- How do I change my financial
- When I try to change my commodity account
trading limit it does not take effect?
- Why use smart routing?
- Where can I receive additional information
- Does Interactive Brokers provide services
for corporate action?
How do I change my financial
You may update your financial data by going to the IB website and logging into the Retail Account Management System. You should then click on the "Change Financial Information" button and follow the instructions that are provided.
When I try to change my commodity
account trading limit it does not take effect.
IB policies regarding commodity account trading limits take into account the user's financial situation, along with other possible factors. As such, you may find that your maximum trade size is capped at a lower number than you desire. The "Change Trading Limits" page displays your current limits, as well as the maximum allowed limit for your account. Regardless of the user's financial situation, IB will not allow users who have not accepted the Arbitration Agreement to have a trading limit of more than one contract.
Why use smart routing?
Interactive Brokers offers its customers a software product referred to as "Smart" order routing. Smart Routing software continually scans competing markets and automatically routes orders directly to the best ECN or market center -- based on price but also taking into account factors such as the availability of automatic order execution.
Each ECN and market center administers its own set of trading rules. Accordingly,
Customers that do not select smart routing should carefully review the following
links for information on the various trading rules.
American Stock Exchange
BTRADE Bloomberg Tradebook (ATS)
Brokers Utility ECN (BRUT)
Chicago Board Options Exchange
New York Stock Exchange
Pacific Coast Exchange
Philadelphia Stock Exchange
For more information on IB's Smart Routing System, click here.
Where can I receive additional
information on options?
On July 3, 2000, The Options Clearing Corporation began operating a call center to serve individual investors and retail securities brokers. The resource will address the following questions and issues related to OCC cleared options products:
Options Industry Council information regarding seminars, video and educational materials;
Basic options-related questions such as definition of terms and product information;
Responses to strategic and operational questions including specific trade positions and strategies.
The call center can be reached by dialing 1-800-OPTIONS. The hours of operation are Monday through Thursday from 8 a.m. to 5 p.m. (CST) and Friday from 8 a.m. to 4 p.m. (CST). Hours for the monthly expiration Friday will be extended to 5 p.m. (CST).
Does Interactive Brokers provide
services for corporate action?
Yes, Interactive Brokers services include processing mandatory corporate action (e.g. prompt dividend recovery, spin-offs, stock splits, effective mergers and etc.). Moreover, at no extra cost.
However, IB does not provide any form of advisory service, including corporate action advice. Customers are responsible for knowing the rights and terms of any corporate action relating to any security or position in their account. Customers are also responsible for providing instructions regarding the handling for any voluntary corporate action.
- What is the Timber Hill Automatic Execution Service for IB customers?
- How can I benefit from the service?
- Does the service include both Nasdaq stocks and exchange-listed stocks?
- How does this affect IB's order-by-order Best Execution routing system?
- Will my orders have a chance for price improvement?
- What is meant by "Best Available National Price"?
- Will Timber Hill ever hold on to my order if it is routed to the Timber Hill Automatic Execution Service?
- How can I be sure that orders sent to Timber Hill's Automatic Execution Service are receiving best execution?
- What if I want to route an order directly to Timber Hill?
- Can Timber Hill "peek" at my orders and trade ahead of me before my order is executed?
- How will I know if my order was automatically
executed with Timber Hill?
Timber Hill provides an automatic execution service for certain eligible IB customer orders in certain Nasdaq stocks and NYSE and other exchange listed stocks. When IB's Best Execution order routing system searches the available market centers for your order, if Timber Hill is willing to provide an execution at the best available national price or better for that stock, IB may send your order to Timber Hill for an immediate automatic execution.
If your order is eligible for automatic execution, you will get as good a price as any price available in the national market system and, most importantly, your order will get executed immediately, with no delay or chance of the market price moving away from your order before it is executed.
The service includes certain Nasdaq stocks as well as certain listed stocks.
Orders will be routed individually to the best market. Timber Hill is included in the list of available routing destinations. If Timber Hill is willing to provide an execution at the best available national price or better, your order will be eligible to receive an instant, automatic execution.
Yes. Orders routed to Timber Hill may be executed at better than the national best bid or offer. Moreover, if an order receives price improvement, it will be instantaneous and will not cause delay in execution. This is in contrast to the practice of some other specialists and market makers -- who may hold on to your order while they look for price improvement but may never execute your order if the market moves in your favor.
Best available national price means the best quote posted in the consolidated quote system that is valid for purposes of the intermarket trading system trade-through rule. Please note that if a quote is posted by a U.S. national securities exchange and the associated size is only 100 shares, this quote may not be considered as part of the best available national price. This is because such quotes are usually "default" quotes that may not be valid. Thus, if the New York Stock Exchange is posting the highest bid or lowest offer in the market but the bid or offer is for only 100 shares, this bid or offer is not considered to be the best available national price and Timber Hill is not required to execute an order in that stock at that price or better.
No. All orders routed by IB to Timber Hill will be immediately automatically executed, with no delay and no human intervention. IB will not route any orders to Timber Hill that are not immediately executable. Thus, Timber Hill will not handle or represent non-marketable limit orders.
First, you will see on your Trader Workstation that orders sent to the Timber Hill Automatic Execution Service are being executed immediately at the best national price or better. In addition, every month Timber Hill will post SEC-required statistics regarding the orders executed on the Service. These statistics will show speed of execution, size, price improvement and other valuable data.
IB is unable to offer that service at this time.
No. Strict procedures prevent disclosure of your orders prior to their automatic execution by Timber Hill. Again, unlike some other specialists and market makers, with the Timber Hill Automatic Execution service, you will see your orders being executed immediately.
If an order was automatically executed through the Timber Hill
service, this will be indicated on your daily statement.
- Account and Funding
- Account Protection
- IB Canada
- Secure Transaction Program
do I find out about the status of my account application?
Once all account application materials have been received at IB, the application will be reviewed and a decision will be made to either accept or decline the account. An e-mail will be sent to the applicant informing them of the decision. In addition, you may log into Complete Application to view your latest status.
I fund an account in a different currency than the base currency?
Yes, you can deposit and withdraw funds in any of the offered currencies if you have a margin account. Cash accounts may only fund in the base currency.
you convert funds from one currency to another?
No, IB does not convert funds but IB customers may convert currencies through the IB Forex trading Network (IDEAL).
I transfer money between different IB accounts?
Yes. See IB's Transfers page for instructions and details.
my account insured?
The securities portions of your account is insured for up to $30 million regardless of your country of residency. Excess funds in your commodities account are swept into your securities account at the end of each day. Click here for specifics on your insurance protection.
- How is the “per client” coverage
applied if I maintain multiple accounts with IB?
- How does the aggregate loss limit affect the
protection of my account?
How is the “per client” coverage
applied if I maintain multiple accounts with IB?
Multiple accounts maintained in the same name and taxpayer ID number are grouped for purposes of applying the maximum per client protection limits of $500,000 by SIPC and $29.5 million under Lloyd’s supplementary protection. However, if you hold accounts with IB in separate capacities (for example, an account in your name, a trust account of which you are the trustee or a beneficiary, or a joint account), then each account would be protected by SIPC and the supplementary protection up to the stated limits.
How does the aggregate loss limit affect
the protection of my account?
IB’s supplementary protection from Lloyd’s of London is subject to an aggregate loss limit of $150 million. This is the maximum amount available to cover IB’s customers in excess of SIPC protection. In the unlikely event of a financial failure of the firm coupled with client assets not being fully recovered, SIPC (or a trustee appointed by the federal courts) would advance funds to each eligible client (for more details visit http://www.SIPC.org). Because most accounts maintain less than $500,000 in net equity, SIPC protection would cover the large majority of customer assets held by IB. In the extremely unlikely event of a total loss of customer assets, the supplementary protection would be needed to cover a relatively small portion of the total net customer equity held by IB. Although possible, it is improbable that the aggregate loss limit would be reached. However, if the supplementary protection fell short of covering all customer assets, the coverage would be allocated on a pro rata basis to the client accounts that required protection.
What is ACATS?
- What does the ACAT system enable my broker
- How long does an ACAT usually take?
- Should I already have an account open before
I start an ACAT to IB?
- How do I initiate an account
transfer that IB will receive?
- What if my current brokerage firm is not
listed on the Current Firm dropdown menu?
- What products can I transfer?
- Can I transfer a Traditional
IRA to a Roth IRA?
What is ACATS?
The Automated Customer Account Transfer Service (ACATS) is the National Securities Clearing Corporation's (NSCC) central processing system for the transfer of positions and accounts between brokerage firms that are participants of the NSCC's ACAT program.
How long does an ACAT
Under normal circumstances, an ACAT should take between four to eight business days. With some circumstances, such as an attempt to transfer unsettled funds, positions that are not paid in full, or restricted stock shares, this process could take longer.
How do I initiate an account
transfer that IB will receive?
The ACAT feature is available under Account Management. Choose Deposit Instructions from the Customer Menu. You will be prompted to select the firm and account number at the firm.
What if my current brokerage
firm is not listed on the Current Firm dropdown menu?
The dropdown menu is a listing of Clearing Firms that are participants in the ACAT program. Not all firms are self-clearing. If you do not find your firm on the list, please contact one of their representatives to identify their clearing firm.
What products can I transfer?
Interactive Brokers accepts only products that are available for trading. Certain products, such as Fixed Income Instruments, Mutual Funds and Limited Partnership units cannot be held in your Interactive Brokers account.
Can I transfer a Traditional
IRA to a Roth IRA?
No. IRAs may only be transferred to the same type of IRA (i.e. Traditional to Traditional, Roth to Roth, etc.) Also note that IRAs cannot contain any margin loans, short positions, or equity option positions.
- My bank debited my account for the ACH transfer and yet IB has a hold period of four business days. Why?
- My bank debited my account for the check that I sent to
IB the next day and yet IB has a hold period of seven business
Check 21 should have sped up the check collection process and yet IB continues to hold customer checks for seven business days. Why?
- My bank debited my account for the Fedwire that I sent to IB and yet IB has not credit the funds to my account yet. Why?
- I have a bank account in the US but I am a customer of Interactive Brokers Canada. Why can’t I use ACH to send funds from my bank account?
My bank debited my account for the ACH transfer and yet IB has
a hold period of four business days. Why?
IB receives value on the business day following its processing date for ACH deposits initiated via the IB website. However, an ACH deposit is fundamentally an electronic check and therefore the originating bank can reverse the transaction and IB’s bank account will be debited, same as a check, because the sender has non-sufficient funds, closed the bank account etc. Therefore, IB has implemented a four-business day hold period to protect itself against these reversals.
IB wishes to keep its commissions as low as possible and therefore it avoids preventable losses. We encourage our customers to send funds via bank check or wire if they wish for immediate availability of funds.
My bank debited my account for the check that I sent to IB the
next day and yet IB has a hold period of seven business days. Why?
Check 21 should have sped up the check collection process and yet IB continues to hold customer checks for seven business days. Why?
IB doesn’t know when customer checks actually clear. IB has a corporate account and our bank credits corporate accounts based on the expected clearing date of the check. IB’s bank uses ABA routing numbers as a proxy to determine how long it will take a check to clear. For ex., IB will receive value on a check drawn on a New York bank quicker than it will receive value on a check drawn on a California bank.
Check 21 is a federal law, effective October 28, 2004, that will improve check processing by eliminating the requirement to physically transport checks between banks. Banks can agree to send each other check images electronically. The impact of this legislation will be gradual since only a few banks currently exchange check images electronically.
Check processing speed has improved because of system developments other than Check 21. However, the return check process does not seem to have improved yet. When the maker’s bank receives a check for payment it either provides payment or submits notification to the payee’s bank that it will not honor the check for payment because of non-sufficient funds, closed account etc. IB’s bank receives the notification of a returned check via the Federal Reserve and deducts the funds from IB’s bank account since it originally credited IB based on an estimated funds availability schedule (not when the check actually clears). IB then reverses the funds to its customer’s IB account. There is no set time frame for returned checks and IB has experienced returned checks up to seven business days.
Before IB implemented the seven-business day hold period, it experienced losses from returned checks. IB wishes to keep its commissions as low as possible and therefore it avoids preventable losses. We encourage our customers to send funds via bank check or wire if they wish for immediate availability of funds.
My bank debited my account for the Fedwire that I sent to IB and
yet IB has not credit the funds to my account yet. Why?
IB's bank typically posts incoming wires to IB's bank account within a few minutes. There can be bank posting delays if there is a lot of fedwire activity for that day.
IB retrieves incoming wires to its bank accounts every 15 minutes during business hours and, if there is match to a deposit notification then our system automatically posts the funds to the customer's account. IB posting delays to customers' IB accounts can occur because:
- the customer didn't submit a deposit notification
- the sending bank improperly formatted the wire (and therefore
customer identifiers do not appear on IB's bank reports)
- the sending bank misspelled the customer’s name or incorrectly
input other customer identifiers so an automatic match to the
deposit notification cannot occur
- IB's bank didn’t display the customer identifiers on its bank reporting system (we then ask our bank for additional details on the incoming wire)
If IB can't identify who the customer is then IB will return the funds to the sending bank.
I have a bank account in the US but I am a customer of
Interactive Brokers Canada. Why can’t I use ACH to send
funds from my bank account?
Our website recognizes Interactive Brokers ("IB") customers vs Interactive Brokers Canada ("IBC") customers and prevents IB customers from initiating EFT transactions and IBC customers from initiating ACH transactions. The reason why is that the Investment Dealers Association of Canada ("IDA") mandates that IBC customer cash must be deposited to/disbursed from IBC bank accounts so ACH transactions are mapped to IB bank accounts and EFT transactions are mapped to IBC bank accounts.
- What are IB's Market Data fees?
- What are IB's commission rates?
- What is the round turn commission rate?
- How much money is needed to open an
What are IB's commission
IB fees for individual accounts are stated on our website. Click here to see them. Commissions and fees are calculated per contract or minimum per order (if the per contract charge does not exceed the minimum commission fee). If you were to buy five futures contracts by placing five orders for one contract each, the commission would be five times the minimum per order commission. If you were to place an order for five contracts and it turned out to be executed in five one contract pieces, the commission would be five times the per contract commission as the minimum is per order and not execution. Similarly, if you were to place an order for five contracts and it is filled in a single execution, you will again be charged five times the per contract commission.
How much must I deposit
to open an account?
