Best Thread Interactive Brokers

[YachtFund]

Hi IB

In your user guide you say you wouldn't recommend using trailing stops. Why is that?

Also are group stops 24 hours Sunday night to Friday night? I.e. when I place a stop it will be triggered at anytime between Sunday and Friday with no exception.

Thanks

YF

 

[Interactive Brokers]

Dear Yacht Fund:

To clarify, we do not recommend using trailing stops unless the client first understands all of the risks associated with using this and other stop order types during a falling market.

There is a default for regular trading hours in our system and if this is not selected, stops will be triggered whenever a market center is open regardless of liquidity.

 

[def]

I'll actually expand on the trailing stops. This is a very simple but brief explanation but it is a realistic scenario

We believe that trailing stops are a controversial issue and we are opposed to them for the following reason. Trailing stops are liquidating orders placed simultaneously with an opening order. The stop price is a set amount away from the price at which the position is entered into and it moves penny for penny with the stock price as long as the stock price moves in favor of the position. Once the stock price reverses by the amount set in the trailing stop order, the position is liquidated. It is a method of trading that, taken to its ultimate conclusion by a large number of followers, would ruin its practitioners, their carrying brokers and wreak havoc in the market with potentially dangerous repercussions for the economy. Trailing stops are akin to "portfolio insurance", generally recognized as the reason behind the large downward spiral of the crash of 87. Both strategies are based upon the illusion of a liquid market with price continuity for any size at any time. A stop order turns into a market order when activated and market orders must be executed immediately at the best available price, no matter what the price may be. When using stop orders, the price will gap to the next available quoted price or limit order and the next stop order will be executed at this price. It should be clear that when many trailing stop orders are active on the same instrument, they will potentially all generate market orders at around the same time, independent of when and at what price they were originally placed.

 

[powerage]

Funding an account?

I have gone through the setup process for an individual account, but i cannot seem to find a funding method for transfering GBP from a UK bank account (I set GBP as my base account currency). Am i being very stupid and missing something obvious?

Any info would be much appretiated

 

[Interactive Brokers]

Dear Powerage:

When a client completes thier online application our system will automatically denote the appropriate wire transfer instructions (i.e., contingent on the base currency the client selects for his/her account) to provide thier bank.

Alternatively, if you refer to the following link http://www.interactivebrokers.com/en/general/contact/sendingFunds.php?ib_entity=uk and scroll down the page to British Sterling you can find the particulars for a GBP wire transfer instruction. That is, exclusive of your unique account id and etc.

Thank you for choosing Interactive Brokers to access world markets.

 

[powerage]

I would like to ask one quick question. Look through the contact and securities search on IB, Many stocks and ETF's have minimum order sizes of 100 is this as it sounds where by, I could only buy those stocks and ETF's in lots of 100?

I ask this as I will be starting with ~10k GBP and this would obviously limit how many positions and Instruments that I could take

Is IB therefore not really suitable for a trader in my position with the amount of money I have? And if so is there a broker anyone could recommend which has the same level of market access IB has but allows for smaller min order sizes?

Or am I in a catch 22 in terms of how much money I have and how that limits the market access?

Any thoughts, all welcome

 

[def]

Order size is determined by the exchange not IB so that shouldn't be a factor. If you point to a specific symbol it would more more helpful.

 

[powerage]

Thanks for the reply def.

I am looking to use a number of ETF's and while some such has LyXOR's can be brought on the LSE and other select European exchanges with min order sizes of 1, a number such as there LyXOR CRB Commodity tracker which i would be very interested in, trades only in Paris and seem to say 100 is the min. Lots of the other ETF's such as iShares and StreetTracks eg: SLV GLD PHO XLE to name a few, seem only to trade exchanges with 100 min.

This seems very restrictive for the small investor, for example i i wanted to buy into SLV it would cost me ~14,000USD.

Thoughts?

 

[roguetrader]

Not sure what stocks you are referring too, but ETF's such as the "Holders" ie SMH (semis), HHH (internet), and OIH (oil services) to name a few only trade in multiples of 100 and is nothing to do with individual brokers.

 

[powerage]

Thanks roguetrader,

It appears to be far more than just ETF's tho and includes most shares on US exchanges for example HAL (Halliburton) seems only to trade in lot of 100 (except its listing on Swiss exchange)

I was unaware that there were such harsh restrictions on the volume of shares you needed to trade, call me naive but it seems quite a barrier to entry for the small investor. The only exchanges that seem to have a much lower limit (of 1) are the UK and certain European exchanges.

Is this just the way things are? If so i guess i will just have to pick and choose investments from exchanges that do not have large min order sizes.

 

[YachtFund]

Dear Yacht Fund:

To clarify, we do not recommend using trailing stops unless the client first understands all of the risks associated with using this and other stop order types during a falling market.

There is a default for regular trading hours in our system and if this is not selected, stops will be triggered whenever a market center is open regardless of liquidity.

Thanks for your response. Could you describe in detail the process of how stops/trailing stops work within IB and TWS, specifically for spot FX. Or point me in the direction of any existing literature that would describe it.

Many Thanks

YachtFund

 

[Interactive Brokers]

Dear Yacht Fund:

A sell trailing stop order sets the stop price at a fixed amount below the market price with an attached "trailing" amount. As the market price rises, the stop price rises by the trail amount, but if the stock price falls, the stop loss price doesn't change, and a market order is submitted when the stop price is hit. This technique is designed to allow an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. "Buy" trailing stop orders are the mirror image of sell trailing stop orders, and are used in falling markets.

Trailing stops are available for all Smart-routed stocks and options, and on all futures exchanges which currently support traditional stop orders.

