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Re: Electronic Orders Entry ...



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A while back I posted some info about Interactive Brokers' electronic 
order entry system through Timber Hill.  It looked good, with a nice 
direct hookup into Globex (you can hit the bid/ask, etc) and very low 
commissions (as low as $3.95 per side, $9.75 minimum per order).

But it's become clear to me that IB is not the answer for me.  There 
are a couple of annoying things like 1) high margin requirements, 
$5000 per e-mini even for daytrading, and 2) they ONLY allow e-mini 
trades in the retail account!  No other contracts are supported.

And it turns out there's an even worse problem.  IB apparently gets 
their low commissions by having ZERO human involvement in the order 
process.  I started to worry about this and asked the IB rep if there 
was a voice order desk to use in case the system goes down & you need 
to exit a trade.  She apparently couldn't be bothered to answer with 
a simple "yes" or "no," but told me to go read the website.

Here is what I gleaned from their website.  I sent this message to 
the IB rep with expressions of disbelief, asking if this was really 
the way they operated.  That was last week, and she hasn't replied to 
deny it, so I assume it must be correct.  

So I definitely will not be opening an account with IB.  I still like 
the IB order tool, and I may possibly go with one of IB's licensees 
(with higher commissions but better support), but definitely not 
through IB directly.

Gary

=========

To:        Lori Oconner <loc_interactive@xxxxxxxxxxxxxx>
Subject:   Re: Look on web
From:      fritz@xxxxxxxx
Date sent: Fri, 14 Aug 1998 13:09:13 -0600

> If you look on the review section of our web page you will see this
> issue being addressed.

A simple "yes" or "no" would have sufficed very nicely.  

I dug through the website.  The closest I can see are:  

4. Interactive Brokers shall confirm all transactions electronically 
via the Internet in lieu of printed confirmations and monthly 
statements. If there are system delays or failures, confirmations may 
not be received on a timely basis. The Customer accepts electronic 
messaging through the Internet if it is the only means used to 
confirm customer Trades and receive monthly statements.  

...and...

8. In the event of a system failure, or a failure at an exchange 
which did not permit the cancellation of an order, the Customer  
remains bound to execution of its order. 

...and...

10.  ...  Since system failures and delays will be experienced, and 
in such events the IB System may not be available for the Customer, 
the Customer is responsible for making alternative trading 
arrangements if they are necessary.


...which sounds very much like "If anything goes wrong, it's the 
customer's problem, and it's up to the customer to figure out a way 
to solve it.  If the IB system goes down in the middle of a trade, 
tough bananas.  You'd better have another brokerage account somewhere 
where you can offset the order, because we won't help you.  We can't 
even be bothered to maintain a voice order entry line to allow you to 
exit positions if the IB system blows up."  


That being the case, or at least my interpretation of the rules, 
there is no way I would do business with IB.  I can't imagine why 
anyone would.

Gary