The initial minimum account deposit is summarized on the Account Types page. Please be certain to differentiate between the initial minimum account deposit and the initial margin required per contract. The former is the minimum amount of money required to open a specific type of account. The latter is the amount of net liquidating value that must be in the account for each contract in the user's entire portfolio plus any contemplated trade in order for IB to accept such contemplated orders.
- How do I open an account?
- Can I fax/email the required documents to open my account?
- How long will it take for account approval?
- Why must I send a one Canadian dollar cheque to Interactive Brokers Canada, and is the cheque credited to my account or refundable?
- Why do I have to fill out a W8 if I am a Canadian citizen with an account at IB Canada, a Canadian company?
- Do you offer registered (RRSP, RRIF, RESP, etc) accounts?
- How do I deposit funds to my IB account?
- How do I setup an EFT (Electronic Funds Transfer) link with my bank account?
- Must I use the deposit notification form each time I deposit funds by wire?
- Why was my account transfer request rejected?
- Why was my withdrawal request rejected?
- My account was approved. Where do I go to start trading?
- Do you automatically convert funds when I buy a US stock?
- What Canadian securities are NOT available for trading?
- How does the SEC day trading rule (PDT) affect Canadians?
- For the SEC day trading rule, does the $25,000 need to be in Canadian dollars or US dollars?
- Are the commissions quoted in US dollars or in Canadian dollars? Is there an exchange rate difference?
- Which office do I contact if I have a trade problem?
How do I open an account?
Simply click on Open an Account on the main page of our website and complete an online application.
You will also need to print and mail some of the online forms to our office.
Can I fax/email the required documents to open my account?
We cannot use faxed/emailed documents. We need to receive the originals by mail or courier at our Canadian office before your application can be approved.
How long will it take for account approval?
Approval generally takes 1-2 business days after you have completed the necessary on-line account registration and application tasks, and after we receive the required signed documents (Customer Agreement, Shareholder Instruction Form B & C, Consent to Electronic Delivery) along with the one dollar Canadian cheque to Interactive Brokers Canada.
Why must I send a one Canadian dollar cheque to Interactive Brokers Canada,
and is the cheque credited to my account or refundable?
Interactive Brokers Canada is able to satisfy verification requirements of customers if the one Canadian dollar cheque clears through the Canadian banking system. The cheque will not be credited to your account and it is non-refundable.
Why do I have to fill out a W8 if I am a Canadian citizen with an account
at IB Canada, a Canadian company?
You are required to complete and file a United States Internal Revenue Service (IRS) Form W-8 since you have the ability to trade US products and earn US-source income (e.g. interest and dividends). The IRS requires that IB Canada customers file a Form W-8 so that IB Canada can avoid withholding funds from your account for US taxes at a higher penalty rate.
How do I deposit funds to my IB account?
The acceptable funding methods are explained here.
How do I setup an EFT (Electronic Funds Transfer) link with my bank account?
IB Canada customers can transfer funds electronically from a Canadian bank account denominated in Canadian or US dollars. You must create an EFT instruction during the account application, or at any time after your account is open in Account Management.
|First, you must create an EFT instruction:|
|Step One: Create An EFT Instruction|
|Step Two: Confirm The EFT Instruction|
Within 1-4 business days, IB will debit and credit two small test amounts to your bank account. Wait for the two amounts and take note of them.
Once you see the amounts on your bank account:
|Step Three: Request A Transfer|
Now, you may use this EFT instruction. To request an EFT deposit:
Note that you only need to create an EFT instruction once. Once confirmed (step 2), this instruction will then be available to transfer funds to and from your bank account.
You may create multiple EFT instructions. Please click here for hold periods information.
Must I use the deposit notification form each time I deposit funds by wire?
You must use the deposit notification form so that we have advance notice that you are depositing funds. This will allow us to ensure that your funds are credited to your account. If you do not use the deposit notification form, you will experience delays in having the funds credited.
Why was my account transfer request rejected?
The most common reason for a rejected account transfers is an invalid or incomplete account number. Please make sure to read the information shown at the bottom of the screen when entering the delivering institution name and account number. To avoid any delay in processing, customers should also check with their existing broker to confirm this information. For assistance, please contact the IB Canada helpdesk.
Why was my withdrawal request rejected?
A withdrawal request will be rejected if the amount requested exceeds the amount available for withdrawal. Please see this page for more information on hold periods. EFT deposits may only be withdrawn using the originating EFT instruction for 60 business days.
Do you automatically convert funds when I buy a US stock?
IB does not automatically convert currencies for you. You may convert currencies anytime by placing a forex trade. Click here for instructions on currency conversions with TWS.
|How to convert funds using the Traders Workstation|
On a trading page, enter a symbol and choose Forex.
In the contract selection window, choose the exchange (IdealPro if quantity above 25,000$US or equivalent), and choose the other currency.
Click OK to get a quote.
Click on the bid price or ask price to create an order. Choose the quantity and order details. Click T to transmit.
Here are a few examples,
Converting 10,000$ CAD to USD :
Buying 50,000$USD using $CAD:
Click here for more details on IBs forex product offering.
|How to convert funds using Webtrader:|
To access Webtrader, click here.
To convert funds, follow these simple steps:
Converting 10,000$ CAD to USD at market:
Example 2 :
Buying 50,000$USD using $CAD at limit price:
here for more details on IBs forex product offering.
Your base currency only determines the currency of translation for your statements. It also is used for displaying combined margin requirements.
For cash accounts, base currency determines the currency of products you are allowed to trade. You can only trade in products of the base currency for cash accounts.
Base currency does not affect the actual cash balances in the various currencies.
What Canadian securities are NOT available for trading?
IB does not offer Canadian Bonds and Mutual Funds. Due to technical or regulatory issues, IB also does not currently offer trading on Canadian warrants, stocks with symbols ending in .H and .U, and Limited Partnership (LPs).
How does the SEC day trading rule affect Canadians?
Since IB U.S. securities and options trades are cleared in the US, the SEC pattern day trading rules are applicable. If you effect 4 stock or equity option "day trades" on a US exchange within a 5 business day period, you will be designated as a "pattern day trader". The "pattern day trader" designation will require that you maintain a minimum of $25,000 (US dollars) to continue trading. For more information, please click here.
Are the commissions quoted in US dollars or in Canadian dollars? Is there
an exchange rate difference?
Commissions are quoted in the currency of the exchange on which the trade took place. Exchange rates are subject to fluctuation.
Which office do I contact if I have a trade problem?
Please contact Interactive Brokers by chat or telephone. Click here for contact information.
What jurisdiction's tax laws am I subject to?
You must consult with your independent tax advisor regarding the tax implications of your Interactive Brokers Canada account. Neither Interactive Brokers Canada nor its personnel are authorized to provide you with tax, investment or other advice.
How do I make a suggestion or request to IB?
We encourage our customers to submit suggestions through our website, under Education/New Features Poll. You may also vote for other traders suggestions.
- What is an IRA?
- What types of IRA Accounts are available?
- Are there any fees for opening an Interactive Brokers IRA?
- What is the minimum deposit required to open an Interactive Brokers IRA Account?
- What is a Traditional IRA?
- How do I know if I am eligible to make a contribution?
- How much can I contribute?
- When may I withdraw funds from my IRA?
- How do I take a distribution?
- What is an IRA Rollover?
- Can I rollover an existing IRA with another broker to Interactive Brokers?
- What is a Direct IRA Rollover?
- How do I move my current employer sponsored retirement plan to an Interactive Brokers IRA?
- What is a Plan Sponsor?
- Is there a way to avoid the 20% Withholding Tax on my Retirement Plan Distribution?
- What is a Conduit IRA?
- How do I transfer my existing IRA to Interactive Brokers?
- Is there a Maximum IRA Transfer or Rollover?
- Can I contribute to an IRA if I already have a retirement plan through my employer?
- What is a Roth IRA?
- What is a “catch up” IRA contribution, and am I eligible?
- Who is eligible to make a contribution to a Roth IRA?
- Can I still contribute to a Roth IRA if I’m older than 70 1/2 and I’m still working?
- Can I deduct my Roth IRA contributions?
- When may I withdraw my Roth IRA earnings income tax free?
- Can I convert my Traditional IRA into a Roth IRA?
- Can I rollover a distribution from my retirement plan through my employer into a Roth IRA?
- When am I required to begin taking distributions from my Roth IRA?
- Can I have both Traditional and a Roth IRA?
- What is a 403(B) Tax Sheltered Annuity?
- Can I rollover a 457 deferred compensation plan through my employer into an IRA when I leave my employer?
- Can I transfer my current pension plan to an IRA at Interactive Brokers?
- What is a mandatory distribution?
- What is the tax consequence of taking a distribution?
- What are the tax consequences of taking an early withdrawal?
- Are IRA accounts subject to any restrictions?
- How to open an IRA account?
- What can I invest in?
- What commissions will I pay?
- Who is the Custodian?
- What are the types of deposits allowed?
- Can I transfer between Interactive Brokers IRA accounts?
- What type of Installment Payouts are allowed?
is an IRA?
An IRA is a tax-deferred retirement account which allows an individual to set aside a certain amount per year with earnings tax-deferred until withdrawals begin at age 59 ½ or later. Only those who do not participate in a pension plan at work or who do participate and meet certain income guidelines can make deductible contributions to an IRA. All others can make contributions to an IRA on a non-deductible basis. This non-deductible type of contribution does not qualify as a deduction against income earned that year, but interest accumulates tax-deferred until the funds are withdrawn.
types of IRAs are available?
IB offers a wide range of IRAs, including Traditional, Roth, SEP and Rollover IRAs. Remember that in order to take advantage of the tax benefits offered by the Internal Revenue Code for a given year, customers must open and fund their IRAs by April 15 after the close of the tax year.
there fees for opening an Interactive Brokers IRA?
No. Although IB does not charge an annual custodial fee, or an account termination fee, there is a monthly commission minimum of $10.00 or USD equivalent.
is the Minimum Deposit Required to open an Interactive Brokers
The minimum deposit required is US $4,000. (This is the minimum deposit required for a Stock Only Cash Account, which is how your IB IRA will be structured.)
is a Traditional IRA?
A Traditional IRA (Individual Retirement Account) is a self-sponsored retirement savings plan. Contributions to an IRA may or may not be tax-deductible depending on your adjusted gross income. Consult your tax advisor to answer questions about your eligibility for tax deductions.
I know if I am eligible to make a contribution?
You can contribute to a Traditional IRA if you have earned income and are under the age of 70 ½. If you are not employed, but have a spouse who is, your spouse may be able to make a contribution on your behalf.
How much can I contribute?
Review the IRA Contribution Limits page.
When may I withdraw funds from my IRA?
In general, withdrawing your IRA prior to age 59 ½ means you'll have to pay a 10% early withdrawal penalty. You may avoid the penalty if you're withdrawing because of:
- First time home purchase ($10,000 lifetime limit)
- Qualified education expenses
- Substantially Equal Periodic Payments - 72(t)
- To pay for health insurance premiums if unemployed more than 12 consecutive weeks
- Medical Expenses in excess of 7.5% of your AGI (Adjusted Gross Income)
- IRS Levy
How do I take a distribution?
To withdraw funds, complete our Withdrawal Instructions form under Account Management. Customers may request Normal, Early, Early with Exception, Disability, Death, and Excess Contribution Distributions. Please choose the correct Distribution type on Withdrawal Instructions form under Account Management. You will need to also specify the amount of withdrawal and tax withholding instructions.
is an IRA Rollover?
A rollover requires a distribution from an IRA or qualified plan, which is then rolled over into an IRA account within a 60 day period to complete the rollover transaction. While the rules for rollovers and transfers differ, they accomplish similar objectives. Both rollovers and transfers facilitate the tax-free movement of IRA monies from one trustee or custodian to another.
One kind of IRA rollover involves moving monies from an existing IRA account to another IRA account, and another requires a distribution from a qualified pension, profit-sharing, or 403(b) Tax-Sheltered Annuity plan. In either case, you have 60 days in which to complete the rollover. One IRA rollover per 12 calendar months is permitted.
I Rollover an existing IRA with another broker to IB?
Yes. A rollover takes place when the IRA funds are paid directly to you and re-deposited (roll-over) into an IRA within 60 calendar days of receipt. The 60-day period begins the day after you receive the payment. A rollover transaction from an IRA may not occur more than once during a 12-month period. This 12-month rule applies to each separate IRA you own and is determined from the date the IRA funds are received. (The 12-month limitation does not apply if the funds are transferred directly from one financial organization into another or if they are rolled over or directly rolled over from a Qualified Plan into an IRA).
is a Direct Rollover?
A direct rollover is a distribution from a qualified retirement plan such as a pension, profit-sharing, Keogh (HR-10), or 403(b) Tax-Sheltered Annuity program, which is sent on your behalf directly to a new trustee/custodian. A direct IRA rollover can be accomplished by asking the administrator of your qualified plan to make the distribution directly to the new trustee/custodian. Only one direct rollover from an IRA account to another IRA account is permitted in any one-year period. Values distributed from a qualified retirement plan, which are not directly rolled over into an eligible qualified plan or IRA are subject to a 20% federal withholding tax.
do I move my current employer-sponsored retirement plan to
an Interactive Brokers Rollover IRA?
Open an IB Rollover IRA and in the funding section a letter will be created that informs your benefits administrator that you would like to directly roll over your distribution into your IB IRA account. You will have to sign a form authorizing the move. Next, your employer will transfer your payout to your IB IRA account, or they will provide you with a check made out to IB. If the latter is the case, once you receive the check you should deposit it immediately into your IB Rollover IRA. The deposit must be within the time frame permitted under the Internal Revenue Code.
There a Way to Avoid the 20% Withholding Tax on My Retirement
Yes. If your account balance is sent directly by the plan administrator to another qualified plan or to an IRA trustee/custodian on your behalf, the 20% withholding tax requirement does not apply. However, if you do not request a direct rollover of your distribution, 20% will be withheld for federal income taxes.
What is a Conduit IRA?
A conduit IRA is a separate IRA (i.e., non-commingled) account established to receive a distribution from a qualified plan having certain characteristics worth preserving. A good example is a rollover from a 403(b) Tax-Sheltered Annuity into an IRA. Such an IRA may not be rolled back into a 403(b) account at a later date if your funds have been commingled with other IRA monies. A conduit IRA preserves the flexibility to roll the monies back into the original plan and take advantage of loans or other features not available in an IRA. There are no special requirements to establish a conduit IRA. It is only necessary to ensure that the monies are not commingled with any other IRA monies.
do I transfer my existing IRA to Interactive Brokers?
