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

[Longnose]

I only use IB for non-US stocks. 

 

I use TD ameritrade for everything else. Great platform. Think or Swim is great if you are really into the technical indicators (I'm not, but I pull them up every now and them). I dont use margin so I dont know how their rates compare to other platforms. 

 

I also have a robinhood account as my gambling account. I think RH's interface is the most user-friendly of any platform. It is crazy easy and all the no fee stuff is great. There is not quality research to be dont on RH so I do that all offline. I just dont trust RH with the majority of my money with all the publicity around their major fails and flaws. 

 

Someday I hope other brokers can catch up with how simple and effective the RH interface is. 

 

[Castanza]

16 minutes ago, Gregmal said:

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. 

 

Was looking for a better mobile experience and everyone and their brother was saying IBRK is the best  figured I'd give it a shot.

[Mephistopheles]

I use ibkr for the margin rates. Otherwise it’s god awful

[Spekulatius]

My experience with the Etrade is dated but their mobile and PC apps were solid, when I used them. I use mostly IBKR nowadays.I I think their mobile apps are solid and robust, but their GUI isn’t exactly user friendly. The biggest weakness is reporting, imo.

[fareastwarriors]

16 hours ago, Mephistopheles said:

I use ibkr for the margin rates. Otherwise it’s god awful

 

Same. Can't beat those margin rates. 

 

But I heard you can negotiate your rates at other places.

Maybe people with some coin like Greg can do that.

[Munger_Disciple]

I use Interactive Brokers & Schwab. Overall I prefer Schwab. The back-office support at Interactive Brokers is virtually non-existent. If have questions or you believe there are errors on an Interactive 1099, good luck getting any one to help you especially during tax time. The only advantage of of Interactive is foreign stock and forex trading IMO. You can pretty much negotiate the same/better margin rates at Schwab assuming your account is of significant size. And back office support at Schwab is outstanding. 

Edited June 21, 2021 by Munger_Disciple

[Mephistopheles]

That's an interesting point about negotiating margin rates. Another reason I use IBKR is because it allows me to do bull call spreads in my Roth IRA. Merrill Edge doesn't, which is so stupid because it's the same thing as a covered call. 

 

I'll ask Schwab about margin and spreads. Are there any other brokers that are willing to negotiate? Merrill is not. TD has some of the worst margin rates but I hear they have a great platform, has anyone been able to negotiate with them?

 

Also the other supposed benefit about IBKR is the quality of their execution. Is it truly better than the others? I haven't noticed any difference between it and Merrill Edge, but I'm by no means a day trader or fast trader. Does execution quality between these brokers even matter for infrequent traders?

Edited June 22, 2021 by Mephistopheles

[Spekulatius]

In terms of quality of execution, I think Fidelity is on par or better than IBKR (based on the price improvements I am getting).

[gfp]

I disagree on Fidelity's execution.  The accounts I manage at Fidelity consistently display an inaccurate and higher bid/ask spread on stocks like Atlas Corp vs IB which shows the actual current best bid/ask.  A marketable limit order (buy at actual exchange ask) entered on Fidelity will sit there unexecuted because they do not route orders to the exchange.  They route orders to a pay-for-order-flow outfit like Citadel (I forget but I think it is Citadel Securities).  It can be frustrating to get a fill but I have learned to bid more at Fidelity and consider it part of their new "free" commissions.  I only manage 3 accounts there so maybe there is a better service level for others.  I have no personal accounts with them.

[mbreject]

On 6/21/2021 at 10:01 AM, Munger_Disciple said:

You can pretty much negotiate the same/better margin rates at Schwab assuming your account is of significant size. And back office support at Schwab is outstanding. 

 

Do you have to renew your discount with Schwab every year? They basically matched IBKR for me, but they were only willing to guarantee the rate for a year. 

 

On 6/21/2021 at 7:50 PM, Mephistopheles said:

Merrill Edge doesn't, which is so stupid because it's the same thing as a covered call. 

 

Merrill will negotiate if you do at least 100k. It's 2-3x IBKR's rates, but better than nothing. They don't consider IBKR a competitor so you need to show a statement or offer from another brokerage. 

 

[Spekulatius]

22 hours ago, gfp said:

I disagree on Fidelity's execution.  The accounts I manage at Fidelity consistently display an inaccurate and higher bid/ask spread on stocks like Atlas Corp vs IB which shows the actual current best bid/ask.  A marketable limit order (buy at actual exchange ask) entered on Fidelity will sit there unexecuted because they do not route orders to the exchange.  They route orders to a pay-for-order-flow outfit like Citadel (I forget but I think it is Citadel Securities).  It can be frustrating to get a fill but I have learned to bid more at Fidelity and consider it part of their new "free" commissions.  I only manage 3 accounts there so maybe there is a better service level for others.  I have no personal accounts with them.

Interesting enough, I have the opposite experience with as regards to OTC stocks with IB. Fidelity shows the correct Bid/ask even for stocks you can’t buy any more (dark stocks). With IB, I have gotten executions outside the bid/ ask spread shown both above and below.

