt.

As for the options market makers, you don't know if they can deliver until they actually deliver the shares.

You're thinking about a normal market. Peterffy is thinking about the long tail. He can't trust anyone anymore -- not the market makers, not the other brokers, not the clearinghouses. Any risk is too much.
ChrisBenn wrote: Fri Jan 29, 2021 4:14 pm The TD restrictions seem much more inline with protecting customers and the broker from counterparty risk.
The TD restrictions only protect the brokerage from its own customers. They do not protect TD from counterparties.
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Re: Interactive Brokers (Best Kept Secret)

Post by talzara »

Steve Reading wrote: Fri Jan 29, 2021 5:23 pm Oh I see. I thought IB would locate the shares to short before it would even let you short. In that case, if you want to short, it would just bounce with an message "could not locate shares, sorry" instead of downright preventing you. But it sounds like IB lets you enter a short (in general, say with AAPL) before knowing exactly which share it would borrow. And then it takes the time to find them. Which yes, I see the risk there.
They do locate the shares to short before allowing the trade. They just don't know if the shares will get delivered.

Here's what IB does when a customer opens a short sale:
  1. Locate the shares.
  2. Execute the trade.
  3. Borrow shares from the lending brokerage.
  4. Deliver the shares to the buying brokerage on settlement date.
Normally, all of this works. Today, IB has no guarantee that it can do step #3.

When you're worried about counterparty risk, you can't take anything for granted. Things that normally work out may not work out.
Steve Reading wrote: Fri Jan 29, 2021 5:23 pm Wait a minute. I don't get how 300% is enough for IB customer's with existing shorts but not for anyone looking to enter a short. I'm sure a bunch of people have been liquidated but then they don't have an existing short any more.

Is this IB just saying "OK 300% is about right for whatever customers are short now, but we cannot tolerate any additional shorting, otherwise we'd need to further raise the margin requirement"?
Probably. It's easier to stay the course when your customers are covering their shorts than if they're going deeper into the short.
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Re: Interactive Brokers (Best Kept Secret

Post by ChrisBenn »

talzara wrote: Fri Jan 29, 2021 5:26 pm
ChrisBenn wrote: Fri Jan 29, 2021 4:14 pm Isn't this only a risk if the other side is selling naked shorts (selling a stock without having located the actual share)? Only market makers are allowed to do this - if they "in good faith" believe they can locate the share in 6 days. Are market makers that rampantly generating FTD's that buys have to be halted on these securities because these market makers might become insolvent?
Covered short-selling only requires you to locate the shares before selling. You do not have to borrow the shares. You only have to borrow the shares in time to deliver them for settlement.

There are many ways to get a failure to deliver. The lending brokerage can change its mind. The lending customer can sell the shares. The lending customer can move the shares to a cash account, where they become ineligible for lending. Usually, the shorting brokerage can buy shares if it cannot borrow them. In a short squeeze, there is no limit on price, and the shorting brokerage could go bankrupt.

(...)
For the case of a person buying shares (not selling short):
In all of those scenarios if the shares were not delivered then the cash would be returned also though? If a trade fails to execute due to a counterparty reneging prior to settlement IB would just put the cash back in ones account - not be on the hook to scour other markets for the share? That is the whole purpose of the settlement window?

If I'm wrong here on this assumption than I see your point - but then need to re-understand the settlement process I guess.


IB is still loaning out GME to short -- https://iborrowdesk.com/report/GME. -- if they can't trust a stock straight purchased to be delivered why can they trust shorted stocks to be returned?
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Re: Interactive Brokers (Best Kept Secret)

Post by Steve Reading »

talzara wrote: Fri Jan 29, 2021 5:56 pm
Steve Reading wrote: Fri Jan 29, 2021 5:23 pm Oh I see. I thought IB would locate the shares to short before it would even let you short. In that case, if you want to short, it would just bounce with an message "could not locate shares, sorry" instead of downright preventing you. But it sounds like IB lets you enter a short (in general, say with AAPL) before knowing exactly which share it would borrow. And then it takes the time to find them. Which yes, I see the risk there.
They do locate the shares to short before allowing the trade. They just don't know if the shares will get delivered.