Interactive Brokers Automated Customer Account Transfer System (ACATS) is the National Securities Clearing Corporation's (NSCC) central processing system for the transfer of positions and accounts between brokerage firms that are participants of the NSCC's ACAT program. The NSCC's ACAT system enables your broker to enter, review, and settle account transfers in a fully automated system. Requests for Automated Transfer of Assets must be sent to the receiving broker. Your IB account must be opened and approved before you begin the ACAT.
Under normal circumstances, an ACAT should take between four to eight business days. With some circumstances, such as an attempt to transfer unsettled funds, positions that are not paid in full, or restricted stock shares, this process could take longer. The ACAT feature is available under Account Management. Choose Deposit Instructions from the customer menu. You will be prompted to select the firm and account number at the firm.
there a maximum IRA transfer or rollover?
In most cases there is no limit on the amount you may transfer or roll over into an IRA because you are simply moving the money from one type of retirement plan to another. You may transfer or roll over your IRA regardless of your age. However, if you are 70½ or older, you must receive a minimum required distribution from your IRA each year. This should be taken into account in planning your rollover.
I contribute to an IRA if I already have a retirement plan
through my employer?
Yes. You can contribute to a Roth IRA or Traditional IRA regardless of whether or not you have an employer-sponsored plan. In fact, IRAs are a great way to enhance your savings.
While participation in a retirement plan does not change how much you can contribute to an IRA, it can affect whether or not you're eligible to deduct your contributions to a Traditional IRA on your tax return. But keep in mind that as long as you're under age 70½ and you have earned compensation, you can always make nondeductible contributions to a Traditional IRA and benefit from tax-deferred earnings.
What is a Roth IRA?
The Taxpayer Relief Act of 1997 created the Roth IRA, which allows tax-free withdrawals. Contributions to a Roth IRA are not deductible and the maximum annual contribution is the lesser of 100% of compensation or $3,000. Non-working spouses may also contribute up to $3,000 to a Roth IRA. For individuals age 50+, contributions may be increased by $500. Taxpayers with joint adjusted gross income under $150,000 (under $95,000 for single taxpayers) may make full Roth IRA contributions. Contributions may be made beyond age 70½ and qualified distributions from a Roth IRA are tax-free, subject to IRS limitations. There are no required minimum distributions on Roth IRAs.
To be eligible for conversion, adjusted gross income cannot exceed $100,000 (not counting the income from the conversion). The conversion amount is taxable at ordinary income rates, but the 10% premature distribution penalty tax does not apply.
Holders of existing IRAs must convert to a Roth IRA before transferring to Interactive Brokers.
is a "catch-up" IRA contribution, and am I eligible?
The name says it all - catch-up contributions are specifically designed to help those who are getting closer to retirement catch up on their retirement savings. You're eligible as long as you're at least 50 years old during the year the contribution is for, and of course, as long as you meet the eligibility requirements for Traditional or Roth IRAs. Click here for contribution limits.
- Single filers
< $95,000 Full contribution
$95-110,000 Partial contribution
$110,000 + No contribution
- Married filing joint
<$150,000 Full contribution
150-160,000 Partial contribution
$160,000 + No contribution
- Married filing separately
<$10,000 Partial contribution
$10,000 + No contribution
To see if you're eligible to make a Roth IRA contribution, consult your tax advisor or see IRS Publication 590.
I still contribute to a Roth IRA if I'm older than 70 ½ and
I'm still working?
Yes, provided the contribution does not exceed your earned income for the year and you meet AGI eligibility guidelines.
- Age 59 ½
- First time home purchase ($10,000 lifetime limit)
Can I convert my Traditional IRA to a Roth IRA?
You must perform this conversion before you transfer your IRA to IB. Your Modified Adjusted Gross Income can't exceed $100,000 (single or joint filers) in the year of the conversion.
When am I required to begin taking distributions from
my Roth IRA?
You're not required to take distributions from a Roth IRA as long as you live. You can allow your money to grow in a Roth IRA free of current taxes for as long as you choose.
I have both a Traditional and a Roth IRA?
Yes, you can. But remember that you can only contribute up to $3,000 per year to any combination of Traditional and Roth IRAs that you have. You cannot contribute $3,000 to each. On the other hand, your annual $2,000 contributions to a Coverdell ESA are entirely separate from the $3,000 yearly contribution limit for Traditional and Roth IRAs.
What is a 403(b) Tax Sheltered
A Tax-Sheltered Annuity (TSA), also known as a 403(b) plan is named after a section of the Internal Revenue Code. It is an employer sponsored retirement savings program. Participation is limited by law to employees of public educational organizations and certain nonprofit organizations. The vast majority of participants are teachers in public schools, colleges and universities.
Can I rollover a 457 deferred compensation plan through
my employer into an IRA when I leave my employer?
Yes! Balances in a government 457(b) deferred compensation plans are eligible to roll into an IRA.
Can I transfer my current pension plan to an IRA at Interactive
If you are self-employed and have set up your own self-directed retirement plan that offers investing flexibility, and have an independent administration firm which neither limits investment choices nor gives investment advice, this plan can be transferred into a retirement trust at IB through a Direct Rollover.
What is a mandatory distribution?
In a Traditional IRA, you are required by law to begin taking distributions from your IRA in the year you reach age 70½. The amount of the distribution is based on your age and the value of your account. Internal Revenue Service Publication 590 provides the information to calculate the minimum distribution.Required minimum distributions must start no later than April 1 of the year following the year in which you attain age 70½. Failure to take the required minimum distribution results in an IRS penalty tax of 50% of the amount that should have been distributed.
What is the tax consequence of
taking a distribution?
Distributions from a Traditional IRA are treated as income to you. You will receive an IRS form 1099R each January summarizing the amount distributed and the taxes withheld, if any. In a Roth IRA, if you take a distribution after the account has been open five years, the distribution will not be included in your income. If taken within the 5-year period, it will be taxable, like a Traditional IRA distribution.
are the tax consequences of an "early" withdrawal?
An "early" withdrawal is generally one taken before age 59½ in a Traditional IRA or within the first five years of a Roth IRA. In addition to the amount added to your income, the IRS may assess an additional 10% penalty. You should consult with your tax advisor regarding the tax consequences.
Are IRA accounts subject to any restrictions?
Yes. The IRS does prohibit certain transactions on Traditional IRAs. Examples include: borrowing money from your IRA, contributing over your annual limit, rolling funds over from another IRA after the sixty (60) days has expired, or forgetting to take an annual distribution after you have reached 70 ½. As the IRS penalties on these transactions can be severe, it is best to review your situation with your tax advisor
How do I open an IRA Account?
Go to the IB home page and select Open an Account for an Individual.
What can I Invest in?
Stocks, covered call writing (covered shares are restricted), buying calls (funds equal to the aggregate exercise value of the long calls are restricted), and buying puts (shares subject to exercise are restricted), selling cash secured puts, spreads securities with European style expiration, futures contracts, and futures options. The IB IRA is structured as a Stock Cash Account (if you choose to trade only stocks) or as a Stock Options Level I Account (if you choose to trade options in your IRA). IRAs may also invest in US dollar denominated futures contracts, and future option contracts.
is the Custodian?
The Delaware Charter Guarantee & Trust Company, doing business as Principal Trust Company, a Company of The Principal Financial Group, will act as the Custodian for all IB IRAs. As Custodian, Principal Trust Company will handle certain functions, including acting as trustee for the retirement plan; maintaining such plans in compliance with applicable federal laws and regulations; maintaining account information, and preparing and filing IRS forms on behalf of Interactive Brokers. Principal Trust Company's address is 1013 Centre Road, Wilmington, Delaware 19805.
are the types of Deposits allowed?
Wire Transfers, or Cash are currently the only available deposit options. Before you contribute or transfer funds, you must fill out an IRA Deposit Form. Click here for instructions on sending funds for IRAs.
Important: These statements are provided for information purposes only, are not intended to constitute tax advice which may be relied upon to avoid penalties under any federal, state, local or other tax statutes or regulations, and do not resolve any tax issues in your favor.
Interactive Brokers (IB) reports all reportable amounts on specific 1099 forms for each type of income. When issued (on or before January 31 of each year) you may find your forms under Report Management Tax Forms. Often tax forms are revised we recommend that you check your 1099 forms periodically as you prepare and finalize your tax return.
Additionally, IB issues Form 2439, Notice to Shareholders of Undistributed Long-term Capital Gains to holders of regulated investment companies (RIC) or real estate investment trusts (REIT), when applicable. The issuance date of this form varies for each specific investment.
All Publications cited are Internal Revenue Service Publications available at www.IRS.gov.
- What is the purpose of the Form 1099?
- What Form 1099s will I receive?
- When will I receive my 1099 Forms?
- How do I access my 1099 Forms?
- How do I get my 1099 if I am unable to log into my Account Management Menu?
- What must I do if my 1099 form is not included in the Statements and Downloads section of my Account Management menu?
- How do the gross proceeds as reported on Form 1099B - Securities relate to gains or losses?
- What is the Realized Profit and Loss on the 1099-B for commodities transactions?
- Does the gross proceeds balance in the 1099-B for my securities account include commissions?
- Does the gross proceeds balance in the 1099-B for my securities account include equity and index option transactions?
- Does the gross proceeds balance in the 1099-B for my securities account include short sales?
- Does the gross proceeds balance in the 1099-B include sale transactions which have taken place in December, but which will not settle until January?
- What happens if I receive Form 1099-DIV that includes income that needs to be reported by other taxpayers?
- What IRS form(s) do I use to report Form 1099-DIV tax information?
- Does Interactive Brokers send the IRS a copy of my 1099s?
- Where can I find more descriptive information regarding your 1099s?
- If I completed a W-8 form and I am not a legal resident of the United States will I receive a 1099?
- I've received a tax form that is incorrect. How can I get it corrected?
- Why did I receive a Form 1099 for the amount that I received from a deceased/divorced person's account?
- Why did I receive a Form 1099-R for a distribution from my employer's retirement plan that was rolled directly into an IRA?
- Why did I receive a Form 1099-R for my rollover from one IRA to another IRA?
- Why has "Taxable amount not determined" been checked in Form 1099-R, Box 2b despite a balance being reported in Box 2a as a "Taxable amount"?
- Why have taxes been withheld from my IRA distribution, I deposited the funds within 60 days into a new IRA/retirement account?
- What is Form 2439?
- What is Form 5498?
- I already filed my taxes and did not include information reported on Form 1099. What do I do now?
- I already filed my taxes and have received a Corrected Form 1099. What do I do now?
- How do I contact the Internal Revenue Service (IRS)?
What is the purpose of the Form 1099?
Forms 1099 are a series of US Tax information returns which report income earned such as interest, dividends, proceeds from securities and commodities sale transactions, and other reportable payments posted to your account during a calendar year. These reports, which are supplied to the IRS, provide information, which should be used in preparing your tax return. For example, dividends and interest, are reported on IRS Form 1040, U.S. Individual Income Tax Return, Schedule B. Sales transactions are to be reported on IRS Form 1040, U.S. Individual Income Tax Return, ScheduleD.
Information on reporting gains and losses, including determining the cost basis can be obtained by reading IRS Publications 544, Sales and Other Dispositions of Assets, and 551, Basis of Assets. We recommend you consult your tax professional with specific questions.
All of the IRS forms and publications referenced above are available on line at www.IRS.gov/formspubs.
What Form 1099s will I receive?
If you are a U.S. citizens, green card holder, or legal resident, you will receive one or more of the Form 1099s listed below based upon the activity which has taken place within your account over the calendar year:
IB issues 1099 forms by account and earnings type; therefore, if you have both a securities and commodities account you may receive multiple 1099s, for each account. Each 1099 will contain information showing interest earned, dividends received, substitute payments, securities/futures transactions, and tax withheld, if any, depending on the 1099. Specifically, IB issues the following types of 1099s:
Form 1099-INT: Interest Income reports interest income earned in your securities account including cash balance interest. Box 1 contains interest income, exclusive of U.S. savings bond and U.S. Treasury obligations interest. Interest from U. S. savings bonds and US Treasury obligations are reported in Box 3. If the IRS has notified us that backup income tax must be withheld on interest income in your account, this amount will be reported in Box 4.
Margin Interest paid by you is not reported to the IRS. This amount appears on your year end statement. Please consult your tax advisor to determine the tax treatment of these payments.
Form 1099 OID: Original Issue Discount, reports the amortization of bond interest on discounted bonds which is taxable annually. OID is the excess of an obligations stated redemption price at maturity over its issue price. OID is taxable as interest over the life of the obligation. If you hold an OID obligation , generally you must include an amount of OID in your gross income each year you hold the obligation. Obligations that may have OID include bonds, debentures, notes, certificates and other evidence of indebtedness with terms of more than one year.
Box 1 contains the OID on obligations for the part of the year you owned it.
Report the amount in box 1 as interest income on Schedule A of your tax return.
However, depending on the type of debt instrument, the issue or acquisition
date, and other factors, you may have to figure the correct amount of OID to
report on your return. See IRS Publication 1212, Guide to Original Issue Discount
(OID) Instruments, for detains on how to figure the correct OID. Box 2 contains
other interest on OID obligations for the year, which is an amount separate
from the OID. If you held the obligation the entire year, report this amount
as interest income on Schedule A of your tax return. If you disposed of the
obligation or acquired it from another holder during the year, see IRS Publication
550 for reporting instructions. Box 3 shows interest or principal forfeited
if you withdrew the money before the maturity date of the obligation. If the
IRS has notified us that backup income tax must be withheld on interest income
in your account, this amount will be reported in Box 4. Box 6 shows OID on
a US Treasury obligation for the part of the year you owned it. Report this
amount as interest income on your federal income tax return and see IRS Publication
1212 to figure any appropriate adjustments to this amount. This OID is exempt
from state and local income taxes and is NOT included in Box 1.
Form 1099-DIV: Dividend Income, reports the total dividend payments credited to your securities account for the calendar year as "Ordinary Dividends" in Box 1a. Box 1b, "Qualified Dividends", are dividends, which are included in Box 1a that MAY be eligible for reduced dividend tax rates. IB does not determine if the payments included in Box 1B have met the requirements for the lower tax rates to apply. IB only determines that they are payments which may be eligible for the lower tax rates. Please consult your tax advisor, see the form 1040/1040A instructions ,or IRS Publication 550 to determine the appropriate status of these payments. Box 2a Total Capital Gain Distributions reports long-term capital gain distributions from mutual and exchange traded funds. Box 6, "Foreign Tax Withheld," is foreign withholding tax that has been withheld at the source related to dividends paid on American Depository Receipts (ADRs) or on foreign ordinary shares trading in the U.S. The country to which the tax was paid is listed in Box 7. If the IRS notified us that backup income tax must be withheld on dividends paid to your account, this amount will be reported in Box 4.
