reliability of interactive brokers?

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zumthor
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reliability of interactive brokers?

Postby zumthor » 24 Mar 2011

i'm considering using IB as my broker but i've heard some worrying things about them.

Number one being that they shut down intermittently during the night to perform "system maintenance" and any orders will not go through. Also that stop orders are often missed.

Yesterday while on their website, they stopped quoting forex for about 15 minutes, when i called them to ask them about this they said that the market closed between 5-5.15 new york time. Now either I know a lot less about the forex market than I thought I did, or this guy was talking out of his ass. And the fact that everybody else will quote you prices at that time suggests the latter.

It seems that their business model is to offer the tightest spreads and not to worry about much else. Please somebody tell me this is not the case.

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TJ
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Re: reliability of interactive brokers?

Postby TJ » 24 Mar 2011

zumthor wrote:i'm considering using IB as my broker but i've heard some worrying things about them.

Number one being that they shut down intermittently during the night to perform "system maintenance" and any orders will not go through. Also that stop orders are often missed.

Yesterday while on their website, they stopped quoting forex for about 15 minutes, when i called them to ask them about this they said that the market closed between 5-5.15 new york time. Now either I know a lot less about the forex market than I thought I did, or this guy was talking out of his ass. And the fact that everybody else will quote you prices at that time suggests the latter.

It seems that their business model is to offer the tightest spreads and not to worry about much else. Please somebody tell me this is not the case.


Pro:
Largest retail broker
Worldwide coverage
3 server farms located in 3 continents
Pioneer in advanced order management system
Tightest financial control of any broker I know
Public company -- ie must answer to additional regulating authorities

Con:
Quarky TWS front end (endless updates, overcomplicated booktrader, etc.)
Practically useless charting

Not the only broker in the world,
and not the best broker for everybody.
if you can find a more capable and reliable broker, go for it.
if you have any doubts, give them a pass; there are lots of brokers who want your business.

ps. all brokers reboot their computers, not everyone let you know about it.

zumthor
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Re: reliability of interactive brokers?

Postby zumthor » 24 Mar 2011

thanks for the info tj.

the charting problems don't bother me that much.

for the system i'm looking to trade, execution (ie minimal slippage) and transaction costs are absolutely critical so if there is another broker out there with spreads to match IB then i would use them, but that doesn't seem to be the case.

if my system trades while london is closed...lets say between 190000 and 040000 gmt then which server should i use to avoid this bothersome rebooting issue? asia?

do you have personal experience of IB or do you use a different broker?

Erik Pepping
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Re: reliability of interactive brokers?

Postby Erik Pepping » 25 Mar 2011

Have been with them for years. Never any problem. Use multicharts for charting :).

Super fast execution. Never had any problem with Stop orders. Offcourse Stop LIMIT orders there is no guarantee they will executed. If you want use STOP not STOP LIMIT.

For stop loss ORDERS never use STOP LIMIT, it might not hit ! This is normal and IB executes perfectly with this model.

If you want to enter a trade a specific price use STOP LIMIT, but remember , no guarantee that it will hit. This should be like that with all brokers.

JackR
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Re: reliability of interactive brokers?

Postby JackR » 25 Mar 2011

I'm an IB customer and am happy with them. They have their quirks. I primarily trade futures. I do not trade forex and have no experience in that area..

I can tell you that IB is a true forex broker. They make their money in commissions, not from trading against you. They run an ECN and have a number of banks that provide the other side of your trades. I believe that you can also have IB customers on the other side of your trades. IB shuts down their ECN between 17:00 and 17:15 ET. That's why the customer service guy told you that forex was shut down.

Look here :http://www.interactivebrokers.com/en/trading/exchanges.php?exch=ibfxpro&showcategories=FX&ib_entity=llc

They also have a "midnight" reset/shutdown that occurs around midnight ET. They stop access to the trading server and the various data servers. The reset is not simultaneous but is staggered over about a 20 minute period. Their web site will tell you the process takes longer. The various resets last from 1 to 5 minutes. IB will allow you to be connected to any server you wish. All have their own "midnight" reset. See here http://www.interactivebrokers.com/en/software/systemStatus.php?ib_entity=llc

Their data is very inexpensive and I have found it to be quite reliable over the years. I can recall three times that their servers went awry, as opposed to exchange feed problems. Their data is not a true tick-by-tick feed. It is sampled at about a 4 times per second rate. In effect, you always trade with the most current price as there is virtually no delay in getting the current bid/ask/last in a very fast market such as occurs around a Fed announcement.. Some people don't like it as you may miss higher or lower tick that may occur in that 250 millisecond period. I've been with them for about six years and have bought or sold a few times without seeing the chart hit my price a tick away.. Going back after the close and getting time and sales shows the move.

One further thing. IB is pretty unforgiving about its customers "not managing their risk." If you mess up the mistake is yours. Further, IB does NOT do margin calls. A pop-up will appear on your screen if you are about to exceed margin limits. If you fail to correct the problem by selling something within about 10 minutes, their computer will do it for you, not always in a way that we humans might think best. So if you really push your leverage, be warned.

Hope that helps.

Jack

Jack
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