IB Advisor Account: allocation to individual accounts

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fbertram
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Joined: 16 Oct 2014
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IB Advisor Account: allocation to individual accounts

Postby fbertram » 13 Jul 2017

I am looking to trade a strategy for multiple clients in an IB advisor account. However, I am confused about the methods IB offers to allocate shares to the individual (client) accounts. Here are the situations I see as problematic:

Scenario A: onboarding a new client
* account #1: existing client, $100,000.00 total, all invested in stocks
* account #2: new client, $100.000.00 total, all cash
* trade: $100,000.00 in the same stocks as account #1, all to be allocated to account #2
* issue: it seems that this is calling for IB's 'AvailableEquity' method of allocation? However, this would conflict with scenario B

Scenario B: daily re-balancing
* account #1: $100,000.00 total, 100 shares XYZ, $0 cash
* account #2: $99,999.99 total, 99 shares XYZ, $999.99 cash
* trade: sell 199 shares
* issue: this seems to be calling for IB's 'NetLiq' method of allocation. However, I am concerned that there are situations in which the required rounding will lead to incorrect results?

What's the best way to make sure that all accounts are as close as possible to a desired distribution, based on the net liquidation value of the accounts?


Thank you,
best regards, Felix

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TJ
Posts: 7151
Joined: 29 Aug 2006
Location: Global Citizen

Re: IB Advisor Account: allocation to individual accounts

Postby TJ » 13 Jul 2017

I am looking to trade a strategy for multiple clients in an IB advisor account. However, I am confused about the methods IB offers to allocate shares to the individual (client) accounts. Here are the situations I see as problematic:

Scenario A: onboarding a new client
* account #1: existing client, $100,000.00 total, all invested in stocks
* account #2: new client, $100.000.00 total, all cash
* trade: $100,000.00 in the same stocks as account #1, all to be allocated to account #2
* issue: it seems that this is calling for IB's 'AvailableEquity' method of allocation? However, this would conflict with scenario B

Scenario B: daily re-balancing
* account #1: $100,000.00 total, 100 shares XYZ, $0 cash
* account #2: $99,999.99 total, 99 shares XYZ, $999.99 cash
* trade: sell 199 shares
* issue: this seems to be calling for IB's 'NetLiq' method of allocation. However, I am concerned that there are situations in which the required rounding will lead to incorrect results?

What's the best way to make sure that all accounts are as close as possible to a desired distribution, based on the net liquidation value of the accounts?


Thank you,
best regards, Felix

You might want to try your question at a trading forum.

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fbertram
Posts: 166
Joined: 16 Oct 2014
Location: Seattle, USA
Contact:

Re: IB Advisor Account: allocation to individual accounts

Postby fbertram » 14 Jul 2017

I have posted a feature request to IB's Feature Poll. If you are facing similar problems as I do, please vote for it:
https://www.interactivebrokers.com/en/?f=2493&sid=12643


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