Dividends that were debited due to short positions are not reported to the IRS. Payments in lieu of dividend paid to you are reported on Form 1099 Misc. These amounts appear on your year end statement. Please consult your tax advisor to determine the tax treatment of these payments.
Form 1099B: Proceeds from Broker and Barter Exchange reports all proceeds received from SELL trades of securities (including short sales). This includes sell trades resulting from the exercise or assignment of stock options. The 1099B does not reflect capital gains or profit and/or loss. It is the customers responsibility to calculate gain or loss. Proceeds from option and futures trading are reported in Boxes 8 and 11. Commissions have been deducted from the trade proceeds reported on the 1099B. If back-up withholding has occurred on your account, it has been reported to you in Box 4.
Proceeds from single stock futures are not reported to the IRS. These amounts appear on your year end statement. Please consult your tax advisor to determine the tax treatment of these payments.
Form 1099 B for Futures (substitute form) Reports profit or (loss) from regulated futures contracts. This includes proceeds from options (a regulated futures contract) trading. Only the aggregate profit or (loss) is reported by IB.
Single stock futures are not considered to be regulated futures contracts and therefore transactions of these financial instruments are not included.
Form 1099-MISC: "Miscellaneous Income", reports gross fee income paid to advisors and gross commissions paid to introducing brokers in Box 7. Box 8 reports substitute payments in lieu of dividends and interest. If we were notified by the IRS that back up withholding was required on your account, tax withheld is reported in Box 4.
Form 1099-R: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., this form used to report distributions made to you from your retirement accounts, including an IRA, Roth IRA, IRA Simple, or Keogh Plan. These 1099s are issued to you directly by Principal Trust Company, the administrative manager of all IBG retirement related plans.
When will I receive my 1099 Forms?
By January 31, your 1099 Forms will be available for the immediately preceding year. We often need to correct 1099 forms as information becomes available to us we strongly recommend that you periodically check back for revisions as your prepare and finalize your tax filing.
How do I access my 1099 and 2439 Forms?
All 1099 forms, with the exception of the 1099-R and 1099-Q, are available in electronic format accessible at http://www.interactivebrokers.com under Account Management/Report Management. The 1099-R and 1099-Q, if applicable, will be sent to you directly from Principal Trust Company, the retirement account trustee, via mail. We recommend that you also print your year end statement for reference and detail of items which are not reported to the IRS, but which may be necessary to prepare your tax return.
How do I get my tax forms if I am unable to log into
my Account Management Menu?
Contact our Customer Service Department, and advise the service agent that you are not able to log into the Account Management Menu.
1. If you have your username, we will ask a series of security questions for identity verification, once the information has been verified; our customer service department will establish a temporary password in order for you to gain access.
2. If you do not have your username, we will require you to send additional information to our new accounts department in order to verify your identity. Please be advised that this process may require additional processing time to complete the verification process.
What must I do if my tax forms is not included in the
Statements and Downloads
section of my Account Management menu?
First, you must determine from which account you are missing your 1099 form. A separate 1099s are issued for Securities and Commodities accounts. Retirement account and educational savings account 1099s are sent to you by mail, if applicable. If you are missing the securities Form 1099, the futures Form 1099, , or both; verify that you sold shares of stock during the previous tax year for equities and/or verify that you bought or sold futures contracts during that same period or that you received an interest (including interest on free cash) or dividend payment in an account. Once you have reviewed your account activity from the previous tax year, and, you have determined that you should have received a 1099 for an account, please contact our customer service department with specific details of transactions, including the name of the security, number of shares/contracts, and the trade date. We will research the issue and will advise you once we have concluded our investigation.
How do the gross proceeds as reported on Form 1099B - Securities relate to
gains or losses?
Gross proceeds, alone, are not indicative of whether an overall gain or loss was realized from a securities transaction. Gross proceeds report only the sale or maturity of a capital asset, which is reportable to the IRS. The gain or loss for any given transaction is a function of the sales proceeds, the purchase price and allowable transaction costs. Please refer to IRS Publication 550 (on line at IRS.gov) for further guidance. Information relating to each of these items, on an individual transaction basis, is available from the both the monthly and annual confirmation statements located in the Statements and Downloads section of your Account Management Menu. We have formatted the monthly confirmation statements in MS Money and Quicken, or you can use an Excel Spreadsheet to help with your calculations. If you have trouble with downloading your statements, please contact the Technical Assistance Center at 1-877-442-2757, and press 4.
Interactive Brokers cannot provide any assistance in determining transaction gains or losses due to the numerous and often taxpayer specific considerations involved. Please consult with your tax advisor for guidance in this area.
What is the Realized Profit and Loss on the 1099-B
for commodities transactions?
It is the actual aggregate profit or loss recognized over the course of the year from transactions in commodity futures and regulated futures contracts which have been closed, reached final settlement or, in the case of options, expired.
Does the gross proceeds balance in the 1099-B for my securities account include
equity and index option transactions?
No. The proceeds (premium) received from the sale of put and call options are not required to be reported. However, proceeds associated with option exercises and assignments will be reflected in gross proceeds on the 1099-B. Please consult your tax professional for more information.
Does the gross proceeds balance in the 1099-B for my securities account include
Yes. Proceeds relating to the securities short sales are included regardless of whether the securities have been subsequently purchased.
Does the gross proceeds balance in the 1099-B include sale transactions which
have taken place in December, but which will not settle until January?
Yes. As proceeds are reported on a trade date basis a sale is reportable in the year it is executed not settled. In the case of bond sales which take place in December but which do not settle until the following year, the sale proceeds will be reported in the year of the trade, and accrued interest, if any, will be reported included in the following years 1099-INT, when the funds are received in your account.
What happens if I receive Form 1099-DIV, 1099 INT,
1099 OID or 1099 B that includes income that needs to be reported by other
If you receive a Form 1099 that includes income attributable to other taxpayers under other Taxpayer Identification Numbers, you will need to follow the IRS instructions for "Nominees." Please refer to the 2007 Instructions for Form 1040, U.S. Individual Income Tax Return, Schedule B, Interest and Ordinary Dividends or to IRS publication 550 , Investment Income and Expenses, for more information. IRS forms, instructions and publications can be obtained free of charge on line at www.IRS.gov or by calling the IRS at 800.829.3676 (800/TAX FORM).
What IRS form(s) do I use to report Form 1099-DIV tax information?
Generally, individual investors will need to report Form 1099-DIV information on IRS Form 1040, "U.S. Individual Income Tax Return". Depending on the type of information reported on your Form 1099-DIV, you may need to include with Form 1040 additional forms such as Schedule B, "Interest and Ordinary Dividends" and/or Schedule D, "Capital Gains and Losses" , Form 1116, "Foreign Tax Credit". All IRS forms are available free of charge on line at www.IRS.gov/formspubs or by calling the IRS at 800.829.3676 (800/TAX FORM).
Where can I find more descriptive information regarding your 1099s?
You may find more information on our website by clicking here on Tax Instructions. In addition, each tax form contains instructions provided by the IRS.
If I completed a W-8 form and I am not a legal resident
of the United States will I receive a 1099?
If you are not a U.S. citizen or legal resident, , you will not receive a 1099 form. However, you may receive Form 1042 S. Form 1042 S reports interest payments, dividends, and payment in lieu income as well as any applicable U.S. Tax withholding, thereon, from US Securities paid to foreign investors.
I've received a tax form that is incorrect. How can I get it corrected?
Inquiries regarding the accuracy of any U.S. (Form 1099, 1042 or 5498) or Canadian (Form T3, T5, T5008 or RL-3) tax form or a taxpayer identification number should be submitted via the IB Tax Correction Form available through login to Account Management and by selecting Inquiry/Problem Ticket and then Tax Correction Form. This form allows you to identify the tax forms and line items in question and provide descriptive detail as to the necessary corrections.
Why did I receive a Form 1099 for the amount that I received from a deceased/divorced
The IRS requires us to report all assets received by an individual from an account due to death or divorce. Please consult your tax advisor concerning these amounts.
Why did I receive a Form 1099-R for a distribution from my employer's retirement
plan that was rolled directly into an IRA?
This is called a direct rollover. Your employer is required to report assets leaving the employers plan on Form 1099R. Box 7 indicated the type of distribution occurred. Common distribution codes are:
1 Early Distribution, no known exception
2 Early Distribution, exception applies
7 Normal Distribution
G Direct rollover
Q Qualified distribution from a Roth IRA
T Roth IRA distribution, exception applies
The successor trustee (receiver of assets in a rollover) is required to report the contribution (receipt) of the same assets to the IRS on Form 5498.
Why did I receive a Form 1099-R for my rollover from one IRA to another IRA?
A rollover occurs when money is distributed from one tax-deferred account and deposited within 60 days to another tax deferred account. There are two types of IRA rollovers: 1) a direct rollover, which occurs when fund are transferred directly from one account to another account by the account custodians/trustees. 2) A distribution is made directly to you and within 60 days you deposit the full amount (including any taxes withheld) into a new IRA or other tax deferred account. The custodian/trustee distributing the funds will issue you a 1099R reporting the payment/transfer of funds. The code in Box 7 (listed above) indicates what type of payment was made. The custodian/ trustee receiving the IRA funds will issue a Form 5498 in May reporting the contribution to the receiving IRA account which reports to the IRS that you deposited the money into another IRA.
Why has "Taxable amount not determined" been checked in Form 1099-R,
Box 2b despite a balance being reported in Box 2a as a "Taxable amount"?
The IRS requires that we report the full amount of your IRA distribution in Box 1 (Gross distribution) In Box 2a (Taxable amount), we also report the full amount distributed unless you have directly rolled (transferred account to account) your funds to another IRA custodian/trustee. If funds are distributed directly to you we can not determine the taxable amount, since we do not know whether you have made any non-deductible (after-tax) contributions to this IRA account. Box 2b is checked to indicate that we have not determined the taxable amount Please consult your tax advisor to determine if you have made non-deductible (after-tax) contribution to your IRA account, which may lower your taxable amount.
Why have taxes been withheld from my IRA distribution, I deposited the funds
within 60 days into a new IRA/retirement account?
If you are under age 59 ½, the IRS requires to withhold taxes from IRA distributions, unless your IRA rollover is sent directly account to account. Box 4 of the 1099R reports any withheld taxes. Please note that for any tax deferred account rollover on which taxes have been withheld, the full amount (including the taxes) must be re-deposited into a tax-deferred account within 60 days for the transaction to be income tax free.
What is Form 2439?
Form 2439, Notice to Shareholder of Undistributed Long Term Capital Gains reports to owners of Regulated Investment Companies (RIC) and Real Estate Investment Trusts (REIT) undistributed capital gains allocable to them. A separate form 2439 will be issued for each investment. These forms will be issued 90 days following the fiscal year end of the RIC or REIT. Note that some RIC and REIT do not have calendar fiscal years, it is best to consult the website of the investment or your tax advisor for specific guidance in this area.
Box 1a reports total undistributed long-term capital gains attributable to your ownership of the fund, for individuals this amount is reported on your IRS Form 1040, US Individual Income Tax Return, Schedule D, Capital Gains and Losses. Box 1b is your allocable portion of the amount included in Box 1a that has been designation as unrecaptured section 1250 gain from the disposition of depreciable real property. For individuals, this amount is entered on your IRS From 1040, US Individual Income Tax Return, Schedule D, Capital Gains and Losses, worksheet. Box 2 contains any Federal Income tax paid by the RIC or REIT on this gain in your behalf.
What is Form 5498?
Form 5498,"IRA, and Coverdell ESA Contribution Information", is an information form used to report contributions and rollovers to Traditional IRAs, Roth IRAs, SEP IRAs, and SIMPLE IRAs for which Principal Trust Company is custodian. As contributions to these types of tax deferred accounts for the prior year may be made up to the tax filing deadline of April 15, the IRS has established May 31 as the deadline for providing Form 5498.
I already filed my taxes and did not include information reported on Form
1099. What do I do now?
You will have to file an amended tax return that includes the applicable information as reported on Form 1099. As the IRS verifies the information on your tax returns with the 1099s received from banks, brokers and other sources, you may receive a notice from the IRS indicating that your return was filed without the omitted information . Consult your tax or legal advisor for further information.
I already filed my taxes and have received a Corrected Form 1099. What do I do now?
You will have to file an amended tax return to report the information as reported on the corrected Form 1099. As the IRS verifies the information on your tax returns with the 1099s received from banks, brokers and other sources, you may receive a notice from the IRS indicating that your return was filed using incorrect information . Consult your tax or legal advisor for further information.
How do I contact the Internal Revenue Service (IRS)?
To request federal tax forms, call 800.829.3676 (800/TAX-FORM), or visit: http://www.irs.gov/formspubs. To ask specific questions concerning US individual tax returns call 800.829.1040. For US business return questions, call 800.829.4933.
- What is interest income?
- Is U.S. Government Interest Taxable?
- Why is U.S. Government interest reported separately on my 1099 INT?
- What is
Original Issue Discount (OID)?
What is interest income?
Interest is income earned on cash balances, bonds, notes and some preferred securities. Some distributions called dividends are actually interest and should be reported as such. Earnings on money market funds are dividends, not interest.
Is U.S. Government Interest Taxable?
Interest from U.S. Obligation such as interest on US Treasury bills, notes, and bonds issued by any agency or instrumentality of the United States is subject to federal income tax. Interest from U.S. Obligations is not subject to state or local income tax.
Interest on U.S. Treasury Bills is the difference between the discounted price you paid for the purchase of the bill and the value you received at sale or maturity. This amount should be reported as interest on your federal income tax return. Generally, all other U.S. Government obligations pay interest semi annually.
What is Original Issue Discount (OID)?
OID is the excess of an obligations stated redemption price at maturity over its issue price. OID is amortized over the life of the security, recognizing a portion of the discount annually as taxable interest.
- What are ordinary dividends?
- What are Qualified Dividends?
- How are short-term capital gains distributions from a mutual or exchange traded fund (ETF) reported?
- Where are Unrealized capital gains distributions from Regulated Investment Companies (RIC) and Real Estate Investment Trusts (REIT) reported?
- Where are my dividends/payments in lieu reported?
