I have been with IB for a long time too, and I am not planning to leave them at all.
As said previously, they are a BROKER, and as such they perform extremely well in my opinion.
It is worth noting that they are very strict and severe on margin calls, they don't grant you any grace period to refund your account or liquidate your positions yourself to meet the call. This is something to take very good note of if you use margin a lot.
On the other hand, and to answer your direct question, they manage their brokerage and market making businesses in separate companies, which are both registered with local securities and/or commodities regulators.
Of course that won't prevent them from cheating, but let me nonetheless quote from their website the following:
Successful people will do what unsuccessful people won't or can't do!
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Their executions are excellent. Their data is good if you don't require tick data - it all depends what you need and how you trade.
The upside of ib is that they focus on low cost and excellent execution with a data feed suited for some but not all; hence they have a huge customer base amongst experienced traders and even seem to be the biggest fx business (a chart I saw put them ahead of Oanda, Fxcm etc). The downside is that they are not in the customer service for newbies business - if you are new to the game and might want some hand holding you should probably go somewhere else. Also, if you want tick data or sub minute data is important to you (they send a data packet 10 times a second only) then you'll also want a different data feed.
Thank you! I am investing stocks only in a cash account, and trade futures. I think IB's advantage is obvious for my strategy.
If I have all my cash in the underlying commodity account, and one day I decide to buy some stocks, can I immediately buy, or I need to transfer money to the securities account first, wait for a few days to clear, and then trade?
I am not going to do intraday trading so tick data is not that important to me.
The futures data is all from CME and other future centralized exchanges, right? That should be good to prevent stop loss gunning. I heard a lot of Forex brokers do not actually put your orders into the open market, but instead just gamble against you, and shot your stop loss orders. Every forex broker's data feed shows a slightly different quote.
No need to wait. You can trade with your money however you want regardless of the account it is in, as long as it is not tied up in margin on another trade.
Also a happy IB customer that swing trades futures and tinkers with options when I have gambling fever. From what you described, it sounds as if IB would be fine for your purposes.
My only experience with customer service was on a trade related matter several years back, and it was handled quickly and correctly. I believe it was closing a position when I had a major computer failure. But I would agree that IB expects you to know what you are doing. Customer service won't hold your hand, but they do have good documentation and a bunch of webinars and educational stuff like that...however I don't know the quality of said educational material.
Anyways, I have not come across any reason that swing traders should not choose IB during my 6 years with them. You can even yield enhance and let the stock you buy get borrowed.
Once upon a time the maximum packet frequency for IB was 4 per second (actually it might have been 5).
Then, when they were upgrading their servers they increased it to 10 per second (100ms).
Of course if nothing happens no packet is received.
It's worth noting that some of the broker vendors that people believe send every tick don't always do that. From time to time some of them ease their load - I say this only because I've seen surprised complaints on the Sierra Chart board.
Edit: Answering BM's question.
True data is called 5 second data by IB. In answer to the problem that their live data doesn't necessarily catch all prices (its one price per 100ms) they created a new data feed that supplies the true OHLCV for the 5 second period at the end of each 5 second period.
With Sierra Chart the TD feed can be used to correct any errors in the live feed. That way you get prices instantaneously (well, within 100ms) but they are corrected for any missing ticks as each 5 second true data packet arrives. IB seem to do the same with their charting.
I have seen mention of a product suffix "-TD" aka "True Data". Can anyone clarify what this is? I was hopeful it meant they sent unfiltered data, but am quite certain that is not what it means
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I have used IB for the last year and a half. I have watched prices side by side with bloomberg prices, and have not seen any naked eye discrepancies. I have also been happy with the execution, barring the liquidity-fee collecting snipers on the other side.
My wife worked in the accounting office for IB. She was very impressed with Thomas Peterffy and how he handled the issues that arose in the normal course of business.
I have been underwhelmed with the help desk, but have always found an answer to what I was looking into.