I am done with Interactive Brokers! (2019 update: I am back to IB)

[capitalg]

I use IBKR, Hilltop, Fidelity, RBC, and Axos.

 

Gregmal - can you expand on Hilltop / RBC / Axos...I'm curious how you're using these institutions as I don't see those discussed often.  I'm also not sure if you are able to open accounts directly with those firms, or whether you need something like an "introducing broker" - I can't say I'm familiar with that process other than I've heard the term (not sure if I'm using it 100% correctly here).  Are there specific instances in which you use each of these?  Are these cost effective options for an individual investor?  (I understand it probably depends on the type of trading, but curious to hear any further thoughts you can share)

[Gregmal]

I use IBKR, Hilltop, Fidelity, RBC, and Axos.

 

Gregmal - can you expand on Hilltop / RBC / Axos...I'm curious how you're using these institutions as I don't see those discussed often.  I'm also not sure if you are able to open accounts directly with those firms, or whether you need something like an "introducing broker" - I can't say I'm familiar with that process other than I've heard the term (not sure if I'm using it 100% correctly here).  Are there specific instances in which you use each of these?  Are these cost effective options for an individual investor?  (I understand it probably depends on the type of trading, but curious to hear any further thoughts you can share)

 

Theres a couple ways to go. For those you would either need a direct clearing arrangement, or an introducing broker. It is indeed largely dependent upon your needs. The biggest advantage is that if one gives you a hard time or presents problems, you have backups. But Ive found it helpful because each can provide their own benefits. Pricing is typically negotiated. You're probably paying anywhere from $5-$45 per trade. Margin rates are in between what you'd pay at IB and what you'd pay at a Fidelity. The main differences and areas of use Ive found relates to things like what types of accounts you have, if you manage money for others- where the individual with the account resides, the types of securities you can buy/sell and/or transfer in, and purchasing ability, ie, some of these firms you can buy up to, lets say, $500k in stock without a penny in available funds, and you'll have 5 business days to fund it- good for unexpected opportunities.

 

Axos for instance, you can own anything under the sun and margin pretty much anything under the sun. Although regulators have been giving them some issues lately.

 

Hilltop is friendly to foreign investors and Canadian investors, whereas many firms, including ironically enough, RBC, will not touch non-retirement Canadian accounts because of jurisdictional burdens with the provinces.

 

RBC Ive found is generally good enough at everything but the best at nothing.

 

If you are someone who heavily invests in specific types of arcane securities or securities the regulators would flag, ie low volume, OTC, micro cap, there is probably a big advantage to using these types of firms and paying the extra few bucks. If you are just buying Apple and Google, its not as necessary and you're probably better off with traditional names.

[Jurgis]

Rich investor problems, pffft.  :P

 

If only they were. I cannot sell or buy ASFI anymore even though I just hold 100 shares worth $1000 .. Admittedly I had a larger position in the past but even then I wasn’t close to owning 1% which would be 65k shares - a position worth a few hundred k and three weeks of trading volume ..

 

A bunch of CoBF people have previously tried to persuade me that IB is the best thing since the sliced bread.

 

Now I'm gonna gloat and say "I told you so".  8)

 

No, I'm gonna say: "Sorry you guys are having these issues".  :'(

[fareastwarriors]

Rich investor problems, pffft.  :P

 

If only they were. I cannot sell or buy ASFI anymore even though I just hold 100 shares worth $1000 .. Admittedly I had a larger position in the past but even then I wasn’t close to owning 1% which would be 65k shares - a position worth a few hundred k and three weeks of trading volume ..

 

A bunch of CoBF people have previously tried to persuade me that IB is the best thing since the sliced bread.

 

Now I'm gonna gloat and say "I told you so".  8)

 

No, I'm gonna say: "Sorry you guys are having these issues".  :'(

 

The margin rates are too good to move away from.

 

I only know how to buy and sell equities. I haven't even explored 99.9% of the tools being offered.

 

[Spekulatius]

Rich investor problems, pffft.  :P

 

If only they were. I cannot sell or buy ASFI anymore even though I just hold 100 shares worth $1000 .. Admittedly I had a larger position in the past but even then I wasn’t close to owning 1% which would be 65k shares - a position worth a few hundred k and three weeks of trading volume ..

