Talk:Interactive Brokers

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You have new messages (last change).

The recent edits are very negative.

1) When I opened my IB account, I wasn't charged a dime in service fees for the first month, even though I opened around the 20th of October. Even if they did charge you a minimum $10 commission for the month, is it really that big of a deal? What is AMTD going to charge you, $10 a trade, $20 a roundtrip?

2) Strict and conservative margin policy? Are they really worse than any other brokers? Or are you complaining that some special reduced margin requirement isn't being applied to certain combinations of options trades such as calender spreads, condors, etc? Once again, I think you need to keep things in perspective here.

3) Basically every broker has tier discounts and bonuses for margin lending and credit balances, so its not very unusual (despite your claim). What's AMTD's best margin rate, LIBOR + 200bp or worse? IB charges LIBOR + 150bp at the most on any money borrowed (with a few exceptions, for instance, if you borrow pesos), and it gets cheaper from here.

4) I didn't find anything about IB's calculations or online instructions confusing. IB is a stock/futures broker, not a savings bank. If you want a savings account, I am sure your local bank would be glad to set one up for you.

5) Hidden fees? No, IB discloses everything. Its all there, right infront of you. And if you do more than a couple trades a month, the savings with IB are dramatic.

Might I add, on EliteTrader, IB is pretty much the top-rated broker, and complaints are extremely few and far between. I don't see the point in wasting an entire page of wiki dealing with complaints that Interactive Brokers is not as competitive interest-wise as a high-interest savings account like HSBC or EmigrantDirect.

64.110.251.69 02:48, 19 July 2006 (UTC)

Ummm, also, that Thestreet.com review is from 2001, over 5 years ago, and is mostly obsolete (TWS has improved dramatically since then, L2 quotes are available, commissions have fallen substantially, and there are significant charting capabilities built right in now.). I think the link should be deleted because of its obsolescence.

64.110.251.69 03:30, 19 July 2006 (UTC)

  • Agreed! I misread this was written in 06. Link is deleted. If you find any new and comprehensive reviews, please list it under the external link. Thanks! --Wai Wai 18:36, 19 July 2006 (UTC)

In response to 64.110.251.69

  1. Just state the fact.
  2. It is neutral. Some may find strict/conservative margin policy good, some not.
  3. Do other brokers calculate interests on pro-rata basis? This statement is taken from people who comment on this issue (NOT my claim). As far as I know, interests are normally charged on flat-rate basis. Eg:
    • For $10,000, it is 0%
    • For $15,000, it is 5% (but NOT $10,000 is always 0%; $5,000 is 5%)
    1. Let's look into a bit further to see whether it is a usual practice. Could you name some firms (with references, at least 4 to 5) which also charge interests on pro-rata basis?
  4. Yes you are right. I have no problem understanding it. That is why the statement says some (NOT all), with references. I have included the arguments made by IB staff too. Thus people can hear 2 sides of views and judge accordingly.
  5. Same as above

They are all here for people to interpret. It is open to you to judge based on the facts (eg the interest loss is real. It is there, but do you think it is unacceptable?). Nevertheless you may feel the main page is negative because quite a few paragraphs go on explaining the whole "interest loss" issue, It is required since the issue is a bit complicated and this policy has led to combo effects. However merit points have also been mentioned, including margin lending rates (competitive in the industry) and short selling interests (few would offer), and so on.