- What is a Return of Capital?
- How do I know if my account had a Return of Capital (ROC)?
- Why were foreign taxes withheld from my dividends?
- Should I take the foreign tax paid as a foreign tax credit or as a deduction
on my tax return?
What are ordinary dividends?
Dividends are paid by corporations, mutual funds, money market funds, and other entities such as REITs. Ordinary dividends include payments from foreign securities such as ADRs and foreign companies and net short term gains from mutual funds. Dividends that have been reinvested are also included in this amount.
What are Qualified Dividends?
Qualified Dividends are distributions which meet the criteria to be subject to a beneficial federal tax rate. In general, qualified dividends are distributions received from U.S. Domestic corporations or qualified foreign corporations where you have owned the investment for more than 61 days before or after the ex dividend date. IRS publication 550 Investment Income and Expenses available free on line at www.IRS.gov and/or your tax professional can assist in determining if your dividends are eligible for the beneficial rate.
How are short-term capital gains distributions from a mutual or exchange traded
fund (ETF) reported?
Longterm capital gain distributions from mutual and exchange traded funds are reported on your Form 1099 DIV in box 2a.
Where are Unrealized capital gains distributions
from Regulated Investment Companies (RIC) and Real Estate Investment Trusts
These gains are reported on Form 2439 in box 1a. There may be tax paid on your behalf by the RIC or REIT, this tax is reported to you on Form 2439 in box 2.
What is a Return of Capital?
A distribution paid to fund shareholders in excess of a fund's current and accumulated earnings and profits is a return of capital (ROC) distribution. A ROC distribution is generally nontaxable and reduces a shareholder's cost basis in the investment If a ROC distribution exceeds a shareholder's cost basis, then any additional amount is treated as a capital gain.
For example: A shareholder buys 1 share of Fund A for $10. In 2003, Fund A pays a $1 per share ROC distribution. The shareholder's cost basis in Fund A after the ROC distribution is $9 per share ($10 initial investment less $1 ROC distribution).
How do I know if my account had a Return of Capital (ROC)?
IB will report ROC distributions to shareholders as nontaxable distributions in Form 1099-DIV, Dividends and Distributions. Please note that this information is often not available until after the initial 1099forms are made available to you. Once the information is available IB will issue corrected 1099s to you. We suggest that you check your tax forms in Account Management Tax Forms prior to filing your return to verify that you have used up to date information.
Why were foreign taxes withheld from my dividends?
Foreign taxes are withheld on foreign stocks even though the shares are trades and were purchased on a U.S. stock exchange. They are withheld at the source (company) level and remitted to the foreign government, much like U.S. withholding taxes. U.S. taxpayers may receive a tax credit for these foreign taxes on their U.S. Tax returns. IRS Publication 514 Foreign Tax Credit for Individuals can provide more information on this topic. We also suggest that you consult your tax professional for further information on this subject.
Should I take the foreign tax paid as a foreign tax credit or as a deduction
on my tax return?
Treatment of foreign tax withheld as a foreign tax credit or as a deduction depends upon the tax situation of each shareholder. IRS Publication 514, Foreign Tax Credit for Individuals and the instructions for Schedule A Itemized deductions and Form 1116 Foreign Tax Credit provide more specific guidance. We also recommend that you consult IRS Publication 514, Foreign Tax Credit for Individuals, for additional information on this subject. Please consult your tax professional for any additional information and determination of the appropriate treatment for your tax situation.
- What is a capital gain or loss?
- What are short-term capital gains?
- What are long-term capital gains?
- What is a wash sale?
- What are the tax consequences of a wash sale?
- When will I receive My K-1 from a Publicly Traded Partnership (PTP), Royalty Trust?
What is a capital gain or loss?
Assets held for investment purposes such as stocks, options and bonds are classified by the IRS as capital assets. When such assets are sold a capital gain or loss is realized on the sale. If the capital asset is sold for a price greater than its purchase price, then a capital gain has been realized; if less, then a capital loss has been realized. In determining whether a capital gain or loss has been realized, adjustments to the purchase and sales price may be allowed to recognize certain transaction costs such as commissions and other specific adjustments.
Proper determination and recognition of capital gain and loss is important as capital gains may be subject to tax rates lower than that for other forms of income. Net capital losses are subject to annual limits. The taxation of capital gains and losses are also distinguished by the length of time the asset was held prior to sale.
IRS Publication 550 "Investment Income and Expenses" is a good source of information on this topic. It is available free on line at www.IRS.gov/formspubs. We also recommend you consult your tax professional.
What are short-term capital gains?
Short-term capital gains are capital gains earned on the sale of securities held for less than 1 year. The date a security is acquired is the trade date +1 and the date of sale is the trade date.
What are long-term capital gains?
Long-term capital gains are capital gains earned on the sale of securities held for more than 1 year. The date a security is acquired is the trade date +1 and the date of sale is the trade date. Net long-term capital gains are eligible to be taxed at favorable tax rates.
What is a wash sale?
A wash sale occurs when you sell stock or securities and, within 30 days before or after the sale, you buy acquire in a taxable exchange or acquire a contract or option to buy substantially identical stock. Commodity futures contracts are not stock or securities and are not covered by the wash sale rule, however any position of a straddle acquired after June 23, 1981 is included in these rules. See IRS Publication 550, Investment Income and Expenses, available free on line at www.IRS.gov/formspubs or consult your tax professional.
For purposes of the wash sale rule, a short sale is considered complete on the date the shore sale is entered into if on that date:
1. You own (or, on or before the date of the short sale, you entered into a contract or option to acquire) securities identical to those sold short (in any account you may own regardless of where it is located) and
2. You deliver such stock or securities to close the short sale.
What are the tax consequences of a wash sale?
Losses from wash sales are not deductible when they occur. Any unallowed loss should be added to the cost basis of the newly acquired security. The unallowed loss will be reflected in the calculation of gain or loss when these shares are sold. If you think you may have entered into a wash sale, please consult your tax professional for more information.
When will I receive My K-1 from a Publicly Traded Partnership (PTP), Royalty
K-1s are prepared and distributed by the individual partnership or trust. IB does not have access to these documents. Most PTPs and Royalty Trusts have investor contact phone lines though which you can obtain this information, additionally many have investor websites from which you can download your information.
- Why does IB withhold U. S. taxes from my dividends and substitute payments?
- Where is the tax sent?
- What is Form 1042-S?
- When will I receive my 1042 S forms?
- Can I receive a refund of tax withheld?
For general information on this topic please refer to IRS Publication 519 "U.S. Tax Guide for Aliens" available on line at www.IRS.gov/formspubs.
Why does IB withhold U. S. taxes from my dividends and substitute payments?
US Tax law requires that U.S. Tax be withheld from dividends paid by US Corporations to foreign persons at 30%. The withholding is less if the U.S. has entered into a tax treaty with your country. In most cases the treaty withholding rate on dividends is 15%, however this amount does differ. This law applies to all ordinary dividends, payments in lieu, and short-term capital gain distributions paid to foreign persons.
Investment interest income is not subject to US withholding.
What is Form 1042-S?
Form 1042-S, "Foreign Person's U.S. Source Income Subject to Withholding", is the federal information form which reports the amount of interest, dividends, payments in lieu paid to and for account managers, fees earned to the Internal Revenue Service (IRS), annually. IB may issue you one or more 1042 S forms. Each type of income is reported on a separate form using a code in Box 1. Common codes are:
01) Interest paid by U.S. obligors including the U.S. Treasury
29) Deposit Interest
30) Original issue discount (OID)
06) Dividends paid by U.S. Corporations
34) Substitute payment Dividends
35) Substitute- payment Other
50) Other Income
Box 2 indicates the amount of income credited to your account of this type, Box 5 the rate at which tax was withheld and Box 7, the amount of U.S. Tax withheld.
If the income is exempt from withholding tax a code appears in Box 6.
Can I receive a refund of tax withheld?
In general, amounts withheld for U.S. taxes are non-refundable. However, under certain circumstances, such as an incorrect rate being applied to withhold tax, a refund can be obtained. If you are an individual and file either Form 1040NR, "U.S. Nonresident Alien Income Tax Return" or 1040NR-EZ "U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents to obtain a refund. There are similar U. S. forms for trusts and corporations. IRS Publication 515 "Withholding of Tax on Non Resident Aliens and Foreign Entities" and IRS Publication 519 "U.S. Tax Guide for Aliens" available free at www.IRS.gov/formspubs provides more information on this subject.
In addition to the US Forms1042S discussed above, Residents of Canada will also receive a Form T3, T5 and T5008 by the last day in February for Canadian tax filings. Additionally residents of Québec will receive RL3 on this date. These forms are available in Account Management/Report Management/Tax Forms.
Form T3 Titled "State of Trust Income Allocations and Designations" The form details trust income allocation. Various form of Canadian source income is report in identified boxes on this form.
Form T5 - Titled "Statement of Investment Income". This form details interest and dividends. Interest from Canadian sources is in Box 13, Foreign Dividends in Box 15, and Foreign Taxes Withheld in Box 16.
Form T5008 - Titled "Statement of Securities Transactions". A separate T5008 will be provided for stocks, options, and futures. SHS (stocks), OPN (options), FUT (futures) will be specified in Box 15, the number of shares or contracts for the year in Box 16, and the gross proceeds less commissions in Box 21.
Form RL3 For Québec residents only - Reports the information on From T5 to Provincial tax authorities and is for use on residents Provincial tax returns.
- Can I open an account with Interactive Brokers UK Limited and trade all of the products your US company or website supports?
- Do I need to complete a W8 Form as a client of IBUK considering I am a non US resident?
- In the W8 form can I choose to pay my capital gain taxes in the UK or anywhere else outside of the US?
- After I complete my W8 form can I have a copy of the signed copy?
- As a resident of the UK, for my tax purposes solely, can I elect to open an account with IB US directly and bypass opening an account through IBUK?
In the W8 form can I choose to pay my capital gain taxes in the UK or anywhere else outside of the US
When you complete your W8 form you can denote that you are a UK resident and that there is a treaty between the UK and US which allows you to choose to pay your taxes in the UK by entering this information W8 form (terms and conditions apply, e.g., IB still will collect taxes on dividends and stamp duty will be collected for all London Stock Exchange share purchases in real-time).
As a resident of the UK, for my tax purposes solely, can I elect to open an account with IB US directly and bypass opening an account through IBUK?
If you are a UK resident you can only open an account with IBUK. Although, your client money will always be held by Interactive Brokers LLC, in the US.
- What is the difference between browser-based TWS and TWS standalone?
- How do I store my settings on the server and use them when I login on from another PC?
- How can I practice with the TWS?
- You advertise XXX feature, but I can’t find it in the TWS, where is it?
- How do I disable the nightly log off?
- What are the Margin Requirements for Options?
- Do you have an order type that does XXX?
- Why didn't my stop trigger in pre/ post market hours
- What types of Spread Orders are available through TWS?
- How do I create a ticker line, an Order line and modify an Order?
- How to create / modify hotkeys?
- How do I enter a Trailing Stop Order?
- Where can I find the TWS settings and log files?
- What is the difference between bundled and unbundled commissions?
- How many live market data quotes do I receive?
1. What is the difference between browser-based TWS and TWS standalone?
The difference is minimal, and is in the way it checks for updates. The browser-based TWS automatically checks for the newest version any time you launch it. Standalone TWS requires you to download the latest version from the IB website. Both TWS versions run from your PC.
2. How do I store my settings on the server and use them when I login on from
To save your settings on the server, from the TWS menu select File >Store Settings on Server. To use global settings that have been saved on the server, on the TWS Login box, check the Store settings on server. This instructs TWS to go to the global server and use any settings you saved previously.
3. How can I practice with the TWS?
IB offers a Paper Trading Account which allows traders who have an account to use the full range of IB trading facilities in a simulated environment using real market conditions. Use this test environment to:
- Use TWS features such as order types without risk.
- Learn market dynamics in new exchanges and products.
- Simulate and test trading strategies.
- Test Application Program Interface (API) applications.
4. You advertise XXX feature, but I can’t find it in the TWS, where is it?
You must enable the feature in the Feature Selector. The Trader Workstation is a powerful, feature-rich trading application with the built-in flexibility to customize your workspace environment for optimal productivity. The Feature Selector allows you to become familiar with the simplified version of the application and then add functionality as you need it. Experienced users can use the Feature Selector to hide functionality they don't need and simplify their trading environment.
6. What are the Margin Requirements for Options?
This chart shows margin requirements for options.
7. Do you have an order type that does XXX?
All order types are explained in this chart.
8. Why didn't my stop trigger in pre/ post market hours
From Global Configuration, select Order, then Order Defaults. Set the default trigger method using the Trigger Method dropdown on the Order Defaults configuration page. Check the box “Allow order to be triggered outside of regular trading hours.” You can also modify the trigger method for Stop, Stop Limit, Trailing Stop and Trailing Stop Limit orders on a per-order basis using the Order Ticket.
9. What types of Spread Orders are available through TWS?
10. How do I create a ticker line, an Order line and modify an Order?
1. Click in an empty row in the Underlying column.
2. Enter the instrument's underlying ticker symbol and press ENTER.
3. Select the instrument type from the list.
4. In the Contract Description box, select a contract and click OK. You can limit the contracts displayed in the right pane by selecting an exchange or a currency from the Filter section. Choose Smart to use SmartRouting. Hit ok
1. Click the "Ask" or "Bid" price of an asset (or use your buy or sell hot key on the selected Market Data line) to create an Order Management line directly below the selected asset.
- Click the Ask Price to create a Buy order.
- Click the Bid Price to create a Sell order.
2. On the Order Management line, modify the order parameters Time
in Force, Action, Quantity, Price, Order Type, or Destination, if needed. Set the Limit
Price to automatically update to the bid, ask, midpoint, last or closing
NOTE: To trade more efficiently, set the Quantity and Order Type defaults using the Order Defaults window.
3. To transmit your order, click the T in the status field, or click the XMIT icon on the Trading toolbar, or use your Transmit hot key or mouse shortcut.
11. How to create / modify hotkeys
You can record mouse-click shortcuts for specific order creation and transmission commands, such as buy, sell, transmit and cancel and many others
On the Configure menu, select Global Configuration, then select Hot Keys.
In the Possible Actions list, choose an action to which you want to assign
a mouse shortcut and click Create Shortcut.
In the Mouse area, use the Market Data Field drop-down to choose the field you click in to activate the shortcut.
In the Click Event drop-down, choose the click method you will use in the selected field to initiate the shortcut.