 

Margin rates can be negotiated. Just threaten to leave for lower margin rates at IB and see how your broker respond. They may not exactly match IB‘s rate but probably close enough.

 

A bunch of CoBF people have previously tried to persuade me that IB is the best thing since the sliced bread.

 

Now I'm gonna gloat and say "I told you so".  8)

 

No, I'm gonna say: "Sorry you guys are having these issues".  :'(

 

The margin rates are too good to move away from.

 

I only know how to buy and sell equities. I haven't even explored 99.9% of the tools being offered.

[bizaro86]

Interesting. I also got a call from IB compliance, but not about 1% of a firm. My business earns most of its revenue in USD but my living expenses are in CAD. So I take my draw in USD and convert it via forex in IBKR, which is by far the cheapest way for me to do so. I got a call asking me a bunch of questions, and saying to never do that again. We aren't talking huge $ figures either, only ~$100k/year. I'll just do Norberts Gambit at a different brokerage, but it'll probably cost me an extra $200/year.

[Gregmal]

Interesting. I also got a call from IB compliance, but not about 1% of a firm. My business earns most of its revenue in USD but my living expenses are in CAD. So I take my draw in USD and convert it via forex in IBKR, which is by far the cheapest way for me to do so. I got a call asking me a bunch of questions, and saying to never do that again. We aren't talking huge $ figures either, only ~$100k/year. I'll just do Norberts Gambit at a different brokerage, but it'll probably cost me an extra $200/year.

 

100% AML CYA issue and will only get worse. It also may not even be specific to IBKR, although that above method of handling seems Draconian.

[boilermaker75]

Interesting. I also got a call from IB compliance, but not about 1% of a firm. My business earns most of its revenue in USD but my living expenses are in CAD. So I take my draw in USD and convert it via forex in IBKR, which is by far the cheapest way for me to do so. I got a call asking me a bunch of questions, and saying to never do that again. We aren't talking huge $ figures either, only ~$100k/year. I'll just do Norberts Gambit at a different brokerage, but it'll probably cost me an extra $200/year.

 

I had never heard of Norberts Gambit, so I had to look it up.

 

I learn something new here every day!

[muscleman]

Interesting. I also got a call from IB compliance, but not about 1% of a firm. My business earns most of its revenue in USD but my living expenses are in CAD. So I take my draw in USD and convert it via forex in IBKR, which is by far the cheapest way for me to do so. I got a call asking me a bunch of questions, and saying to never do that again. We aren't talking huge $ figures either, only ~$100k/year. I'll just do Norberts Gambit at a different brokerage, but it'll probably cost me an extra $200/year.

 

Why did they tell you never to do that again? That's weird.....

Are your living expenses mostly paid by credit card? There are lot of credit cards that offer zero fee forex convesion.

[bizaro86]

Interesting. I also got a call from IB compliance, but not about 1% of a firm. My business earns most of its revenue in USD but my living expenses are in CAD. So I take my draw in USD and convert it via forex in IBKR, which is by far the cheapest way for me to do so. I got a call asking me a bunch of questions, and saying to never do that again. We aren't talking huge $ figures either, only ~$100k/year. I'll just do Norberts Gambit at a different brokerage, but it'll probably cost me an extra $200/year.

 

Why did they tell you never to do that again? That's weird.....

Are your living expenses mostly paid by credit card? There are lot of credit cards that offer zero fee forex convesion.

 

They said they don't have a Canadian banking license. They wanted to know if I primarily had the account for forex or primarily for investing/trading. I said the second, which is absolutely true, the forex was just an incidental benefit. I am going to stop, because IBKR is considerably better than the other brokerage options available to me as a Canadian, and I got the distinct impression that I would be let go as a client if I didn't.

 

I hadn't thought of the credit card idea. I do have a USD mastercard with no foreign exchange fees. However, I checked the currency rates on the mastercard site, and even for banks with 0% fee there is a 0.5% spread.

 

By contrast, I checked IB today and their forex rates have a 0.002% spread from bid to ask (and I often get fills in between the bid and ask). Add their commission and the total cost is generally about 0.02% for the size of trades I do.

