Interactive Brokers (India)

[CougarTrader]

IBKR's platforms and API are effectively competent, advanced and stable, I won't nudge at all at the ignorable cons that you are referring to @VXP . Also their pricing is discounted enough...

facility to create pledge and to provide margin against it

very dangerous as risk gets multiplied - if got no margin, don't trade IMO... Not sustainable, please read and understand risk of ruins...

for Intraday shares trading

I consider IBKR, because I have not found a single other reliable broker who can vouch for their own systems responsibly, also it is unfair to say that, as IBKR do not provide MAS, they aren't suitable for day trading - that's outright brazen! MAS is an option only. If you got margin, who is stopping you from day trading with them.

Given their advanced platforms, they are one of the best day-trader friendly brokers worldwide. Find me a broker in India who facilitates Trading API Solutions at no extra cost. If you haven't checked yet, go and check their vast list of free APIs (not meagerly restricted to quotes only) but facilitates complex calculations and lot many other things too.

Anyways, I will give you a professional day trading tip - ability to capture realtime ATM IV is great way to gauge whether Options are pricey or cheap. Rest you know how to encash, right?

Find me a broker who facilitates all these at no extra cost, also keeping stability, accuracy & speed to utmost priority...

BTW statistically sustainable big profits are only possible through positional trades!

reaching their customer service is tough and many times you don't get proper answer

True, I agree on that. So, I prefer emails or raising tickets.

People who come from full service brokers like Kotak, Edelweiss etc will feel very frustrated.

People who come from other brokers are already frustrated! IBKR cannot make anyone more frustrated for these little things....

3. The biggest headache I am facing with them is their Reports, Statements & Contract Notes which are geared towards their US customers.

Don't be so harsh on yourself!

They send Margin statement every single day for open positions which is concise enough.
Nothing wrong with Contract Notes as well.

Their Client Portal (back-office) is super user-friendly too!

If you happen to trade multiple symbols during the day both on intraday as well as delivery basis in large quantities then you can imagine your Ledger will run into thousands of pages and you will have nightmare segregating your short term capital gains on sale of shares on delivery basis from the intraday profits/loss.

Contract notes are legal documents. On contrary the details are highly appreciated.

Why don't you export your trades to CSV and do your analysis on your own, the way you want?

Needless to mention, you can also create customized reports directly from the Client Portal.

And there are plenty full of data points for any sort of customization,

This does not end here, you can also go to "Other Reports" to find Reports specific to Indian markets, such as:

Now find me another broker in India, who makes all these customizations possible to this level of depth & accuracy at no additional cost!

In India we need to show Intraday Profits/Loss in shares trading as speculative business income

Short-term capital gain means any gain in <= 365 days of holding
Long-term capital gain means any gain in > 365 days of holding

Reporting of Intraday Shares trading is speculative and short-term only.
Reporting of F&O trading is treated as business.

Using IBKR reports, you can file your taxes. That would suffice to explain your taxation stance for your trades!

If "P&L" turnover (not transaction-wise turnover) is more than INR 2 Cr in a financial year then you need CA audit. Otherwise, basis income normal IT slabs apply... That's all...

advanced Algos known as "IBALGO" are not available to Indian customers

Before any discussion on IBALGO, you need to comprehend two different aspects of IBALGO distinctly:
1) IBKR's Smart Routing
2) Orders with User-defined Settings

What is IBKR's Smart Routing?
For that you need to consider that in EU/UK/US/Canada, Order selling/re-selling is a common practice; wherein small brokers, sub-brokers or broker affiliates sell placed orders to large brokers or agencies who in turn finally pass it on to their Exchanges. They do so to delay normal order execution by few nanoseconds to microseconds - some gain in on DOM (Depth-Of-Market) slippages, others on extra commissions for processing the orders. Hence, their exchanges do order demarcation in order to segregate who is placing which order and whose order (watch Haim Bodek speak on how HFT firms rig orders in US 24:03 - 26:43. In your free time watch the entire documentary from start for more clarity, there's interview of Thomas Peterffy as well).

IB is one of the brokers worldwide who does not propagate order selling, so, for the best interest of their EU/UK/US/Canada clients, they've brought in Smart Routing technology by which they deliver best price execution to them.

In India, we have SEBI who restricts Order selling - no broker is allowed to do so. Here under no circumstance, Exchanges have any authority to demarcate orders. Thusly, IBKR's Smart Routing is inapplicable in India. Our orders are directly routed to the Exchanges.

IBALGO is a combination of Smart Routing and orders with User-defined Settings.

Now coming to orders with User-defined Settings?
IBKR is best, stable and the "only" broker in India who facilitates various helpful plethora of Order Types | Interactive Brokers India Pvt. Ltd.
Choose whichever fits you best, and no smart-routing is required for you.

