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Warning on IB internal position transfers

Discussion in 'General Discussion' started by Edward, Mar 16, 2017.

  1. Edward

    Edward Well-Known Member

    I have a warning about IB internal transfer between accounts in your own name.
    When you select the positions you want to transfer such as a simple butterfly often times it is just a partial transfer. Many times only the long leg of the butterfly transfer from the sending account. The short stays behind. IB does not send you any message or any email telling you not everything you selected is transfered. Apparently I was told. by IB that transfers are done one leg at a time and margin impact are considered one individual leg at a time. It is possible to transfer a butterfly but you have to break it up into several transfers.

    When you transfer a vertical spread if any of the strikes oppose each other the position will not transfer. For example if the receiving account has a. SPX APR -2400P and you transfer in SPX APR +2400P it will not transfer. Several IB trading desk representatives said it will transfer resulting in a closed 2000P. It is not the case. Again IB gives no warning on what is not transfered. The only way to tell what is not transfer is to look at the transaction history in account management & check your positions. It normally transfers immediately. Note: If the transfer adds to a strike position it will transfer to the new account. Subtraction is not allowed. It is somehow considered a trade!

    Obviously if a short is left behind in the original account it will sustain a much higher margin and you will be slapped with a Daily Exposure Fee and maybe not be able to trade in an emergency.

    What bothers me is when you trade a butterfly in IB their computers system immediately computes the margin requirements for the complete option position before you can place the trade. It is not the case with internal position transfers between account for complex option positions even simple vertical spreads.

    They inform you when your option is about to expire but if you option positions practically transfers they don't tell you but slap you with a fine. You may find you can't trade because of a naked short that didn't transfer in your original account.

    Who the heck programmed this IB account transfer program? The TWS interface look like something from the 1980's. IB is cheap but in terms of user interface you get what you pay for.

    If you have a similar problem with IB; complain.:eek:
    Last edited: Mar 16, 2017
  2. Rtb

    Rtb Well-Known Member

    I agree about TWS. You would think I.B would invest some profits and upgrade it.
  3. Edward

    Edward Well-Known Member

    It's probably would be a worse nightmare with an external account transfer. That's not even considering the time involve that you can't trade. I wouldn't ever consider an external transfer with an actively traded account.
  4. tom

    tom Administrator Staff Member

    I've found with IB it's best to go to 100% cash before doing any transfers. It makes it clean and easy.

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