 

I've done Norbert's gambit previously, and my round trip costs at my Canadian broker tend to be $20 in commission (2 stock commissions) per conversion. Sometimes I make a few dollars and sometimes lose a few dollars on the trade itself, which seems to average out. Basically just stock movements in the few seconds it takes to exercise the second trade. I tend to do about $10000 at a time, which makes the cost 0.2%. So ~10x as much as IB, but still less than half as much as a no-fee credit card. 

 

I've probably unreasonably optimized this, as even the no-fee card version would only be ~$500/year. But IB was roughly $20/year, so it seemed worthwhile to do it.

 

 

[Pondside47]

Any of you been experiencing freeze up when you login the IB app on cellphone? I've been getting freeze up when the market is not open. It's been very frustrating.

[TwoCitiesCapital]

No freeze up for me, but definitely taking a lot longer to fill marketable orders from my experience today. Testament to liquidity conditions.

[Spekulatius]

No issues for my with IB. I use my iPhone and iPad. I do have issues with Fidelity with the website getting unresponsive sometimes.

[meiroy]

Is it just on the phone? Are your market subscriptions in order?

[Pondside47]

Is it just on the phone? Are your market subscriptions in order?

 

Yes just on the phone it seems. I don't really have a paid market subscription with IB. Is that the issue? I think I will call them since I'm the only one having trouble on this forum.

[d29]

I have the same issue on Android. It happened twice this week right after the market opened and it got solved in minutes, so no big deal.

[orthopa]

Im growing tired of my broker and have grown out of it for lack of better words. Was orginally tradeking, now Ally but their interface and platform really only useful if you want a very basic set up and their execution and options are brutal. Time to upgrade. I usually carry a little bit of margin and have a little now at Ally. Any issues you think moving an individual account to IB with prexisting margin? No penny stocks.

 

Thnaks

[Guest]

If you use margin, IB is a no-brainer.

 

The platform can take a little bit to get used to (and a long time if you really get into the weeds). If you have less than $100,000 IB isn't as great of a deal but it's better than it used to be for smaller accounts. Though I'm not sure how quickly they are to do a margin call vs competitors.

 

On the pro account, margin hits a high of 1.55% (as of right now) vs 7.75% on ally. 

[Gregmal]

Yea margin rates are the only reason I use IBKR. I have begun migrating some of my smaller cap names out though. Its a total waste of time for anything $500M market cap or under. Their margin requirements are awful for those. But if you can find $1B+ideas, its a beautiful thing.

[given2invest]

IB Margin is total shit for really anything deemed "risky" whether it's energy or biotech or sub 500m market cap. 

[NoCalledStrikes]

The only time I am happy using IB is when purchasing non-U.S. stocks where the value of access to those stocks is greater than the pain of their platform.  Otherwise, for every potentially great feature in IB like easier tendering there is an offsetting flaw like out of date online help, commissions that add up quickly on low priced stocks ($1 to buy $10,000 of a $50 stock, but $25 to buy $10,000 of a $2 stock), features that vary across platforms, and a general attitude of "we think you need us more than we need you."  Basically the only trades I do at IB are those that I can't do elsewhere.

[TrashIsCash]

Thanks for posting this.  I am a private individual and trade very infrequently.  I do buy small and micro caps though, both in the US and domestically.  I value simplicity and ease of use.  What platform do you recommend?  Thanks!

[bskptkl]

Thanks for posting this.  I am a private individual and trade very infrequently.  I do buy small and micro caps though, both in the US and domestically.  I value simplicity and ease of use.  What platform do you recommend?  Thanks!

I'd start with Schwab - free commish, otc stocks are generally fine.

Maybe IB if you trade many foreign stocks.

 

[Castanza]

Have been using IB for about 6 months now and absolutely hate it. All of the features feel "hidden" and the platform is always lags (I have GB internet). Stuff that should be blatantly obvious and in plain sight like margin exposure and maintenance seems to be "hidden" as well. Can't even get my watchlists to load half the time. And they are very clunky to update. Foreign stock exposure is nice but tbh I don't buy that many foreign stocks. 

 

Does anyone use ETrade? Or any other recommendations? Might just go back to Fidelity

[Gregmal]

Why'd you leave Fidelity? I would probably have everything there if they had better margin rates. IBKR is low quality IMO but serves a purpose. Although they've seemingly gone from being the lowest cost option to now a more expensive than peers, nickel and dime operation with abysmal customer service.