So does anyone really need IBALGO in India?
No, it is not required.
IBALGO is absolutely irrelevant for our markets. Moreover, IBALGO is more suitable for HFTs in EU/UK/US/Canada!

Indian customers who trade on NSE

Indian customers who trade on NSE with IBKR enjoys "Direct Routing".

We need not worry on OMS, because IBKR is co-located at NSE. So, your orders will get placed at the Exchange faster than any other broker, be it a new order or any order modification and with assured stability at all times.

Cheers!

P.S. BTW @VXP you missed the most important con of IBKR India that I previously mentioned in the very first post of this thread:

8) Might require learning curve of at least 30-90 days, if complete novice that might further linger depending on grasping ability. Need to learn their TWS platform which has tons of features along with all sorts of custom flexibility options (you will be challenged to break-out of your comfort zone; but once you do, you shall have beauty to behold)

 

[TracerBullet]

3. The biggest headache I am facing with them is their Reports, Statements & Contract Notes which are geared towards their US customers. If your trade for say 5000 shares gets executed in 40 tranches then their Contract Note as well as Activity Statement (Similar to Ledger) will show 40 lines for each of them. If you happen to trade multiple symbols during the day both on intraday as well as delivery basis in large quantities then you can imagine your Ledger will run into thousands of pages and you will have nightmare segregating your short term capital gains on sale of shares on delivery basis from the intraday profits/loss. Their Reports treats both of them as short term capital gains. In US intraday share trading income is treated as short term caipital gains. In India we need to show Intraday Profits/Loss in shares trading as speculative business income.

I am not doing any trades now till I can figure out how to segregate short term capital gains from intraday income? @CougarTrader, @TracerBullet Do you have any thing to say about this issue? I will appreciate if any one can guide me on this matter. Thanks in advance.

I have not traded with them for a long time, this is what i remember -

Ib has an api that gives execution details along with commissions etc. That is what i used to use, but you have to do it for each order and then sort it out. Its not so difficult to do in code. Also if i remember right, IB also shows commissions in their GUI - so you could copy off that. And i think that data was available for upto 7 days.
Since, commission info is available for each order ( atleast was in Futures), you should be able to separate but you will have to test it for your use case. Dunno about reports, as i prefer to have all data sorted out every day. IB was good in this way, with other brokers i have to parse Contract notes which is error prone and limited. And the data is aggregated and not available per order and so you have to estimate based on contract size.

 

[VXP]

CougarTrader... Thanks for your very detailed and comprehensive reply. Appreciate it. While I completely agree with you when you say that IBKR's platform and API are effectively competent, advanced and stable, I have different views with regards to certain other points made by you.

While your advice on not trading if we don't have CASH margin is well meaning and may be advisable for novice traders but for traders like me who are in the market for more than three and a half decades and who have survived and thrived during the multiple market boom and bust cycles and everything in between this advice may not be relevant. We fully understand the risks involved and how to manage them. I don't mind keeping shares with a Broker which is several times the amount of exposure availed, but keeping CASH which earns no interest only increases the cost of trading which we need to factor in while trading with IBKR.

While I started my trading when exchanges were trading on manual outcry system and physical delivery of shares, now I have reached a stage where I am trading fully mechanical and system driven strategies. At present I need to enter orders manually based on my entry and exit signals fired by my strategies. Now I want to fully automate it and my trading platform have API which integrates very well with TWS. It will obviate need for my manual order entry. This is the main reason for my opening of account with IBKR.

While I am fine with keeping CASH margin (as against shares pledged as margin) and treat the foregone interest as cost of automation, I am still trying to warp my head around their Reports and Statements to figure out how I am going to keep my accounting Income Tax compliant. As you might be aware that now IT Department requires all the financial intermediaries (IBKR included) to report all the details of every transaction done through them which is captured in their Annual Information Statement (AIS). If there is any discrepancy in what they report and what we mention in our IT Returns then we are sure to get IT Department's Notice which nobody wants. Since IBKR show intraday profits/losses as Short Term Capital Gains as against Speculative Business Income as required by Indian IT Act, I am afraid it might create problems with our IT Assessments.

You said "People who come from other brokers are already frustrated!". This is not true at least in my case. I am quite happy with their service. As I mentioned earlier only reason I opened account with IBKR is to fully automate my trading.

 

[VXP]

You mentioned that "You can also create customized reports directly from the Client Portal". I tried that option also but unfortunately I could not find a way to customize these Reports to the way I need. May be I need to dig little deeper than what I have already done.

Regarding IBALGO I understand the concept of SmartRouting etc which are not relevant in India. However it appears to me (correct me if I am wrong) that their "ICEBERG" order type is a part of IBALGO which we need if we don't want to disclose our full order quantity. Have you found any way to do that? Please enlighten me. I will appreciate any help on this.