Finally the main page is not intended to be a comprehensive review as Wikipedia is not to comment on a firm. It will not just say "how good a firm is" neither, since it is not to advertise a firm. However links are given to third party reviews. For people who wish to look further, they should go for these reviews.
--Wai Wai 18:36, 19 July 2006 (UTC)

a) Well constantly harping on the fact that interest isn't paid below threshold amounts really is a distraction. For instance, I can't find any evidence that TD Ameritrade pays any credit on cash credit balances on their website. So is IB really different/worse in this respect? At least they give you something (albeit only on amounts greater than the threshold).

b) If you want to accentuate the positives of IB, just look at TD Ameritrade's fee list. http://www.tdameritrade.com/ratesfees.html :

  1. Annual Trade Summary -- $10
  2. Corporation Action Deposit -- $25
  3. Mandatory Reorg (ie: Reverse Split) -- $20
  4. Wires (Outgoing) -- $20/$30 (IB gives one free a month)
  5. Forced Margin Sellout -- $25

None of the above fees even exist with IB.

c) The interest rate section is broken. Debit interest is 'charged' (and is BM + 150bp), while Credit interest is 'credited' (at BM - 50bp, no credit under the threshold). Most people who use IB will be borrowing, not maintaining large credit balances, as IB is a broker, not a savings bank.

d) "Losses"? With the competition, you would be getting nothing. I think it goes without saying that IB is not your grandma's savings account. 64.110.251.69 22:55, 19 July 2006 (UTC)

[edit] Biased article

Just a quick read and this article reads as very very biased. phrases like It is not a firm for hand-holding., since Interactive Brokers applies a few "tricks", so to speak, and is in general not written in a neutral tone - Peripitus (Talk) 13:30, 20 July 2006 (UTC)

I agree Peripitus, look at the previous version I wrote a few revisions ago, and consider just reverting the article to that version. As an IB user, I do agree with the admonishment that "IB is not a firm for hand holding", but everything seems to be written so negatively, especially the above-referenced issues. - [User:64.110.251.69|64.110.251.69]] 19:06, 20 July 2006 (UTC)

Dear Peripitus,

I think some IB fans just read things in a negative mind. "It is not a firm for hand-holding" is just a neutral fact. Why don't you mention "Margin lending rates are one of the most competitive in the industry" is biased or problematic too? Any proof or cmparison made? If you take a netural view to read the article, you will see this article is not as negative as you may think of. You shouldn't just focus on the negatives, while ignoring others!

Nevertheless you may feel the main page is negative because quite a few paragraphs go on explaining the whole "interest thing". It is required since the issue is a bit complicated and this policy has led to combo effects. However merit points have also been mentioned, including margin lending rates (competitive in the industry) and short selling interests (few would offer), and so on. Simply don't get a wrong impression due to the size.

I agree the word "tricks" here may not be appropriate, but I'm out of vocabulary. That's why I quote it, implying the meaing should not be taken negatively.

I'm not an English speaker, so what word will you suggest in this case? What words or phrases would you use to describe about a situation when people first read the interest rates, it looks attractive apparently. But if you further investigate, there are actually "something" one may forget which undermine the attractiveness of the interest rate?

Dear 64.110.251.69,

Unless the whole paragraph is completely non-sense or factually wrong, one should NEVER just revert to the previous version simply because the article has flaws or you don't wish to see any negatives if you are in favour of the issue, or vice versa. It is actually rude to revert. Before "revert", one should think carefully, or discuss the issue first.

The "interet thing" mentioned in the paragraph is real. It's there. It HAS been discussed on the forum. You may think it is not a big deal, but not a big deal doesn't deny that this is not a fact.

I'm open to any suggestion. Just discuss more, so we can improve the article.

Dear 58.152.136.73,

Edit Summary: the comments were biased and w/o comparing the rates to other firms grossly misleading

The article simply states there is "interest losses". It says nothing about the interest rate is acceptable or not. Why a comparison is necessary? Sure, if you can provide a comparison with the real (NOT advertised) interest rates, it would be nice! What's more, all are taken or proved from the sources. Editors who are serious should read the sources before reaching a conclusion.

I think IB users are just too sensitive to negatives, They even read some statements like "strict and conservative marign policy" and "not a hand-holding firm" as negatives.