Here's what IB does when a customer opens a short sale:
  1. Locate the shares.
  2. Execute the trade.
  3. Borrow shares from the lending brokerage.
  4. Deliver the shares to the buying brokerage on settlement date.
Normally, all of this works. Today, IB has no guarantee that it can do step #3.

When you're worried about counterparty risk, you can't take anything for granted. Things that normally work out may not work out.
Steve Reading wrote: Fri Jan 29, 2021 5:23 pm Wait a minute. I don't get how 300% is enough for IB customer's with existing shorts but not for anyone looking to enter a short. I'm sure a bunch of people have been liquidated but then they don't have an existing short any more.

Is this IB just saying "OK 300% is about right for whatever customers are short now, but we cannot tolerate any additional shorting, otherwise we'd need to further raise the margin requirement"?
Probably. It's easier to stay the course when your customers are covering their shorts than if they're going deeper into the short.
Makes a lot of sense. One more Q. If an IBKR client buys stock, which ultimately came from a short sale, leading to a failure-to-deliver, which broker is on the hook for it? If the stock rose in value (which means it must be purchased for more than IBKR's client paid for), who takes that loss?
"... so high a present discounted value of wealth, it is only prudent for him to put more into common stocks compared to his present tangible wealth, borrowing if necessary" - Paul Samuelson
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Re: Interactive Brokers (Best Kept Secret

Post by InvestorDave »

ChrisBenn wrote: Fri Jan 29, 2021 6:25 pm
IB is still loaning out GME to short -- https://iborrowdesk.com/report/GME. -- if they can't trust a stock straight purchased to be delivered why can they trust shorted stocks to be returned?
Anyone else find it pretty interesting that the data on iBorrowDesk hasn’t been updated since the 27th? That’s 2 full trading days with no insight into the available shares to short.
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Re: Interactive Brokers (Best Kept Secret)

Post by mike999 »

dmcmahon wrote: Fri Jan 29, 2021 1:16 pm IB was adequately funding, according to Peterffy. But on CNBC Steve Weiss said RobinHood was underfunded to support their clearing requirements.
If IB didn't have issues it makes things somewhat worse not? Blocking users from participating in the market and possible gains. Sounds quite unprofessional for a broker claiming to be directed at professionals.
talzara wrote: Fri Jan 29, 2021 2:52 pm No. Clearinghouses exist to simplify the settlement process.
You are saying clearing houses aren't there to reduce/remove the risk for the two parties but are only there to simplify the trade?
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Re: Interactive Brokers (Best Kept Secret)

Post by dmcmahon »

Steve Reading wrote: Fri Jan 29, 2021 7:43 pm
talzara wrote: Fri Jan 29, 2021 5:56 pm
Steve Reading wrote: Fri Jan 29, 2021 5:23 pm Oh I see. I thought IB would locate the shares to short before it would even let you short. In that case, if you want to short, it would just bounce with an message "could not locate shares, sorry" instead of downright preventing you. But it sounds like IB lets you enter a short (in general, say with AAPL) before knowing exactly which share it would borrow. And then it takes the time to find them. Which yes, I see the risk there.
They do locate the shares to short before allowing the trade. They just don't know if the shares will get delivered.

Here's what IB does when a customer opens a short sale:
  1. Locate the shares.
  2. Execute the trade.
  3. Borrow shares from the lending brokerage.
  4. Deliver the shares to the buying brokerage on settlement date.
Normally, all of this works. Today, IB has no guarantee that it can do step #3.

When you're worried about counterparty risk, you can't take anything for granted. Things that normally work out may not work out.
Steve Reading wrote: Fri Jan 29, 2021 5:23 pm Wait a minute. I don't get how 300% is enough for IB customer's with existing shorts but not for anyone looking to enter a short. I'm sure a bunch of people have been liquidated but then they don't have an existing short any more.

Is this IB just saying "OK 300% is about right for whatever customers are short now, but we cannot tolerate any additional shorting, otherwise we'd need to further raise the margin requirement"?
Probably. It's easier to stay the course when your customers are covering their shorts than if they're going deeper into the short.
Makes a lot of sense. One more Q. If an IBKR client buys stock, which ultimately came from a short sale, leading to a failure-to-deliver, which broker is on the hook for it? If the stock rose in value (which means it must be purchased for more than IBKR's client paid for), who takes that loss?
Inquiring minds want to know. That’s murky as heck. I’m sure there’s a 10 foot high stack of regulations that make the answer crystal clear - to those in the know. The rest of us get to worry about counterparty risk and broker solvency.
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Re: Interactive Brokers (Best Kept Secret)

Post by B00st »

First recomendation: Turn off CNBC.

