Thread by @theBuoyantMan

I have been an Interactive Brokers user in India as my primary broker.

Other than IBKR, I have had the following accounts

- Zerodha
- Angel (as part of Minance)
- Fyers
- Finvasia

A thread on IBKR and WHY IBKR 👇👇👇

1/ I was introduced to Interactive Brokers by a person who works with Oanda (a forex operator).

I liked their philosophy - they mainly cater as prime brokerage for small hedge funds and HNI people.

They are primarily risk averse, with focus on execution and stability.

2/ Account opening process took 40 days for me. I was fine with it. I had tried their demo and I was sold on their desktop platform.

Although the UX initially seemed like operating a NASA console, it grew on me and I have grown fond of the customisability.

3/ Now, the DISADVANTAGES of IBKR:

i) They are super risk-averse. They will ask for extra buffer amount alongside Exchange-guided margins.

For ex: If Nifty futures exchange guided margin is 1.3 lakhs, IBKR will ask 1.7-2 lakhs per lot.

ii) They have designed their platform to be free of requirement for customer support. You will ALMOST NEVER face an issue.

In the rare occurrence you face an issue, it's usually quite hard to get ahold of someone who can solve your problem.

I have never had an issue with that. Their customer care is super-responsive (within 30s-1m wait time) during market hours, so it has never been an issue for me.

I faced an issue once in the last 1.5 years, and that time it was the mistake at the exchange's end.

iii) Their order management system sits at HongKong and execution server is colocated in Mumbai within NSE.

So, your orders go to HongKong and then from there to their server in NSE, from there they send it to exchange.

Due to this, their latency is higher than other brokers.

When I say latency is higher, it's in the order of few hundred milliseconds. When your order size goes up, the execution delay will most likely grow, especially if yours is a system based on breakouts.

iv) Their web platform is decently usable, but a far-cry compared to platforms like Zerodha kite in terms of user experience.

That said, once you load their web platform, it's quite similar to their desktop platform only. Quite nimble.

Their mobile app is so-so.

v) They don't allow you to trade on Muhurat Trading, and they are usually closed for trading on New Year (when NSE works if it is a week day).

So, during these two instances, you'll have to have a backup broker to trade with.

These are all their negatives/disadvantages.

Now for the positive aspect.

i) The TWS platform has NEVER ONCE faltered. In the last 1.5 years of trading on their platform, I have only faced an issue once and that too was exchange end issue.

ii) TWS application grew on me. I love the ability to customise it according to my needs and have a terminal where I can get the info I want from one screen.

iii) Their order types are awesome. Although I haven't used conditional orders, for some systems it's very useful.

iv) I trade peacefully. I don't have to swear at the broker or at the CEO or go write angry tweets on Twitter about the broker.

This is a byproduct of well coded product and well maintained systems with enough redundancy and capacity.

v) During high volatility and event based days, not once has the broker limited the trading of any strikes, not once has the broker went offline or system stopped working. NOT ONCE.

When oil market went negative, few of their clients suffered losses.

Other brokers would have asked for customers to put up collateral and would have sued the customers for recovery.

But IBKR bore the costs and took around 70-80M dollar loss.

They did this due to being accountable for not keeping their systems ready for negative prices.

vi) Their CEO is a tech purist. He's a rock solid technology guy and made his money through years of persistent hard work on improving the reliability of his systems and dependable execution.

That's why they have the name they have.

vii) IBKR is a listed company worth over $90 Billion dollars. That's something significant for me.

US listed companies have FAR MORE accountability and restrictions from SEC in terms of reporting requirements, so I can actually trust my money to be parked in this broker.

4/ Their trading API (Python/C++/ExcelRTD) are free. No cost.

Downside is that, the API doesn't have enough documentation or an active community.

You have to figure it out for yourself.

5/ You can't pledge shares and get margin. They are a cash only broker for Indian market.

6/ You can't trade MCX. They have only NSE BSE membership.

7/ They will settle your money every quarter.

So you will have to plan around the quarterly settlement (which they notify a week prior) and make sure you deposit cash on the day the settlement happens.

8/ I am not a hardcore options trader, but they have extensive features for an options trader.

Just that they don't allow any leverage or collateral.

They provide ZERO LEVERAGE.

9/ So, by default I can't trade with interactive brokers and trade like a moron and run the risk of blowing up.

That's predominantly why I chose Interactive brokers - coz using it as my primary broker itself acts as a top notch risk management strategy.

10/ Also, they have the same brokerage structure as Zerodha I think. Rs. 20/- per order with a minimum brokerage of 200 rupees per month. If you don't trade in a month, 200 rupees will be deducted from your account.