Interactive Brokers not allowing futures trading in IRAs
Interactive Brokers notified me today that they are suspending futures trading in IRA accounts today. I am wondering if this is an industry wide thing or if it is specific to IB. If any others actively trade futures in their IRA accounts, I like to know which brokers you use.
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They couldn't have screwed up this change any worse than they did. I have an advisor account that trades a mix of taxable and IRA accounts with a single order. I was in a trade overnight. When I went to exit it this morning it sold all the contracts that I was long, but since they had completely disabled futures trading in IRAs it sold the full position of all accounts and allocated them to my taxable account.
So not only had I reversed, but I was short 3x the size I had been long in the taxable account, and still long in all the IRAs.
I had to call in and close them out over the phone one by one.
How about a little notice IB, or how about at least allowing closing orders on open positions. What a mess.
Needless to say I've been shopping for a new broker this morning. If you want to trade futures and stocks in the same account TDAmeritrade/ToS is the only option I know of. If you are willing to split or only trade futures then most brokers allow IRA's.
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I had a problem with them as well. Opened TWS at market open, clicked on the DOM for a ES trade and got the message "no trading permissions". What a good way to ruin Jobs day volatility trades. Did a Cust. Serv. chat and after 15 minutes of chat the Rep told me he just found out himself. NO advance warning whatsoever. They don't seem to care how large your account is either. I am researching a new Broker as well.
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I was glad to see a thread on this topic started here on futures.io (formerly BMT)!
I have two accounts with IB - regular and IRA. I auto trade futures from MultiCharts most every trading day, and noticed all my IRA trades were getting permission denied this morning. I called IB and get almost a canned response: "Management has decided to stop allowing futures positions on IRA accounts held with IB as of midnight eastern, March 6th. We have no further information, and apologize for any inconvenience. You're welcome to continue trading equities and other cash based products"
I've now called IB twice trying to get some answers, and their customer service people are getting bombarded with angry clients wanting an explanation. The biggest issue is this came without warning, and without any notice. To be clear, IB still allows IRA accounts where your money is still safe (in theory), but you can only trade equities (long only), call options, and covered calls. Basically anything with cash positions. I told the IB CS rep, that massive moves of money out of IB were probably on the way. He chuckled a bit, and didn't disagree with me...
From there I called a couple other IRA custodians for futures trading accounts - most notably Midland IRA who acts as an IRA custodian for NinjaTrader Brokerage, Optimus, and others. I should first mention that Midland is getting quite a few calls from people trying to find out how to get moved out of IB. They are saying this is just an Interactive Brokers thing, as there are no changes in government rules or directives, etc . Sheer speculation on Midland's part is that IB has somehow fallen out of compliance on how they execute futures trades, and the rules regarding IRAs. They seem to think that IB was given an ultimatum, and had no choice but to suspend all futures and futures option trading. The tell-tale sign is the abrupt fashion this new policy was implemented.
Last edited by harvester; March 6th, 2015 at 03:03 PM.
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I have good things to say about my experience with Midland so far. It is short, but they came recommended, and I have made some excellent contacts there that have been of great help with everything so far. My situation is slightly different, as I am using a "checkbook IRA" LLC, with the LLC being offshore.
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