While they are too lenient on positives. Based on the above deletion logic of 58.152.136.73, it is more urgent to delete the paragraphs regarding margin lending rates (competitive in the industry) and short selling interests (few would offer). They even have NO sources to prove the above statements. It appears to be double standards!

Finally, to clarify, I don't hate IB or in no way against IB. I am here to write articles and state the facts.
--Wai Wai 06:23, 21 July 2006 (UTC)

You keep referring to the amounts below the thresholds for payment of interest as 'losses'. I personally wouldn't characterize them as losses, because they are neither being deducted from your account, nor do other brokers actually have policies that are fundamentally different from IB under similar conditions (ie: small amounts of short selling, keeping relatively small amounts of cash on deposit, etc.). To me, concentrating on a few issues of very well-documented IB policy concerning the crediting of interest, to the extent you have, is simply a veiled attempt of airing gripes at IB for some perceived injustice. Wikipedia isn't a really the proper forum for evaluating the credibility, or more specifically, the applicability of all claims made in advertising. If it were, then almost every wiki would be filled with pages of "your company lied, the product didn't make me sexy", or "Coca Cola rotted my teeth and caused cavities", etc. 64.110.251.69 21:19, 21 July 2006 (UTC)

About 1/3 of this article now focuses on the interest rate trivia. I completely agree with the anonymous poster a bit above who said, "Most people who use IB will be borrowing, not maintaining large credit balances, as IB is a broker, not a savings bank." None of the people I know trading there care even slightly about IB's interest policies. I view this as a situation where a very vocal minority is making an overblown fuss about something that's really not important at all to the vast majority of customers, and as such this should be touched on as briefly as possible. The sample calculation outline they provide at http://www.interactivebrokers.com/en/accounts/fees/interestMethods.php?ib_entity=llc shows the Tier information clearly; the only part that I agree could be confusing is the currency/sub-account stuff. The "Total Actual Losses Explained" and "Formula of interest lossess calculation" sections should both be completely removed, and only the most important/non-obvious points of "Are people well-notified of every cost behind the policy?" merged into the "Adverse Effects..." section. The removal of the awful abuse of English in those sections will be a welcome side-effect. P.S. Messages on the IB message boards expire after a while; I learned the hard way that content there goes away but never nailed down the exact time period. Linking to there to support a position will eventually result in a broken link. --GregorySmith 10:33, 22 July 2006 (UTC)

Hey, the comments here are very different from the forum which discusses this issue. There are people who did complain a lot about the interest rates. Take TradeStation as an example, people are calling this company as "theives" owing to its incredibly low interest rates. The criticisms are harsh. I don't agree it is "very vocal minority", as you claim. Perhaps you could list sources to see if nearly all traders don't care about interest rates.

Wai Wai Reading your report on what has proven to be a very fair firm comes across as a negative and biased review. You don't compare the interest rates with other competitors who are offering substantially less interest. If you are going to harp on interest rates, you should be fair and discuss the many free services and benefits that the firm offers. The margin rates they offer are SO MUCH better than the other firms and the higher interest rates are net positive if you hold more than 30-50K with them. If you want to be a journalist, try being fair. taitam, 22 July 2006

If you could provide a comparison of real interest rates and margin rates, it would be great.
One should treat "interest losses" part as facts (real interest rates are lower than advertised interest rates, with explanations). It's only negatives if you care, nothing if you don't care. The larger size is due to its complexity, not its seriousness. Actually this part and the rest of the article is not intended to be a complete review.
I have checked some other articles like Coca Cola. There is even a separate section (with the whole sub-article) just to mention the criticisms of its products, so I don't think one must maintain the same size of negatives and positives, as long as they are facts. By the way, point-wise, the article actually contains more good than bad points.
I will try to write more if I have time. --Wai Wai 15:35, 23 July 2006 (UTC)

I was suggesting that Interactive Brokers customers as a whole are satisfied with the company's interest policies, with only a small number really complaining about this issue. If you read through the first referenced forum are, I only see two people who have serious issues with their system--the ones I named the vocal minority--compared to at least twice that many just in that thread who insist that the IB interest rates are fair or industry leading despite the restrictions (I'm obviously ignoring the comments from IB staff in those counts). Two people complaining, no matter how loud, is not a lot. The fact that other companies (like TradeStation) give truly awful rates that people really have reason to complain about is a separate issue from whether the typical IB customer is satisfied with their interest policies. I'd like to check into the second forum thread, "What is exactly the monthly cost for", but it's already gone--as I also suggested, references to their forums are not good references.