Click the customize tab to configure a trading hotkey. On this tab you can select order type, default size, limit and stop offsets, etc. You can attach a bracket, stop loss or target limit order to your order hotkey.
Click Apply, then click Close.
12. How do I enter a Trailing Stop Order?
1. Click in the Ask Price to initiate a BUY order, or the Bid Price to initiate a SELL order.
2. Click in the Type field and select TRAIL.
3. Enter values in the following fields:
a. Aux Price (Trailing Amt) field. Use the dropdown to choose Amt or %. The trailing percent is calculated off the current best bid/ask.
b. Limit Price - this value defaults to the current best bid/ask. The limit price will move with the trailing stop price based on the delta between the two prices (initial stop price - initial limit price = limit delta). If the limit price and stop price are equivalent, they will move together with a zero delta.
c. Stop Price - This field is optional. By default, the workstation calculates the initial stop price using: market price - trailing amount. You can modify the stop price, but if it is lower than the calculated value, it will be discarded when the order is submitted. Note that the value you enter may display in the Stop Price field even if it is not used.
4. To transmit the order, click
the red "T" in
the Transmit field or the Transmit icon on the trading toolbar.
13. Where can I find the TWS settings and log files?
The TWS settings file is named tws.xml and is located in a subdirectory of c:\Jts. Search (CTRL F) the c:\Jts directory for the most recently modified file.
TWS Log files are named log.<day>.txt (e.g., log.Wed.txt) and are located in the c:\Jts directory.
14. What is the difference between bundled and unbundled commissions?
Click here for information.
15. How many live market data quotes do I receive?
All customers receive 100 concurrent lines of real-time market data (which can be displayed in TWS or via the API). After the first month of trading, high-volume traders may receive additional lines of market data, calculated as follows:
Maximum ((Monthly Commissions/8), 100)
For example, if you generate USD 16.00 in monthly commissions, you will receive 100 lines of market data. If you generate USD 400.00 in commissions, you will receive 100 lines of market data. But if you generate USD 840.00 in commissions, you will receive 105 lines of market data.
Only streaming quotes are counted against your total. Tickers on pages or
windows not showing do not receive market data and are not counted against
- How much does it cost to use MobileTrader?
- What do I need to look for if I'm going to buy a new wireless device and want to access MobileTrader?
- Is MobileTrader as reliable as TWS?
- Can I send a relative order?
- How do I switch the exchange to which my order is routed?
- Do I need cookies?
- For time in force, I only see Day and GTC. Where are OPG, GTD and the others I can use in TWS?
- For time in force, I only see Day and GTC. Where are OPG, GTD and the others I can use in TWS?
Note that you will probably be billed by your service provider for internet minutes you use to access MobileTrader. These charges are outside of the control of IB. You should check with your service provider to ensure you have the most cost-effective plan to accommodate your internet usage.
What do I need to look for if I'm going to buy a new
wireless device and want to access MobileTrader?
If you want to access MobileTrader with the latest technology, you should ask if the browser on your device uses WAP 2.0, and ensure that the ISP (internet service provider) supports secure internet HTTPS (also called SSL), Port 443.
Is MobileTrader as reliable as TWS?
IB's MobileTrader technology is as reliable as the TWS technology, however mobile wireless technology is not yet as reliable as your landline-wired internet connection. You may experience more internet disconnects with your wireless device, and this could affect order transmission and executions. For these reasons, IB does not recommend using MobileTrader as a substitute for TWS.
How do I switch the exchange to which my order is routed?
MobileTrader uses IB SmartRouting whenever it is available, otherwise the order is routed direct to the primary exchange. You cannot select a destination.
Why isn't MobileTrader as full-featured as TWS?
MobileTrader is as robust as the current phase of wireless technology will allow. As wireless technology becomes more sophisticated, MobileTrader will continue to evolve in step.
Section One addresses TWS-related questions, including:
- Installing TWS and running the Beta release
- Updating the production release, logging in and using TWS
- Finding help through the Release Notes, Tutorials, the User's Guide and Customer Service
Section Two addresses other problems that may affect your TWS session, including browser, network, system and connectivity issues.
- Can I run TWS on my system?
- How do I install TWS?
- What are the minimum system requirements to run TWS?
- Will TWS run on my Macintosh PC or UNIX workstation?
- Should I use the standalone or browser-based version of TWS?
- How do I download and upgrade the Java plugin?
- What is a beta release, and how can I use it?
- How do I know what changes are in a new release?
- How will I know when a new TWS version has been released?
- How do I reinstall TWS?
- Why isn't my username recognized?
- How long does my account remain valid?
- Where do I find more information on using TWS?
- How do I contact Customer Service?
- Why does my browser either not load TWS properly, or close suddenly?
- Why do I suddenly lose my Internet connection?
- Why wont the Trade Login window or system status window come up?
- Why do I receive the message Page Not Found?"
- Why won't my login prompt show up?
- Why is my TWS flashing a magenta grid, then trying to log back in again?
- Why does it say "Logging in, Attempt 1, 2, 3 . . ."?
- Why do I only get a gray screen when I log in?
- Why does it stop on Processing Security Definition Request, or take a long time to log in?
- Why do I get a Field n Required error?
- Why does my computer shut off, or give a blue screen when I run TWS?
- After logging in, why do I only get a tan and black screen?
- How much bandwidth does TWS require?
- Does TWS use UDP?
- What types of dial-up services are available?
- What protocols and ports should my dial-up ISP allow?
- I share my internet connection, will this work?
- What types of broadband services are available?
- What protocols and ports should my Broadband ISP allow?
- Special notice with regard to Satellite Systems
- Other providers - will they work?
- What types of direct connection are there?
- Multiple network adapters can be problematic
- Quality of service has a large affect on Internet-based applications
- Trace Route
- Does IB support HTTP proxies?
- What type of proxies do you support?
- When I have a problem, how do I show you what Im seeing?
- I want to delete my cookies. Can this cause problems?
- Determine whether the problem happens on only YOUR computer
- Determine whether the problem happens with only YOUR IB account
- Determine whether the problem happens on standalone, browser-based, or both TWS versions
do I install TWS?
Find download instructions and the necessary files on the Installation Instructions page.
I use the standalone or browser-based TWS?
If you have a slower computer or Internet connection, we recommend that you use the standalone version of TWS. If you use the browser-based version, you can access TWS from any internet PC. The standalone version can only be accessed from the PC on which you installed the application. Otherwise, both require that you install the latest Java Runtime Environment and both function the same way.
do I install/upgrade the Java plugin?
Go to the Java Upgrade Instructions page and select the Windows or Mac operating system. Follow instructions for upgrading the Java plugin. Note that if you want to upgrade to a newer Java version, you must first remove the existing plugin and then reinstall the upgraded version.
is a beta release, and how can I use it?
The beta release is an pre-production version of an upcoming release that allows you to actively trade while you test new features. You must deliberately elect to use the beta at your own risk when you log in. Since the beta is under construction until production release, we welcome your input on its performance. The beta will be promoted to production after it has been tested both in-house and externally over a specified time period.
I know what changes are in a new release?
The login page includes links to both the beta and production release notes. These notes briefly describe new features and problems that have been fixed.
How will I know when
a new TWS version has been released?
If you are running the standalone version, the update wizard will automatically check for TWS updates each time you log in to your PC. You can also manually check for updates from the Start menu by selecting Programs and then Startup and clicking Check for TWS Updates. Customers running the browser-based version will always get the most recent production release when they log in.
- You are not entering the proper username (check
to be sure the Caps Lock key isn't on)
- Your account has not been set up yet
- You've entered your password incorrectly more than 10 times
can I find more information on using TWS?
Instant help resources include the TWS Release Notes, TWS User's Guide, and the online tutorials. If you still cannot find an answer to your question, contact Customer Service.
Who do I
contact for help?
IB has two distinct departments that handle specific types of TWS questions. Customer service deals with everything involving trading, accounts, funding and execution. See the Customer Service page on the IB website for contact details. The Technical Assistance Center (TAC) can help you with issues concerning your connection to IB and problems with the software involved. To help you more quickly, please:
- Call while you are experiencing the problem
- Have your computer turned on and ready to troubleshoot
- Have your account information ready
In the US, call 877-442-2757 during regular business hours for support. The following options are available:
|Account, Trading, Product or Order Information|
|Getting out of a position only.|
|Information on orders or executions|
Funds and Banking
|Funding, Balance, or Account (monetary) questions|
|Assistance with computer or software installation problems|
You can also email us at firstname.lastname@example.org. Please include the following information:
- Your username and account number
- A detailed summary of the problem
- A timeframe of when the problem occurred or occurs.
- Detailed system specifications if possible,
- the Windows version you are using
- the version of Internet Explorer or Netscape (include cipher strength)
- the brand names of any Network Interface Cards installed in the computer
- your processor generation and speed
- the amount of memory installed in your computer
- the type of Internet connection you are using
- any other troubleshooting you have done on your own or with our staff
Two - TWS-Related Issues
You may experience problems with TWS if you are running the software below the minimum requirements. When troubleshooting problems, start by making sure that your computer meets our minimum system requirements.
B) Your browser may be outdated or corrupt.
If you are using Netscape:
If you are using Internet Explorer: Check the version you are using. To check the version, on the Help menu click About.
Consult our connectivity FAQ if you suspect if this is an issue.
B. This problem has also been known to occur with problematic Ethernet cards.
Please consult our list of known compatible Network Cards.
Why wont the Trade Login window or system status window come up?
If youve installed software that prevents web window pop-ups, you will need to disable this software or allow permission for these windows to open. For more information on this topic, consult the documentation for the software that prevents pop-ups.
Why do I receive the message Page Not Found?"
This problem is typically caused by running previous versions of Internet Explorer or Netscape. You should use IE 5.5 or Netscape 4.77 with 128 bit encryption. If you have Windows 2000, encryption is part of the operating system and requires additional upgrades. In addition to the browser, you will need to do one of the following upgrades: Windows 2000 high encryption pack, or Windows 2000 Service Pack 2. Installation of either of these updates will upgrade the operating systems encryption. Microsofts upgrades can be acquired here. Netscape can be downloaded from this link.
- Remove all instances of Java and Trader Workstation.
- Follow the Java Direct-download instructions
- Download a new version of TWS.
Outdated or corrupted browsers can cause this to occur. If you are using Netscape:
If you are using Internet Explorer:
- If you are using a version lower than 6.0, upgrade
- If you're using 6.0 or higher, repair the install
Or, your browser display settings may be preventing you from viewing the entire screen.
- Using the view menu in your browser, set your font size to the smallest setting.
Your browsers cache may have a problematic page stored in it.
- Hold down the ctrl key and hit Refresh at the top of your browser. This will force the page to reload from the server.
Dial-in customers or customers with a poor connection may periodically experience problems loading an applet through a browser. Browser download and installation of applets tend to stall on slower connections.
- Using standalone TWS will bypass this problem entirely.
You may be using a problematic Ethernet card.
- Consult our list of compatible network cards to see if your card is included.
- The connection to IB is interrupted
- You are trying to log on more than once, or have duplicate login sessions. Verify that there is only one instance of either TWS or MobileTrader running for your account. If you continue to experience this problem, consult our Network FAQ.
Why does it say "Logging in, Attempt 1, 2, 3 . . ."?
This indicates that you are having a problem with the workstation getting to our servers. After it says attempt 3 press cancel. This will give you a detailed error message that you can troubleshoot below.
|Unknown Host: Java.net||This indicates a problem with DNS and your Internet Provider.|
|No Route to Host||This indicates a problem with routing to IB over the Internet, from your machine.|
|Winsock or Socket Exception||This indicates that the computer is having a problem creating an outbound socket to our server.|
|Connection Timed Out||This is a generic error you receive when a connection attempt times out in transit.|
For any of these errors, consult our Network FAQ.
- Wait. It may take several minutes to complete loading the trading pages, depending on the number of pages and symbol population on the pages and your speed of connection. Clean out ticker symbols and pages that you no longer require.
- Reconnect to the Internet
- Check your network connection for problems.
- Make sure your system has the proper minimum system requirements.
- In the case that your user preference files may have become corrupt, contact Technical Assistance for help in resetting the information.
- A corrupt Java installation will cause this to occur. To verify that this is the problem, go into the control panel and double-click on the Java plug-in. The same gray screen will result if the plug-in is corrupt. If this happens, uninstall and reinstall Java.
- Wait. It may take several minutes depending on the amount of information and speed of connection. If this is the case, clean out symbols and pages that you no longer require.
- Make sure your system has the proper minimum system requirements.
Why do I get a Field n Required error?
This indicates there is a problem with your network connection. Refer to our Network FAQ and your system Administrator to check for latency and network problems.
Why does my computer shut off, or give a blue screen when I run TWS?
This may be the result of a problematic Ethernet card, or improper driver installation of display adapters. Download the latest version of your video drivers and consult our list of compatible network cards.
With Windows XP, click Start>Control Panel.
Depending on the version of Windows you are using, its appearance may vary slightly from what we describe.
If you need to uninstall software, you should only do it from Add/Remove Programs window accessible from the Control Panel. Use this window to remove Netscape, Trader Workstation or Java, or repair Internet Explorer. When you uninstall a program, you will usually get a confirmation message ensuring that you do indeed want to remove the item that you have selected.
Note: Java does not support automatic upgrades. Before you upgrade Java, you must uninstall the current version.
Important: If you are uninstalling for reinstall purposes, Windows may ask you to restart your computer. DO NOT IGNORE THIS REQUEST. Shut down and restart your computer to allow files to be unlocked and removed from memory.
How do I download from Microsoft?
Whether youre downloading an encryption upgrade, a new browser or a service pack, all official Windows upgrades can be acquired from http://windowsupdate.microsoft.com/, shown above. Click on the products update link on the left-hand side, select the updates you wish to install, and follow the instructions.
- Go to the java.sun.com website.
- On the right side of the page under Popular Downloads, click "Java SE"
- Where it reads JDK 6 Update 5, Click on Download
- Read the license terms and conditions and click "Accept."
- Click the download link.
- In the "Save As" window, save the file to your desktop.
- Once the download is complete, return to your Desktop and double- click on the "jdk-6u5-windows-i586-p.exe" icon to install the Java plugin.
- Read the "Software License Agreement" and click "Yes" to continue.
- Choose the default destination and click "Next" to install the Java program.
- Installation is complete. You can now run the Java-based Trader Workstation 4.0.