Interactive Brokers (as well as many other small brokers) didn't have the capital to support the trades in these stocks due to DTCC raising the collateral rates from the normal 1-3% to 100%. Given that GME was $300+ per share and had massive trading volume, they could not afford to send 100% to DTCC and have it sit for two days while the funds settled. They allowed people to sell, because selling doesn't require capital.

The big boys (Fidelity,Vanguard,Schwab) didn't have these restrictions because they are much better capitalized or didn't have many people trading the stocks in question.

Cheers

:sharebeer
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Re: Interactive Brokers (Best Kept Secret)

Post by saver007 »

B00st wrote: Fri Jan 29, 2021 8:32 pm First recomendation: Turn off CNBC.

Interactive Brokers (as well as many other small brokers) didn't have the capital to support the trades in these stocks due to DTCC raising the collateral rates from the normal 1-3% to 100%. Given that GME was $300+ per share and had massive trading volume, they could not afford to send 100% to DTCC and have it sit for two days while the funds settled. They allowed people to sell, because selling doesn't require capital.

The big boys (Fidelity,Vanguard,Schwab) didn't have these restrictions because they are much better capitalized or didn't have many people trading the stocks in question.

Cheers

:sharebeer
You will be surprised to know Interactive brokers has more excess regulatory capital than the big boys you referenced like Fidelity, Vanguard, Schwab in their brokerage entities. Schwab has more capital on its banking entity bcs of the higher risk it take as a bank Google the broker name and "statement of financial condition" There is a section tiled net capital requirements that will provide a summary of the firm's capital requirements.

What Peterffy was afraid of essentially already happened with Robinhood. It appears they were forced to come up with a billion dollars overnight to post as collateral and/or to increase their regulatory capital to remain solvent. Luckily RH was able to raise 1 billion (probably in very unfavorable terms) this time but would they be able to raise more money if this mania continue and required to post higher collateral and increase capital requirements? I wonder.
Last edited by saver007 on Fri Jan 29, 2021 10:04 pm, edited 1 time in total.
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Re: Interactive Brokers (Best Kept Secret

Post by whodidntante »

InvestorDave wrote: Fri Jan 29, 2021 7:47 pm
ChrisBenn wrote: Fri Jan 29, 2021 6:25 pm
IB is still loaning out GME to short -- https://iborrowdesk.com/report/GME. -- if they can't trust a stock straight purchased to be delivered why can they trust shorted stocks to be returned?
Anyone else find it pretty interesting that the data on iBorrowDesk hasn’t been updated since the 27th? That’s 2 full trading days with no insight into the available shares to short.
Use the FTP site. iBorrowDesk is not an IB tool.
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Re: Interactive Brokers (Best Kept Secret)

Post by dmcmahon »

saver007 wrote: Fri Jan 29, 2021 9:50 pm What Peterffy was afraid of essentially already happened with Robinhood. It appears they were forced to come up with a billion dollars overnight to post as collateral and/or to increase their regulatory capital to remain solvent. Luckily RH was able to raise 1 billion (probably in very unfavorable terms) this time but would they be able to raise more money if this mania continue and required to post higher collateral and increase capital requirements? I wonder.
Yep, saw that fly by the previous day, on CNBC of course! They didn’t make a big deal of it but for me it was a red alert flashing Danger Will Robinson!. A sign of systemic stress. The trading restrictions from IB & TD the following day were not really surprising. I’m guessing Schwab & Fido just have fewer punters playing the troublesome listings.
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Re: Interactive Brokers (Best Kept Secret)

Post by rchmx1 »

Really great information in here, I really appreciate the opportunity to learn some things. So, is the interpretation of events basically that the shorts took such an over-extended position that for all intents and purposes they were able to ensure that their losses would be capped due to the extreme stress a full on short squeeze would cause to the markets as a whole? Could this possibly have been a part of their risk management assessment when entering into their positions in the first place? I have to say, the thought of this kind of makes me sick to my stomach. :?
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