IB customers come in three forms:

  • (1) Don't care about interest because account is too small or trades are dominated by margin interest rather than credit interest.
  • (2) Care about interest but feel IB is competetive with the industry
  • (3) Care about interest but feel IB is being unfair (probably because of its tier, subaccount, and currency splits)

I've read hundreds of IB forum posts over the last two years since I opened an account there. This recent spat is the first time I've seen this issue even mentioned, suggesting categories (1) and (2) are the majority here. So far I've only counted a handful of people in (3). Yet expressing their viewpoint is by far the largest section of this article. That's wrong. The inclusion of a point in time snapshot section like "Total Actual Losses Explained" is ridiculous for a Wikipedia article. Finally, calling unearned interest "losses" is clearly not a neutral viewpoint. I've had months with losses in my brokerage account, and I would never confuse that with money I might have earned but didn't. --GregorySmith 03:24, 24 July 2006 (UTC)

Dear GregorySmith,
Thanks for your comments. I'll improve the article soon. Probably in a week or so when I get some more time. I am helping to write/maintain many articles here, so I am very busy.

One point worth mentioning is it is not that serious in the past as the interest rate was low at that time, so one should try to read recent posts to see how poeple feel about this issue recently.

Your observation sounds good and comprehensive. It would be great if you could provide references to your observation. This could make it more complete. Thanks!

The second point may be argueable since most people forget to take the effect of "interest thing" into consideration, or underestimate its effect. That is why this article is here to clear things up. It is different from one to another. 3 factors affecting the real interest rates you receive: cash, sub-accounts, currencies. It could be worse than some other firms or even TradeStation in some cases. However don't get me wrong. As I said, the real interest rates vary case by case.

Yes, I agree it shouldn't be the majority. But I'm not sure if it is "the very vocal minority". From what I read in IB forums, EliteTrader and Yahoo Groups, it is surely not. No matter what, the article just states some people are complaining, NEVER say the majority.

What should I do regarding the references in IB forums?

Could anyone provide some sources or proofs about regarding margin lending rates (competitive in the industry) and short selling interests (few would offer)
--Wai Wai 09:47, 24 July 2006 (UTC)

Sure Wai Wai, visit AMTD's or Scottrade's, or any of the other online brokers' pages and look at their rates.

IB offers a rate Fed Funds + 150bp (6.75%) or less on every dollar borrowed. TD Ameritrade = 11%, Scottrade = 10.5%, Tradestation = 8.125%, Etrade = 10.24%. Visit their websites -- for anyone who does any amount of margin borrowing, the savings with IB are going to be substantial. Only tradestation is close to being competitive, but even then, they are still substantially more expensive than IB. --64.110.251.69 07:11, 26 July 2006 (UTC)

Thanks for your help. None except Tradestation is direct-access. No active trader will choose something like Scottrade anyway even if it offers ultimate 5.25%. The comparison is thus useless. If memory serves, rates of direct brokers can compete with IB. With consideration of other directly-related factors, it is not easy to know which one is the best in terms of real interest rates.--Wai Wai (talk) 15:41, 1 August 2006 (UTC)

[edit] Neutral for others, biased for IB loyalists

LOL! The edits here are very negative, not to say one-sided.
Lo and behold! Commentators are boldly selective and keep complaining the bad points, but no one ever try to complain the good points, for example, no one mention to delete the statement margin lending rates are one of the most competitive in the industry. Where's the comparison? This is also grossly misleading according to their standards.