Note: If you are running a non US-English version of Windows, you need to install the international plug-in.
How much bandwidth does TWS require?
Depending on the amount of data you are receiving (number of ticker symbols entered) most TWS sessions will function properly on a reliable 33.6 connection. However, the use of other network applications while you are using TWS may slow down your connection.
What types of dial-up services are available?
Dial-up Internet is available in two varieties: 56k dial-up (also known as a standard ISP connection) and Dial-up ISDN. The two are similar in that they use a telephone line and a modem to dial in to an Internet service provider. They are carried on different types of lines and use different types of modems. 56k dial-up is primarily used in the home, whereas 64k and 128k ISDN are commonly used in business applications. Availability of different services may be limited in certain areas; contact service providers in your area for a list of available services.
What protocols and ports should my ISP allow?
TWS connects to our servers via port 4000 using a source port in the publicly addressable space above port 1024. Our servers listen on port 4000; TWS will not function on any other port. For users behind firewalls, the installed version includes provisions for using a specified outbound port. Both inbound and outbound ports need to be permissioned for TWS to function properly.
I share my Internet connection, will this work?
TWS will function in a shared environment, provided that a reliable connection exists. The connection that a TWS machine receives must have sufficient bandwidth to operate. Users should take care when using NAT (Network Address Translation) and DHCP. While TWS will work if NAT and/or DHCP are configured properly, data loss and unpredictable behavior can result from improper configurations. For more information on NAT and DHCP, review the section below on those topics.
What types of broadband services are available?
There are many types of broadband available. Cable, xDSL, Corporate Networks (T1, T3, Frac-T), Dial-on-demand ISDN and Satellite are all broadband solutions. All of these services provide much higher throughput (compared to a dial-in line) and typically use routers or special modems to become part of a hardwired network. Some services emulate this method rather than actually performing this way. Availability of different services may be limited in certain areas; contact vendors in your area for a list of available services.
What protocols and ports should my broadband ISP allow?
As with dial-up, TWS connects to our servers via port 4000 using a source port in the publicly addressable space above port 1024. Our servers listen on port 4000; it will not function on any other port. For users behind firewalls, the installed version of TWS includes provisions for using a specified outbound port.
Special notice with regard to Satellite Systems: Testing with these systems has proved inconclusive. Some satellite providers list trading software (or anything that requires a reliable connection) as an at your own risk practice. Customer feedback has indicated that satellite services are sometimes unreliable.
How do I know if a provider I choose will work with TWS?
As with any type of connection, be sure the provider allows TCP/IP routing with open access to Internet service ports. TWS connects to our servers via port 4000 using a source port in the publicly addressable space above port 1024. Our servers listen on port 4000; it will not function on any other port. For users behind firewalls, the installed version of TWS includes provisions for using a specified outbound port.
What types of direct-connect or leased line solutions are available?
For the ultimate in reliability, speed and security, some customers choose to install a dedicated connection to our servers via leased line or frame relay interface. Please contact an IB sales representative about leased-line connections.
Services and Protocols Be aware of the protocols and network devices that may affect you. The following is information about your TWS connection that you or your Network Administrator will want to know when troubleshooting your connection to us.
- DHCP (Dynamic Host Configuration Protocol) is a way of automatically assigning IP addresses. If your DHCP server is assigning a private address (addresses which are not associated with the Internet) the server may be doing NAT (Network Address Translation) to get to the outside Internet Depending on the particular configuration, the router or server may be trapping requests from our server to your computer.
- TCP/IP is the basic protocol from an Internet service provider. This, along with DNS (Dynamic Name System) and basic socket access are all that is required for a functioning Internet connection and for running TWS software.
- NAT (Network Address Translation) is one of the basic components behind home routers (and some professional private routers). Done properly this should be transparent; the address on the outside should translate to your internal (non-Internet) addresses without your PC knowing the specifics of the routing.
- IB accepts connections on port 4000 from inbound traffic from ports 1024 or higher. This is required for connection to our servers. If you are using a firewall, these ports will need to be provided for within its configuration. Contact your network administrator for more information.
Multiple network adapters can be problematic
Extraneous network adapters and drivers which are not connected, are inoperative or unnecessary should be removed from your system. These can cause unpredictable network behavior.
- AOL and other proprietary adapters may work fine if you have the service and are actively using it. If, however you are not using the adapter, it may be configured improperly and has been known to cause connectivity issues.
- NDSWAN and other VPN adapters can be problematic if they are not in use. PPPOE (Point to Point Protocol Over Ethernet) may be used in some DSL or Cable connections; if it is not used, it may cause problems with the connection, and should be removed.
- Certain brands of ethernet cards are known to have problems with their drivers and the way they address memory. Please refer to our compatible network card list for further information.
- Client for Netware Networks and IPX/SPX are protocols used in corporate Novell Networks. If this protocol is not needed, it should be removed.
- NETBEUI is a Microsoft Protocol that, as above, may be in use in a corporate network. If it is not in use, it is better to remove this adapterImportant: If you are not sure about any of the adapters in your Network settings, consult your network administrator before removing them.
Quality of service has a large affect on Internet-based applications
Latency due to physical distance from your ISP, routing within your ISPs network, packet loss and many other factors can affect the reliable operation of your TWS. Please review the connectivity troubleshooting tips below to test the quality of your connection.
There are some basic commands that can be used from a DOS prompt to get more information on your connection to a remote host. To get to a DOS prompt, go to start and click on run. If you are using Windows 95, 98, or ME, type command. If you are using Windows NT, 2000, or XP, type cmd. Hit OK to enter the DOS window. From here, you can try the following to test your connection:
The Ping command will test the quality and latency of your connection. If it shows 4 round-trip reports without a reply (does not say not found, timed out, etc.) your connection is healthy. To use this, type ping gw1.ibllc.com at the command prompt. A healthy ping should look as follows:
Pinging gw1.ibllc.com [22.214.171.124] with 32 bytes of data:
Reply from 126.96.36.199: bytes=32 time<10ms TTL=254 Reply from 188.8.131.52: bytes=32 time<10ms TTL=254 Reply from 184.108.40.206: bytes=32 time<10ms TTL=254 Reply from 220.127.116.11: bytes=32 time<10ms TTL=254
If the ping results show excessive latency (>500ms), timeouts/packet loss, or no replies, a network problem exists between you and the IB network.
The tracert command is used to isolate routing issues. This will show you all of the hops from your connection to our network. A timeout, indicated by * or time above 200, indicates a slow or dead hop and may be a problem. Over 15 hops can also be a problem.
To look at a traceroute, type tracert gw1.ibllc.com at the command prompt.
The following are sample traceroutes. Included is an explanation and suggested course of action. This traceroute is an example of a healthy connection. The ping times and the number of hops are low (lower is better). No course of action required.
1 gatekeeper (18.104.22.168) 1 ms 1 ms 2 ms
2 jfk-edge-19.inet.qwest.net (22.214.171.124) 19 ms 26 ms 21 ms
3 jfk-core-03.inet.qwest.net (126.96.36.199) 22 ms 19 ms 24 ms
4 ewr-core-03.inet.qwest.net (188.8.131.52) 20 ms 19 ms 20 ms
5 ewr-brdr-01.inet.qwest.net (184.108.40.206) 20 ms 26 ms 19 ms
6 220.127.116.11 (18.104.22.168) 30 ms 20 ms 22 ms
7 sl-bb23-nyc-3-0.sprintlink.net (22.214.171.124) 20 ms 19 ms 19 ms
8 sl-bb22-pen-6-0.sprintlink.net (126.96.36.199) 25 ms 37 ms 21 ms
9 sl-bb26-pen-9-0.sprintlink.net (188.8.131.52) 21 ms 26 ms 22 ms
10 sl-gw26-pen-4-0-0.sprintlink.net (184.108.40.206) 24 ms 23 ms 24 ms
11 sl-thllc-4-0-0.sprintlink.net (220.127.116.11) 35 ms 31 ms 29 ms
12 18.104.22.168 (22.214.171.124) 28 ms 28 ms 30 ms
This is an example of a marginal connection. The ping times and number of hops are fairly high, but the connection should still be usable. Contact your ISP to see if this is a common occurrence. If this is what you can expect, you may want to shop around for another provider. Higher times indicate line latency (slowness) and the high (17) number of hops results in a higher potential for outage, in the event that one of the providers involved experiences a problem.
1 126.96.36.199 (188.8.131.52) 3.258 ms 2.325 ms 2.32 ms
2 athens-teiath-ATM.grnet.gr (184.108.40.206) 3.894 ms 3.546 ms 2.935 ms
3 athens-2-athens.grnet.gr (220.127.116.11) 3.299 ms 4.549 ms 13.643 ms
4 grnet1.uk1.uk.geant.net (18.104.22.168) 78.624 ms 72.213 ms 73.457 ms
5 uk.se1.se.geant.net (22.214.171.124) 104.912 ms 105.978 ms 104.695 ms
6 so-6-0-0.ar2.CPH1.gblx.net (126.96.36.199) 142.148 ms 115.03 ms 114.235 ms
7 so2-1-0-622M.cr2.CPH1.gblx.net (188.8.131.52) 113.658 ms 116.135 ms 114.903 ms
8 pos1-0-2488M.cr2.LON3.gblx.net (184.108.40.206) 134.768 ms 138.151 ms 132.05 ms
9 pos1-0-622M.br1.LON3.gblx.net (220.127.116.11) 130.876 ms 131.726 ms 134.405 ms
10 sl-bb21-lon-5-0.sprintlink.net (18.104.22.168) 132.904 ms 131.369 ms 134.111 ms
11 sl-bb20-msq-10-0.sprintlink.net (22.214.171.124) 209.434 ms 212.069 ms 209.79 ms
12 sl-bb20-nyc-11-3.sprintlink.net (126.96.36.199) 215.735 ms 208.302 ms 207.316 ms
13 sl-bb20-pen-10-0.sprintlink.net (188.8.131.52) 400.633 ms 352.33 ms 274.419 ms
14 sl-bb25-pen-8-0.sprintlink.net (184.108.40.206) 212.023 ms 215.237 ms 215.472 ms
15 sl-gw26-pen-0-0-0.sprintlink.net (220.127.116.11) 213.755 ms 212.104 ms 211.378 ms
16 sl-thllc-4-0-0.sprintlink.net (18.104.22.168) 218.742 ms 221.021 ms 217.51 ms
17 22.214.171.124 (126.96.36.199) 218.028 ms 222.549 ms 218.867 ms
The next example shows a network outage. The connection fails between hop 8 and 9. In the event that this occurs, you should contact your ISP and give them this information. These types of outages are very obvious and are the easiest for an ISP to troubleshoot.
(188.8.131.52) 0.432 ms 0.323 ms 0.357 ms
2 uninet-gw.aso.ee (184.108.40.206) 1.094 ms 7.688 ms 2.332 ms
3 220.127.116.11 (18.104.22.168) 1.489 ms 1.403 ms 1.425 ms
4 kista-atm.uninet.ee (22.214.171.124) 135.413 ms 129.594 ms 136.073 ms
5 Pos5-0.GW7.STK3.ALTER.NET (126.96.36.199) 141.723 ms 140.031 ms 122.782 ms
6 so-3-0-0.XR2.STK3.Alter.Net (188.8.131.52) 113.354 ms 98.346 ms 90.857 ms
7 ge-1-0-0.TR1.STK2.Alter.Net (184.108.40.206) 94.762 ms 115.168 ms 130.034 ms
8 so-4-0-0.IR1.DCA4.Alter.Net (220.127.116.11) 257.747 ms 288.965 ms 255.057 ms
9 request timed out * * *
timed out * * *
timed out * * *
request timed out * * *
The last example is possibly the hardest to troubleshoot and the most frustrating. The occasional timeout (marked with *s) appears several places in the traceroute. This indicates that intermittent packet loss is taking place. These types of errors are elusive and may not have been reported yet. Contact your ISP about this issue.
1 <10 ms <10 ms 10 ms 18.104.22.168
2 <10 ms 10 ms 10 ms sl-gw26-pen-5-0-1.sprintlink.net [22.214.171.124]
3 <10 ms 10 ms <10 ms sl-bb25-pen-0-7.sprintlink.net [126.96.36.199]
4 <10 ms * <10 ms sl-bb21-pen-8-0.sprintlink.net [188.8.131.52]
5 <10 ms 10 ms 10 ms sl-bb23-rly-0-0.sprintlink.net [184.108.40.206]
6 10 ms 10 ms * 220.127.116.11
7 10 ms 10 ms 10 ms sl-ameronl-14-0.sprintlink.net [18.104.22.168]
8 10 ms 10 ms 10 ms bb1-ash-P1-0.atdn.net [22.214.171.124]
9 10 ms 10 ms 10 ms bb1-dtc-P0-2.atdn.net [126.96.36.199]
10 10 ms 10 ms 10 ms pop1-dtc-P14-0.atdn.net [188.8.131.52]
11 * 10 ms 10 ms ow3-dtc-P0-0.atdn.net [184.108.40.206]
12 10 ms 10 ms 10 ms ow1-dtc-P9-2.aol.com [220.127.116.11]
13 10 ms 10 ms 10 ms www2-dr6-P0-0.aol.com [18.104.22.168]
14 * * * Request timed out.
- Launch the window that you want to capture, and press Alt + PrtScrn (Print Screen). You can't tell, but you've just captured a picture of your screen.
- Open a new MS Word document, put your cursor on the page and select "Paste."
- Name and save the file, and send it to IB Customer Service as an attachment, along with a detailed verbal description of your support issue.
I want to delete my cookies. Can this cause problems?
We do not recommend deleting cookies. Windows issues a warning before deleting cookies because of data loss that can occur. Deleting them will produce side affects and must be done at your own risk.
Restarting your computer and networking hardware will reduce the possibility that youre having a problem locally. Please shut down your computer, restart (turn off and turn back on) any router or modem (ISDN, DSL, Cable, Satellite) and turn the PC back on before contacting support about a technical issue. This is a suggested fix for most broadband providers and has been known to fix simple end-computer errors.
Does this only happen with your account?
If you have multiple Accounts, try another one of your accounts on your machine. If you dont have a second account, try using our demo system, or having a friend try their account on your machine will help to determine if there is a common issue among accounts (or systems) and where that problem may be.
- How Does IB Protect My Money?
- How Is Interactive Brokers Doing Itself, and How Does that Affect Me?
- What Other Steps Does IB Take To Protect Itself and to Protect Me?