Although they have plethora of order types which you rightly said that no one offers in India, but all their orders can only be configured with ticks or percentage. They don't have option to base our orders on ATR. Being an experienced trader yourself, you know very well that most of the professional traders base their entry and exit orders on ATR's. I am surprised that how come IBKR not providing ATR option despite having such an advanced trading platform.


P.S. How one can like a post? I am not seeing any option for that.

 

[VXP]

I have not traded with them for a long time, this is what i remember -

Ib has an api that gives execution details along with commissions etc. That is what i used to use, but you have to do it for each order and then sort it out. Its not so difficult to do in code. Also if i remember right, IB also shows commissions in their GUI - so you could copy off that. And i think that data was available for upto 7 days.
Since, commission info is available for each order ( atleast was in Futures), you should be able to separate but you will have to test it for your use case. Dunno about reports, as i prefer to have all data sorted out every day. IB was good in this way, with other brokers i have to parse Contract notes which is error prone and limited. And the data is aggregated and not available per order and so you have to estimate based on contract size.

Thanks for your reply. Do you mean to say that I need to do some sort of coding to extract the information I need? It would be very difficult for me because I don't have any programming background.

 

[TracerBullet]

Thanks for your reply. Do you mean to say that I need to do some sort of coding to extract the information I need? It would be very difficult for me because I don't have any programming background.

I have not executed on IB for long time but it was available in GUI. Looking at it today, trades tab has comm field which should have your commissions. Might be tedious but i think there was a way to see info for upto 7 days, but i dont remember how.

 

[CougarTrader]

Although they have plethora of order types which you rightly said that no one offers in India, but all their orders can only be configured with ticks or percentage. They don't have option to base our orders on ATR. Being an experienced trader yourself, you know very well that most of the professional traders base their entry and exit orders on ATR's. I am surprised that how come IBKR not providing ATR option despite having such an advanced trading platform.

You can Apply an Average True Range Indicator (interactivebrokers.co.in) then place orders at those price levels from Charts directly or any other way you prefer from TWS.

Also through APIs since one has the quotes, one can easily calculate ATR and using Trading APIs place orders programmatically at ATR level.

P.S. Do your research properly, that's all I have to say.... Enough written already .|..

 

[cloudTrader]

@CougarTrader , Do Interactive Brokers apply same Margin benefits for Option Hedged trades like Credit Spreads or Iron Fly etc. like other brokers are providing now ? Not able find anything on this topic on their website.

 

[CougarTrader]

like other brokers are providing now

Margin requirements are set by Exchanges (NSE) and regulated by SEBI.

For any position (hedged or non-hedged) margin is determined by NSE. And IBKR's RMS simply abides by that.

Do Interactive Brokers apply same Margin benefits for Option Hedged trades like Credit Spreads or Iron Fly etc.

Yes, however, no leverage applies.

(Source: https://www.interactivebrokers.co.in/en/index.php?f=24693)

And for overnight derivative positions, IBKR being a very risk-averse broker, their RMS applies about 5%-10% additional margins depending on market volatility.

For e.g. I have open hedged positions @ ~7.5L as set by NSE, now IBKR's RMS has applied additional 8%, i.e., 60K (little on the higher side as markets are jittery).

My take is that, Additional Margin actually helps in the long run, as it forces me to respect market uncertainty and provokes uncanny determination to stay disciplined.

 

[cloudTrader]

Margin requirements are set by Exchanges (NSE) and regulated by SEBI.

For any position (hedged or non-hedged) margin is determined by NSE. And IBKR's RMS simply abides by that.


Yes, however, no leverage applies.

View attachment 47013
(Source: https://www.interactivebrokers.co.in/en/index.php?f=24693)

And for overnight derivative positions, IBKR being a very risk-averse broker, their RMS applies about 5%-10% additional margins depending on market volatility.

For e.g. I have open hedged positions @ ~7.5L as set by NSE, now IBKR's RMS has applied additional 8%, i.e., 60K (little on the higher side as markets are jittery).

View attachment 47014

My take is that, Additional Margin actually helps in the long run, as it forces me to respect market uncertainty and provokes uncanny determination to stay disciplined.

Thanks for your reply. Indeed I am of the view that keeping extra Margin is a plus point. My confusion was that if we Sell a CE and Hedge it with an OTM CE then the new rules allows to take this position at a better Margin utilization. I check the Margin Calculators of different brokers and suppose we Sell 39000 CE and hedge it with 39200 CE then quite likely the Margin needed for 1 lot of such hedged position will require Rs. 26,000 Margin.

This kind of calculator I could not find on IBKR site so got confused that whether this facility will be provided by IBKR or they will block Full Margin for the Sell Position irrespective of the Buy Position.