In addition, IB offers auto trailing stop orders, which allow you to attach a trailing stop order to a limit order. The trailing stop will activate when the limit order is executed.

For more pariticulars on how trailing stops work, as well as how our other 30+ order types please refer to the following link http://www.interactivebrokers.com/en/trading/orderTypesMatrix.php?ib_entity=uk

 

[BlackPanther]

Account setup time

Just a quick post here, as I've only just signed up with IB: Very impressed so far.

Signed up early monday morning (about 12:30am) and e-mailed through my passport and bank statement for proof of ID.

Later on in the day I sent a wire over. By late Monday evening I could log in to my account, my wire had been received and now I'm just waiting for it to appear in my account for actually trading.

If IB are always this effecient in the future I think this could be the start of a long relationship with them

 

[Interactive Brokers]

Just a quick post here, as I've only just signed up with IB: Very impressed so far.

Signed up early monday morning (about 12:30am) and e-mailed through my passport and bank statement for proof of ID.

Later on in the day I sent a wire over. By late Monday evening I could log in to my account, my wire had been received and now I'm just waiting for it to appear in my account for actually trading.

If IB are always this effecient in the future I think this could be the start of a long relationship with them

Dear Black Panther:

Thank you for the compliment. For your reference (for all new clients):

1. Refer to the following link for the particulars to contacting our technical support http://www.interactivebrokers.com/en/general/contact/contact.php?ib_entity=uk
2. We provide online tools, webinars and workshops for interested prospects and new clients to learn more about our Trader Workstation. Refer to the following links for more details about our upcoming webinars http://www.interactivebrokers.com/en/general/education/ibSeminar.php?ib_entity=uk And our next FREE Workshop, co-hosted with the Chicago Mercantile Exchange will be held in our London office on Monday, 15th May at 18:00 to 20:00. For an invitation please send an e-mail to [email protected]

We wish you all the success with your trading.

 

[YachtFund]

Dear Yacht Fund:

A sell trailing stop order sets the stop price at a fixed amount below the market price with an attached "trailing" amount. As the market price rises, the stop price rises by the trail amount, but if the stock price falls, the stop loss price doesn't change, and a market order is submitted when the stop price is hit. This technique is designed to allow an investor to specify a limit on the maximum possible loss, without setting a limit on the maximum possible gain. "Buy" trailing stop orders are the mirror image of sell trailing stop orders, and are used in falling markets.

Trailing stops are available for all Smart-routed stocks and options, and on all futures exchanges which currently support traditional stop orders.

In addition, IB offers auto trailing stop orders, which allow you to attach a trailing stop order to a limit order. The trailing stop will activate when the limit order is executed.

For more pariticulars on how trailing stops work, as well as how our other 30+ order types please refer to the following link http://www.interactivebrokers.com/en/trading/orderTypesMatrix.php?ib_entity=uk

As an example could you explain the risks relating to your company (not the theory of trailing stops) involved in having a trailing fx stop for say 4 days that lasts over a weekend.

Many thanks

YF

 

[Interactive Brokers]

Dear Yacht Fund:

For your reference, our forex quotes/spreads come from large forex banks in the world. Interactive Brokers does not get on either side of the spread.

We support GTC order types.

Our trading hours for forex are Sunday to Friday, 17:30 - 17:00 (ET).

The carrying broker for our client accounts is Interactive Brokers LLC, a part of the Interactive Brokers Group that has been in business for over 29 years and is capitalized at $2.1 billion.

We provide account protection for our clients.

All our accounts are segregated and we are regulated.

We hope we answered your question and appeased your concerns.

 

[jhaughey]

Hello,

Will IB be offering COMEX and / or LME anytime soon? Just out of couriosity why doesn't it offer them already? KCBOT also...

thanks

 

[Interactive Brokers]

Dear Jhaughey:

We have considered to connect to all of the exchanges you suggest, although their are other considerations before we can offer them to our clients. For example, the LME is still primarily an open out cry market, to become a member we would need to purchase exchange shares that are not readly accessible, and etc. Therefore, not only for commercial/operational reasons we have decided not to connect to these exchanges. It is not to say we will not connect to these exchanges when the situation changes in the future. We will keep you posted.

 

[dcarrigan]

Dear Jhaughey:

We have considered to connect to all of the exchanges you suggest, although their are other considerations before we can offer them to our clients. For example, the LME is still primarily an open out cry market, to become a member we would need to purchase exchange shares that are not readly accessible, and etc. Therefore, not only for commercial/operational reasons we have decided not to connect to these exchanges. It is not to say we will not connect to these exchanges when the situation changes in the future. We will keep you posted.

to trade 3 lots dow mini and 2lots lse 100 both open at the same time what deposit would i need,(might need to take overnight. and what would the com be on each.

 

[Interactive Brokers]

D Carrigan:

Answers to your questions are as follows:

eCBOT, mini Dow future commission (includes brokerage, clearing, exchange and regulatory fees) per side = USD 2.13 per side

Margin rates in USD,

1219 = Intraday initial
975 = Intra day maintenance
2,438 = Overnight initial
1,915 =Ovenight maintenance

Euronext - LIFFE; FTSE 100 future commission (includes brokerage, clearing, exchange and regulatory fees) per side = GBP 1.70 per side


Margins in GBP,

1,081 = Intraday initial
865 = Intra day maintenance
2,163 = Overnight initial
1,730 =Ovenight maintenance

You can view more future margin particulars at the following link http://www.interactivebrokers.com/en/trading/marginRequirements/margin_amer.php?ib_entity=uk