- Why is it Important that IB and its Affiliates Only Trade Exchange-Traded and/or Centrally-Cleared Products and Dont Trade Swaps, OTC Derivatives, CDOs, Mortgage-Backed Securities and Other Exotic Products?
- How Much Exposure Does IB Have to a Single Bank? What Would Happen if a Bank Like Citibank Failed?
- Can IB Prevent Me from Withdrawing Money?
- Has IB Suffered Losses from Hedge Funds that Trade through IB and Blew Up or Could Not Meet Margin Calls? Could Hedge Funds with Accounts at IB Expose Me to Risk?
- Could IBs Market Making Affiliate, Timber Hill LLC, Suffer Big Losses and Could That Endanger My Account?
- Did Timber Hill or IB Suffer Big Losses from the Recent Decline in Bear Stearns Shares?
- Anything Else You Want to Tell Me?
How Does IB Protect My Money?
IB protects your money by following a variety of regulatory requirements and then taking a number of other steps that are well beyond the basic requirements. Here are the basics:
- First, for cash in your IB account, IB is subject to strict reserve and segregation requirements imposed by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), under which cash in IB customer accounts is kept in segregated accounts that are separate from the proprietary assets of IB and are set aside and titled exclusively for the benefit of IB customers. IB is required to perform daily (CFTC) and weekly (SEC) calculations to ensure that the proper amount of customer funds are segregated and set aside in these separate accounts.
- In order to reduce exposure to any single counterparty, these segregated customer-benefit accounts are spread across multiple large banks (at least five separate banks as of March 2008), federally-approved clearinghouses and federally-approved AAA rated money market funds -- all subject to periodic review by IBs senior management. All investments are in federally-approved, liquid investments such as top-rated federal government securities and related instruments.
- 100% of customer stock not held on margin by the customer is held in segregated depository accounts at The Depository Trust Company in the U.S. or, outside the U.S., in equivalent good control locations under SEC rules. Again, this stock is separate from the proprietary stock positions of IB or its affiliates and is separately titled and cannot be used for any purpose other than for customers, and is not subject to any liens.
- Under SEC regulations, stock that customers hold on margin can be lent to other financial institutions (for example, to facilitate short selling). These stock loans are at least 100% collateralized by cash from those institutions that is received by IB and then placed in the same segregated customer-benefit reserve accounts discussed above.
- Margin funds given to IB by customers to margin futures trades or option trades are deposited by IB in segregated customer-benefit accounts with the relevant clearinghouses (e.g., The Options Clearing Corporation or the CME Clearing House), or, for non-U.S. contracts, with an approved foreign clearinghouse or clearinghouse member. Clearinghouses eliminate direct counterparty risk in futures and options contracts by centralizing clearing and settlement of the contracts so that the clearinghouses (and not the exchange members) guarantee performance on the winning contracts. The clearinghouses are the lynchpin of the options and futures markets and are very heavily regulated and well capitalized.
- The above system of protections and checks and balances is monitored on a daily, weekly and monthly basis by IB systems and senior management. In addition, IB is audited by its own Internal Audit Department, its outside auditors Deloitte and Touche, and at least annually by the Financial Industry Regulatory Authority, Inc. (FINRA) Financial and Operations examinations staff, the National Futures Association and other self-regulatory organizations.
- Beyond all of the above, cash and securities held in IB customer securities accounts are protected by SIPC (Securities Investor Protection Corporation) coverage of up to $500,000 ($100,000 for cash) per customer. Funds that customers deposit for futures trading are not covered by SIPC, but IB addresses this by sweeping excess margin funds daily from the customers futures trading account into the customers securities account, where the funds are eligible for SIPC coverage (i.e., most or all funds that are not needed to meet current margin obligations in your IB futures account are swept into your SIPC-eligible securities account).
- In addition to the standard SIPC coverage, IB has purchased excess
SIPC coverage from Lloyds of London insurers. For customers who have
received the full SIPC protection, the Lloyds policy provides up to
an additional $29.5 million (including $900,000 for cash), subject to an
aggregate limit of $150 million across all customer accounts.
How Is Interactive Brokers Doing Itself, and How Does that Affect Me?
The comprehensive U.S. federal regulatory regime that covers securities and futures brokers (and the SIPC insurance regime that covers securities accounts) is designed so that customer assets are protected no matter what happens to the financial fortunes of the broker itself. Since customer assets are segregated and separate from the proprietary assets of the brokerage firm, customer assets are protected even if your brokerage firm itself suffers massive losses or becomes insolvent.
In any event, Interactive Brokers is in an unusually strong position in the current environment. IB is part of the Interactive Brokers Group of companies, which have an aggregate of over $3.5 billion in equity capital and an investment grade credit rating. We have been in business for over 30 years and we have specifically chosen to avoid the highly risky businesses that are causing so many problems in the markets today:
- None of the IB Group companies (including Interactive Brokers LLC and its market making affiliate Timber Hill LLC) hold any mortgage-backed securities or collateralized debt obligations (CDOs) or credit default swaps.
- IB and its affiliates do not trade over-the-counter (OTC)
derivatives or swaps or OTC options or other exotic bilateral products, which
are difficult to value and which would expose us to the credit risk of a single
bank or counterparty to the contract. Aside from trading in the foreign currency
markets for hedging and cash management purposes, all of the securities and
futures positions that IB trades for customers (or that IBs affiliate
Timber Hill trades for itself) are exchange-traded contracts for which prices
are published frequently or in real-time, whose values are marked-to-market
daily or periodically and margined accordingly, and whose performance is
guaranteed by a central clearinghouse.
What Other Steps Does IB Take To Protect Itself and to Protect Me?
In addition to segregating customer assets, providing SIPC coverage (and excess SIPC coverage from Lloyds of London insurers), maintaining a strong balance sheet and avoiding risky businesses like OTC derivatives, swaps, CDOs and mortgage-backed securities, IB has built state-of-the-art risk management procedures and systems that are based on real-time market data and marking-to-market of customer positions.
Foremost among these systems is the IB Credit Manager software. This system examines IB customer accounts continually throughout the trading day and evaluates the value of the account and also evaluates the margin requirements for the account. If an account is under its margin requirement, we generally do not allow the customer to promise to pay us in three days. Absent exceptional circumstances, an account must always have sufficient margin, or IB will liquidate the under-margined customers assets intra-day until the account is back into margin compliance. The IB Credit Manager software with this automatic liquidation feature helps to protect our customers and the capital of the firm itself because IB does not extend good faith credit to customers overnight or for one day or two days or three days. IB customers must satisfy their margin obligations up front.
The Credit Manager is critical to you as an IB customer, because it seeks to protect you from the risk inherent in the margined positions of other IB customers, whose assets and liabilities rest in the same segregated customer accounts as yours. If you are a client at another securities or futures broker that gives their clients up to three days to send in margin funds, you share the risk that your fellow clients at that firm might engage in risky trading and not satisfy a margin call, which could cause that other brokers segregated accounts to become under-margined and at risk. IBs Credit Manager and strict margin policies reduce this risk for IB customers.
Why is it Important that IB and its Affiliates Only Trade Exchange-Traded
and/or Centrally-Cleared Products and Dont Trade Swaps, OTC Derivatives,
CDOs, Mortgage-Backed Securities and Other Exotic Products?
We have always believed in limiting our business to stocks, options and futures that trade on exchanges or are cleared by a central clearinghouse like The Options Clearing Corporation or the CME Clearing House. Exchange-traded and/or centrally cleared products have certain characteristics that make them inherently less vulnerable to credit risk. First, exchanges disseminate prices throughout the day for the products that they trade, so there is, generally, continual certainty as to the pricing of such instruments. Second, the clearinghouse marks these products to market every day so that the clearinghouse and the brokers can pay or collect proper margin on the products every day. Finally, and most importantly, the clearinghouse eliminates direct counterparty risk by stepping into every trade on the exchange and guaranteeing the performance of the participants to the trade. The financial stability of the clearinghouses rests on a number of foundations, including the margin deposits they hold, their very substantial guarantee funds that are available in the event of a clearing member default, and the fact that they are heavily regulated and subject to rigorous review and examination by auditors and regulators.
The current turmoil and uncertainty in the U.S. markets originates almost entirely from over-the-counter products like mortgage-backed securities and credit default swaps that are customized, bilateral contracts that are not traded on an exchange and are not centrally cleared. IB and Timber Hill and their affiliates do not trade these products because they are often illiquid, cannot be valued or marked to market and are only as good as the banks or brokerages or underlying mortgage holders that are on the other side of the contract. The balance sheets of the banks and brokerages that have substantial holdings of these OTC products therefore are subject to great skepticism because the products cannot be valued and often cannot be traded. IB and its affiliates do not own any of these instruments on (or off) their balance sheets.
How Much Exposure Does IB Have to a Single Bank? What Would Happen if a
Bank Like Citibank Failed?
IB spreads its assets in segregated accounts for the benefit of customers across at least five of the largest banks (as of March 2008) and federally-approved AAA rated money market funds. IBs customer segregation account at Citibank is used as the conduit account for deposits and withdrawals but funds are then spread across these federally-approved depositories. Less than 10% of IB customer funds are held at Citibank as of March 2008.
It is our belief that the U.S. government would do everything in its power to prevent the failure of any of the major money-center banks with whom IB maintains deposits. In the unlikely event that such a bank did fail, and in the further unlikely event that the federal government did not arrange assistance for the bank, then IBs own, significant, proprietary capital would be required to be used to guarantee IBs obligations to our customers.
Because we value our customers money, and because we value our own money as well, we are very careful and conservative in how we distribute assets across various banks and short-term investments.
Can IB Prevent Me from Withdrawing Money?
No. A regulated brokerage firm such as IB cannot prevent you from withdrawing money from your account. Some hedge funds make their customers enter agreements that allow the hedge fund to lock up the customers investment to prevent a liquidity problem at the hedge fund. Brokerage firms are not allowed to do this (as noted above, customer funds are segregated and separate from the proprietary funds of the broker so that they are always available to the customer).
The only circumstance under which IB would delay a withdrawal from a customer account is if you fail to follow proper security procedures for a withdrawal (for example, by failing to use your security token or password that is designed to protect you from identity theft). If we have information that indicates that your account has been subject to fraud or criminality (like identity theft), we may delay processing a withdrawal for a reasonable amount of time to investigate the matter. In these cases we are typically in contact with the SEC, the CFTC or another of our regulators about the incident.
Has IB Suffered Losses from Hedge Funds that Trade through IB and Blew
Up or Could Not Meet Margin Calls? Could Hedge Funds with Accounts at IB Expose
Me to Risk?
IB has not suffered any material losses from its customers that are hedge funds.
All major brokerage firms have hedge fund clients, and IB has these clients, and values these clients greatly. IB is unique, however, in the way we manage our risk relationships with our hedge fund customers:
- Unlike some other major firms, IB does not market or sponsor or guarantee any hedge funds. There are no Interactive Brokers hedge funds and therefore IBs capital will never be used to prop-up a fund that is affiliated or sold under our name.
- Unlike other major firms, IB does not extend special credit to hedge funds via offshore credit facilities or by doing OTC derivatives trades or swaps with hedge fund customers as counterparties. All IB hedge fund customers are subject to the same federal and exchange margin requirements as our other customers.
- IB hedge fund customers are subject to the same IB Credit Manager and automatic liquidation systems as our other customers. IB does not extend good faith credit for hedge fund customers to wait three days to pay margin calls.
- Unlike some other firms, IB does not engage in Joint Back Office (or JBO) arrangements with customers, which would allow the customer to avoid customer margin requirements and trade on good faith credit.
Could IBs Market Making Affiliate, Timber Hill LLC, Suffer
Big Losses and Could That Endanger My Account?
No. Timber Hill and Interactive Brokers LLC are entirely separate broker-dealers and are each separately regulated and capitalized and examined by regulators frequently. IB customer assets are entirely separate from IBs own capital and from Timber Hills capital and trading operations.
While it is not directly relevant to the protection of IB customer assets, Timber Hill shares the same conservative management philosophy and strong access to capital that IB does. Aside from trading in the foreign currency markets for hedging and cash management purposes Timber Hill only trades exchange-traded and centrally cleared stocks, options and futures and does not trade in swaps or CDOs or other OTC products or derivatives. Timber Hill has an unparalleled record of over 30 years of conservative growth and profits.
Anything Else You Want to Tell Me?
Yes. Remember that no matter how safe and secure your assets may be at IB, you still face market risk on whatever trades you do. In other words, stocks or futures or options you buy can go up or down in value and none of the above discussion changes any of that. These are volatile and uncertain times and you would do well to protect yourself by trading in a conservative fashion.
Also, please be aware that some of the product classes that you can trade at IB are inherently not subject to the protection of a central clearinghouse (but have different protections). For example, IB offers no-load mutual funds from Vanguard. These are not traded on an exchange or a central clearinghouse but of course they are subject to a comprehensive regulatory regime. Likewise, IB allows you to trade foreign currencies. This market is by its very nature lightly regulated or unregulated and not subject to a central counterparty clearinghouse. You should take this into account in trading forex products. Finally, IB offers corporate and treasury bonds and these products may be less liquid than equity products. In addition, bonds are inherently subject to credit (repayment) risk.
Here is some other information:
- Interactive Brokers LLC is a member NYSE - FINRA - SIPC and regulated by the US Securities and Exchange Commission and the Commodity Futures Trading Commission. Headquarters: One Pickwick Plaza, Greenwich, CT 06830 USA.
- Interactive Brokers (U.K.) Limited is authorised and regulated by the Financial Services Authority. FSA register entry number 208159 (http://www.fsa.gov.uk/register/). Office: One Carey Lane, Fifth floor, London EC2 V8AE.(http://www.interactivebrokers.co.uk).
- Interactive Brokers Canada Inc. is regulated by the Investment Dealers Association of Canada (IDA) and the various Canadian securities commissions. Registered office: 1800 McGill College Avenue, Suite 2106, Montreal, Quebec, H3A 3J6, Canada. Member CIPF.
- The risk of loss in online trading of options, futures, forex, stocks, foreign equities, and bonds can be substantial. Options are not suitable for all investors. Before trading options, please read the "Characteristics and Risks of Standardized Options". Before trading futures, please read the CFTC Risk Disclosure. For a copy of either disclosure, please call +1 203 618-5800 or visit the IB website.
The above discussion is accurate as of the time it is written (March 2008). Of course we reserve the right to change our policies and procedures in the future if circumstances or our business plans change.
For Investor Relations FAQs please visit the Interactive Brokers Investor Relations website.