Things like not for hand-holding, strict and conservative margin policy have never been discussed by them. I don't see anyone complain about competitive margin rates, or high-level platforms. According to the commentators' standards, they should all be removed.

What is bias? Bias happen when someone make false statements or untruth to attack or protect the subject. See the comments made by 64.110.251.69. I really suspect his identity. (1) - (5) are amusing. You should know his purpose. What's wrong to mention facts stating that fees are applied to the whole month? Every broker has tier discounts and bonuses... Tell me, which firm will charge interests pro-rata? top-rated broker, and complaints are extremely few and far between... top-rated? extremely few? Do you have proof? How neutral are you?

People should learn more about losses. IT IS LOSSES. Court will take interest losses into account. Have you ever heard of opportunity costs? One says not written in neutral tone? Then what should we call? Interest gains? Well-documented? No hidden fee? Are you working at IB? Any firm will explain their fee somewhere, but this does not mean it is not a hidden fee. A hidden fee is they hide it in somewhere so people will not notice or misunderstand it. If IB is plainly innocent, why not state this clearly under the interest table, for example, it is charged pro-rata. Interest will never be paid in the lower tier?

Where can I find resources which explains how much interests I could lose per year? None. No such resources. It tells us exactly what real interest rates we are receiving. This is also great to reveal its dirty marketing gimmicks. I don't care much about interest, but it is the policy I find it disgusting. It is very dishonest. It is to take advantage of people ignorance or misunderstanding. I doubt anyone here know all the story of the policy. Well done, Wai Wai!

After all, readers should see through these commentators. They merely don't want to hear anything which may sound negative. They try to hide every fact which is true but hurt the firm's profit. IB staff!? Who knows?

Conclusion: The whole section should NEVER BE DELETED. There is no bias. Facts are not biases.

Finally I have to say I am in no way in favor of either party. I judge with my 2 eyes open. I merely comment on the facts. --Lee On

Agree! I find the "interest" section "interesting although I do not use IB. It should be kept intact. Thanks to the article, I have learned something new, e.g. I should look for related costs and don't just take it directly. Unfortunately the whole section is missing today. I find out there's a vandal who delete a handsome number of texts. It is inappropriate to delete people's contributions, so I restore it-- walkers09:00, 30 July 2006 (UTC)

Is this an article on the company or a review? If supposedly unbiased info, words like "gimick" shouldn't be used. There is no gimick in the rates since the policy is well documented on the web site. It should also be fair and mention the benefits Interactive Brokers offers free software, higher interest rates for larger balances, and doesn't charge for a host of other services (option exercise, first wire of the month, etc). If you are going to leave up the interest rate table, you should at least add 3rd and 4th columns with rates other brokers charge and at what point are you ahead with IB's higher rates. In short, there is a cost for lower balances but above 30-40K you usually will end up ahead. They obviously are targeting the active WELL FINANCED trader. The article should discuss the history of the firm (which is very interesting) and facts NOT pros or cons. --Taitam 13:43, 27 July 2006 (UTC)

Agree! The word gimmick is not necessary since it is derogatory in nature, but I don't think it is well documented. The website stated the calculation method with examples. However it mentions nothing about how this affects our interests and interest rates. I realize I should not expect this from IB, but that is why there is value of this article. It focuses on the effect side which I am most interested in, rather than the calculation side. This part is not necessary as it is documented. If possible, I hope the author can provide a few examples to illustrate the interest costs or losses, and explain more on how to calculate real interest rates. As regards history, you can always read it on its website. I don't think it is interesting. -- walkers09:00, 30 July 2006 (UTC)

[edit] Biased "editorial"

The person inserting the interest calculations provide no reference to other brokers and clearly has a biased agenda in his slanderous comments about IB.

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