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When it comes to futures brokerage, it's a sound practice to make sure there's a
back door before walking in the front! Good thing you did and thanks for posting
the follow-up. After the recent problems with LeoWeb/CUBS was seriously thinking
about taking a closer look ... the margin doesn't bother me, but I wouldn't for
a moment open an account in a brokerage with no back door or an inability to
trade contracts other than the S&P.
Earl
-----Original Message-----
From: Gary Fritz <fritz@xxxxxxxx>
To: omega-list@xxxxxxxxxx <omega-list@xxxxxxxxxx>
Date: Tuesday, August 18, 1998 2:05 PM
Subject: Re: Electronic Orders Entry ...
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
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