Interactive Brokers Reviews

In December 2021, a situation arose that I needed a US-listed stock transferred to my Interactive Brokers account from a transfer agent located in Canada. Because there was likely going to be a surge of people transferring and selling the stock at the same time as me (due to a SPAC-related restriction period expiring), I wanted to get the stock into my trading account as quickly as possible. I coordinated with the transfer agent and IB in the days leading up to the date that the restriction would expire, and confirmed that everything was in order to transfer the stock, which it was. Until the day came that the transfer was to be initiated.

The morning of the date that the transfer was supposed to be initiated, I was contacted by Interactive Brokers for more information, which I promptly provided (of course, I had previously been assured that they had everything they needed, but so be it). A few hours later, I was contacted again - the person processing my transfer request, who I will refer to as IBREP, told me that the transfer could not be initiated because IB did not trade the "CAD version of this stock". That alone was not a surprising fact, since NO CAD VERSION OF THE STOCK EXISTS! The shares were US-listed shares held at a Canadian transfer agent - the transfer agent's written instructions (with which IB had been provided) specifically contemplated this scenario.

I engaged in some back and forth with IBREP via IB's messaging system, because apparently the group that IBREP belongs to is not allowed to speak verbally to clients. So instead I had an infuriating text back and forth where IBREP continued to insist that my shares were in fact a Canadian stock and that there was no way that a US-listed stock could be held at a Canadian transfer agent. Which was obviously untrue, because my US-listed stock was held at the Canadian transfer agent at that moment! The fact that the CUSIP listed on my statement and the CUSIP for the US-listed stock were the same did not resonate with him - he continued to insist that I instead owned a stock that did not exist. When I called IB's customer service and told them I was having issues, they just directed me back to the chat with IBREP and said they could not help any further, I should direct all my inquiries to IBREP via the messaging system.

At this point, I called the transfer agent's customer service to see if they could clarify the situation. The person I spoke with at the transfer agent was incredibly confused when I read him IBREP's messages, telling me, "I have no idea why they're telling you that; it doesn't make sense and it's not correct. All they need to do is submit a DRS request for these shares, it should be very standard."

I then put IBREP in touch with the transfer agent, whose representatives he apparently spoke with. IBREP came back to me to tell me that the transfer agent had not been helpful. He continued to list problems with the transfer that made no sense and then asked me to provide more recent DRS Advices from the transfer agent, as the DRS Advices that I provided were more than a year old (according to him). That was news to me, as the statements I had provided were in fact only a month old!

IBREP, supposedly an experienced expert at these transfers, had not even managed to correctly read the statements I had provided! Also, if he couldn't do the transfer at all, why did he need newer statements? It was pretty clear at that point that he had made up his mind not to do this transfer and was just stalling and trying to get rid of me (getting new DRS Advices from this transfer agent takes several days or weeks, which presumably would make me no longer IBREP's problem).

I pointed out that my DRS Advices were in fact current, and IBREP did not even acknowledge his mistake. Instead he came up with new problems as to why the transfer would be difficult, and that IB would have to take additional steps to do transfers like this, and the standard procedures would not work. He now seemed to be saying that the transfer was possible, but he was very blatantly leaving it completely ambiguous as to whether or not IB was willing to take these steps. By this point the market had long closed for the day, and my friends who were in the same situation (but with other brokers) had initiated their transfers with no problems whatsoever.

At this point I gave up trying to reason with IBREP and Interactive Brokers, and started an account with Charles Schwab instead. Charles Schwab was extremely easy to deal with and ultimately transferred the shares with no issues whatsoever. The debacle caused a 2-3 day delay in my shares being transferred, during which time the stock cratered, as expected, due to the sudden unlocking of huge numbers of shares. IB and IBREP's inability to do their job wound up costing me highly significant amounts of money. I closed my account with IB and will never, ever, ever recommend them to anyone ever again.

Frankly, we need laws to deal with issues like this. The broker and its representatives should be held liable when they cause losses due to their incompetence. All of my interactions with IB and IBREP were recorded - I don't understand how IB continues to employ someone like IBREP after seeing how he handled a situation like this. IBREP claimed to be an expert with a decade of experience at his job, but he also seemed to have no idea what he was talking about and was saying things that were completely false and nonsensical. It seemed like at some point he was just trying to find a reason, any reason, real or made up, to deny the transfer. No brokerage should be allowed to operate like this.

Conclusion: Interactive Brokers is fine as long as you don't need to use their customer service. But if you need them to do something, be ready to deal with people who don't know how to do their job, and, worse, either don't even seem to care or are actively working against you.

Second, the platform just isn't very smart. They freak out about market orders for ultra liquid securities like SPY or QQQ and send a million warnings to you. That is laughable. Lastly, the whole "no fees" thing is a joke. There are loads of hidden fees they try to hit you with (I got hit with a minimum balance fee when I put my first deposit in!). In an age of super user friendly platforms that are modern and intelligent (Ameritrade, Fidelity, Schwab, Robinhood), there is absolutely no need to use this crappy brokerage.

On friday, I picked up 2500 contracts (100 shares per contract) in a SPY 3/26 393. I was in and out of these, but probably my basis was .10-.20 (per share if you're new to options... Total cost in about 25k = 2500 * .10*100. I sold some (1000) at about $0.22 at maybe 3:30 with the intent of reentering if it turned. It turned. So I tried to reenter. But then the "IB ALGO" decided that particular option was likely to expire ITM, and thusly decided I could **no longer buy it back**.

From there, the option rallied to .91 cents by about 3:51, when you the IB algo sold basically ALL of the remainder of my contracts, leaving me with like 20 or something of a similar magnitude. In the next nine minutes, the option rallied to $2.50. From $0.20. Then, just after close, I sold my remaining, I don't know, like 17 contracts. ...Cause you can execute spy options after close. But the algo doesn't provide this option.

You'll note, I intended, and had IB not screwed me with their "default policies" "enforced by algo", I would have nailed at least a 10x on 25k. Possibly as much as a 20x on 25k. In like 3 hours. This is like, the best trade ever. And that's like, a lot of money. And it's my birthday week, and I know that's irrelevant, but man. The way I see it, I should have ended the day with at least 250k in new cash, maybe as much as half a mil. But then IB screwed me, cuz your "policy". Yes, I understand this is the policy of most brokerages. I use three to trade options. Yes, I understand margin. But, no, this is absurd.

IB has access to basically unlimited cash at basically 0 cost through the overnight markets. IB can borrow at zero, and execute my 500k profit of options to the 7mm worth of shares, then sell them immediately. Or, just sell the option at 4:01. AND IB then could CHARGE ME BOTH COMMISSION (on 500k profit) AND MARGIN (on 7mm). But you refuse to.

It makes no sense that you would refuse that profit, so I have to assume they didn't actually liquidate those options, but shifted them to their own balance sheet once they decided they were "becoming more profitable". And, I would get it, if at any time customer service reps had said "the SEC requires...". BUT THEY DIDN'T because THEY DONT. IB are crooks, like the rest of the financial industry. Yeah look, I didn't have 7mm in cash, but I have plenty of mm in assets, and you'll be hearing from a lawyer as well as the BBB. And if we don't resolve this, I have half a mind to start my own brokerage, because DAMN.