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Any broker will have some down time... but if they have chronic
problems (1 hr per month, per your example) they would not have very
many customers ... and you would hear about it quickly. Bad news
spreads fast.
A second broker is not the ideal hedge, but could certaily be useful.
I would not count on transfering asset to balance accounts, though...
too complicated...too slow... Really need to have enough assets
to "survive" both position till things are normalized, then close
both ... It should only be for short periods.
Ara
--- In amibroker@xxxx, "Owen Davies" <owen5819@xxxx> wrote:
> Among other comments, akaloustian wrote:
>
>
> > the second broker can not undo trades from your first broker...
>
> Actually, IB says that they can transfer the entering trade
> to the secondary broker, so that the whole transaction appears
> on the backup company's accounts. It takes a while, but in the
> end the IB account winds up unaffected, and any gain or loss
> appears in the other account. However, it does mean that you
> need enough money in the secondary account to cover anything
> you do with IB.
>
> Somehow, this does not really sound like enough protection
> to me. What happens if, say, you are long in a losing trade
> with IB and sell through the secondary account, and then the
> market turns around and heads up again before the secondary
> broker gets the entry from IB. My guess for a worst-case
> scenario is that you get a margin call you can't cover, and the
> secondary broker closes you out at a horrendous loss. Eventually,
> they get the entry from IB, but it takes forever to get things
straight
> so that you dare to trade again.
>
> Now what if one of the brokers screws up the transaction,
> so that the entry gets "lost in the mail?"
>
> You see why I'm wondering how often backup is needed.
> IB's speed of execution, low commissions, and half-size
> margin for day trades (in that order) really appeal to me,
> but I'm wondering whether the theoretical risks are anything
> I would care to face in reality. If the system "never"
> goes down for more than a minute, maybe. If it dies for
> an hour every month, forget it!
>
> Owen Davies
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