 

My casual observation regarding Fidelity and IB execution is when I sold relatively low priced and lower volume stocks on both my IB and Fidelity Accounts at the same time. Then Fidelity seems to score well, and with the price improvement, the average price I got is above my limit with sells, vs at limit for IB.

 

I think Fidelity is one of the few brokers that don’t get paid for order flow, also that payment for order flow isn’t a totally black and white statement either:

https://www.spglobal.com/marketintelligence/en/news-insights/trending/IiJL9zOpAk76f_BrDunluA2

 

[Mephistopheles]

4 hours ago, mbreject said:

Merrill will negotiate if you do at least 100k. It's 2-3x IBKR's rates, but better than nothing. They don't consider IBKR a competitor so you need to show a statement or offer from another brokerage. 

 

 

I haven't asked them about rates, but if they only negotiate down to 2-3x IBKR then I'd rather not do margin with them. My bigger problem with them was not allowing stuff like bull call spreads in IRA accounts, for which they were unwilling to budge at least for me. 

[mbreject]

I think Fidelity and Schwab allow spreads in IRAs.

[Munger_Disciple]

6 hours ago, mbreject said:

 

Do you have to renew your discount with Schwab every year? They basically matched IBKR for me, but they were only willing to guarantee the rate for a year. 

 

Schwab automatically renews the agreement every year for me. They send me a letter once a year reiterating the margin rates that were agreed to.

[mbreject]

Just now, Munger_Disciple said:

 

Schwab automatically renews the agreement every year for me. They send me a letter once a year reiterating the margin rates that were agreed to.

 

Damn. Now I feel stupid for moving my account lol

 

Thanks for the info!

[Munger_Disciple]

4 hours ago, mbreject said:

 

Damn. Now I feel stupid for moving my account lol

 

Thanks for the info!

 

Just FYI, Schwab's one year agreement is better than IBKR's. IBKR can and does change margin rate basis calculations overnight whereas Schwab actually guarantees the margin rate calculation for one year (for example R = Fed Funds Rate + Agreed Upon Spread) 

[mbreject]

Ugh. Yeah. When I first moved over to IB, it was cheaper and now the rates are the same. 

[Castanza]

How is Schwab’s mobile app? 

[Munger_Disciple]

1 hour ago, Castanza said:

How is Schwab’s mobile app? 

 

Don't know, never used it. 

[fareastwarriors]

Not gonna make a difference in the long run but still minorly annoyed by it!

 

For Schwab:

Edited November 27, 2021 by fareastwarriors

[changegonnacome]

On 6/23/2021 at 4:33 PM, Munger_Disciple said:

 

Just FYI, Schwab's one year agreement is better than IBKR's. IBKR can and does change margin rate basis calculations overnight whereas Schwab actually guarantees the margin rate calculation for one year (for example R = Fed Funds Rate + Agreed Upon Spread) 

 

Thanks great info - is there much 'hustling' with them required to get their best rate (as long as your assets are in the say $500k+ category)?

[yesman182]

I moved my investments to Merrill last year because they allow you to use your margin for investments outside of your account. I wanted to have margin available for buying a house I planned to flip. After I signed up for the margin account I learned that if you use the money outside the account it is actually DEMAND Financing that can be called at anytime with no warning. I have not used this margin, because giving them the right to call your financing at any time for any reason too risky for me.

 

Does anyone who uses margin for purchasing homes know if IBKR/Schwab  considers the margin loan a Demand loan? I want to avoid a margin/loan call at all costs, I plan to only margin ~10% of my investments.

[muscleman]

2 hours ago, yesman182 said:

I moved my investments to Merrill last year because they allow you to use your margin for investments outside of your account. I wanted to have margin available for buying a house I planned to flip. After I signed up for the margin account I learned that if you use the money outside the account it is actually DEMAND Financing that can be called at anytime with no warning. I have not used this margin, because giving them the right to call your financing at any time for any reason too risky for me.

 

Does anyone who uses margin for purchasing homes know if IBKR/Schwab  considers the margin loan a Demand loan? I want to avoid a margin/loan call at all costs, I plan to only margin ~10% of my investments.

 

i don't think it is a good idea to use margin in IBKR because they have instant liquidation rule. It only gives you a few minutes for the margin call before they liquidate your positions. There is no way anyone could deposit enough money within minutes of margin call. You have to either use margin and buy options to protect your risks, or don't use margin.

 

I think if you want to buy and flip houses, the best way to do that is to use HELOCs. I have a HELOC with my local credit union that's free to open and the APR is 3.99%, and there is no annual fee for it.

 

[Munger_Disciple]

On 11/27/2021 at 6:07 PM, changegonnacome said:

 

Thanks great info - is there much 'hustling' with them required to get their best rate (as long as your assets are in the say $500k+ category)?

 

The rate is privately negotiated between Schwab & customer. The spread depends on the amount of assets you have at Schwab; the spread over the fed funds rate is guaranteed for 1 year and usually renewed automatically.

Edited November 29, 2021 by Munger_Disciple

[ValueArb]

Now you can buy crypto on IB, and TWS will remind you of it twice a day if you have it open.