Stocks Options Futures ETFs Bonds CFDs Forex

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1 Stocks Options Futures ETFs Bonds CFDs Forex Interactive Brokers Webinar: Proprietary Trading Groups Ankit Shah Institutional Sales Representative India Interactive Brokers ashah@interactivebrokers.com Tel : DISCLAIMER: This is a general overview of the Interactive Brokers Proprietary Trading Group Account (terms and conditions apply). This overview is not complete, is subject to change without notice and is aimed for professional institutional clients only. Trading in designated investments carries risks. Hence, please refer to the Interactive Brokers website /en/main.php for further details. Interactive Brokers (India) Pvt. Ltd., Member of NSE, BSE & NSDL. Regn. No. INF (F&O) ( Regn. No. NSE: INB/F/E (CM/F&O/CD); BSE: INB/F/E (CM/F&O/CD); NSDL: IN-DP-NSDL Registered Office : A-605, Dynasty Business Park, 151 Andheri Kurla Road, Andheri East, Mumbai , India. S 1

2 Interactive Brokers Strength and Security The Interactive Brokers Group has been in business for over 35 years. Currently the IB Group holds over $4 billion in owner s equity capital. The IB Group affiliates offer order routing, clearing and custody services. IB Group handles nearly one million trades per day. All of IB client s orders are automatically vetted on a pre-trade basis. IB Group does not hold CDO s, Sub Prime Debt or Credit Default Swaps. Stock lending services are available. We offer our clients access to over 90 global exchanges, whereby you can trade stocks, etfs, options, futures, bonds, CFDs, and FX. 2

3 Proprietary Trading Groups Account Profile Private/Public Sole Proprietorship Proprietary Account Registered or unregistered IMPORTANT: Within this account type, the proprietary client firm can only trade their own funds (no client funds). For Indian Proprietary Trading Groups, you can open an account for: Regulated/Unregulated Partnerships 1. A Private Limited / limited entity totrade only Indian markets. 2. A Publicly listed entity to trade Indian / overseas or both markets in a dual account structure. 3

4 We offer two account structures for proprietary firms Pool Separate Trading Limit IMPORTANT: 4 For Indian proprietary trading groups. We currently support only the pool account Structure. For offshore entities, you can choose Either the pool or STL structure.

5 Pooled Account A single trading account (with one or more users). Pool Account Multiple users can view and modify other trader s activity. 5

6 Separate Trading Limits Supervisory User Supervisory User Supervisory User Master, sub accounts and its users are part of the same legal entity. Separate Trading Limits Funds are deposited in the master account and transferred between the master and sub accounts to control individual trader limits. Initial margining is determined for each individual account, while maintenance margining is determined at a consolidated level. Master users can set trading limits on individual sub accounts based on order size and value. sub account sub account sub account 6 Note : Currently not available for Indian entities, available for overseas entities trading International markets outside of India.

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8 Exchanges and Products Online 8

9 Account Management Highlights: Our e-account Management Tool allows you to manage, set-up internal users to fund, view and authorize users. Further to view flexible e-statements and reports, update your account details. 9

10 Risk Management and Control Risk Navigator Monitor and adjust your risk profile using the IB Risk Navigator. Part of the Trader Workstation, this free real-time market risk management platform unifies exposure across multiple asset classes around the globe. NOTE: Did you know that all orders are automatically vetted on a pre-trade basis through Interactive Brokers. 10

11 Customer Activity Monitor (CAM) The IB Customer Activity Monitor (CAM) helps your firm s risk manager to quickly find and view all trade activities, including the complete order history and routing sequence. 11

12 The IB Universal Account allows you to trade multiple products around the world from a single account. You can trade shares, options, futures, forex, bonds and funds all from the same Trader Workstation screen and your transaction history and positions are all reported on a single statement. Trading around the world is easier, because you are not required to open accounts for each currency. Deposit a single currency in an account and when you want to trade a product denominated in another currency, a loan is created which is secured by your deposited currency. If you wish to eliminate the loan, you may do so at any time by trading currencies through our IB IDEAL network. Note: Indian proprietary trading groups can open a multi-currency cash account to trade international markets and a margin account to trade Indian markets. Overseas entities outside of India can open an IB Universal account to trade global markets. 12

13 Account types for Indian entities S S An Indian private limited / limited corporate can open a margin account to trade on the National Stock Exchange of India. IB offers margin funding at 13.75% per annum on the NSE. An Indian publicly listed entity can open an account to trade Indian / overseas or both markets. The overseas account is a multi-currency cash account and the Indian account is a margin account. 13

14 Multi Currency Cash account structure S An IB Cash account requires the account holder to have enough cash in the account to cover the cost of the transaction plus commissions. No shorting is allowed. The account may trade in multiple currencies, but must have the settled cash balance to enter trades. Existing cash account holders can upgrade to a multi-currency cash account through Account Management. Stocks / ETF s / Warrants: You must have enough cash in the account to cover the cost of the stock plus commissions. Shorting of stock is not allowed. Cash from the sale of stocks becomes available 3 business days after the trade date. When authorizing market, relative and VWAP orders, a 5% cash cushion is required to compensate for market movements. Futures: Day trading benefits are not supported. (50% of regular margin requirements during the day, on certain exchanges). Margin is determined on a real-time basis with immediate position liquidation if the minimum margin requirement is not met. Only cash may be used to meet variation margin requirements. Bonds: Margin requirements are computed on a realtime basis, with immediate position liquidation if the minimum maintenance margin is not met. Purchase and sale proceeds are immediately recognized. Shorting of bonds is not allowed. Single Stock Futures: This also includes the purchase and sale of stocks, exchange traded funds and narrow based index futures contracts on margin. Margin is determined on a real-time basis with immediate position liquidation if the minimum margin requirement is not met. In the US, SSFs may be cross margined with stocks and options (IRA accounts can only cross margin SSFs, not 14 stocks and options). Options: Full payment must be made for all call and put purchases. Cash accounts allow for limited purchase and sale of options as follows: Covered call writing is allowed, but the underlying stock must be available and is then restricted. Naked put writing is also allowed, but the funds must be available and then are restricted. Forex Cash from Forex transactions becomes available 2 business days following the trade date.

15 IB Smart Order Routing (Highlights) The Smartest Traders use IB SmartRouting SM. IB SmartRouting searches for the best firm stock, option, and combination prices available at the time of your order, and seeks to immediately route your order for execution electronically. Our statistics speak for themselves. Based on independent measurements, the Transaction Auditing Group, Inc., (TAG), a thirdparty provider of transaction analysis, has determined that Interactive Brokers US stock and options price executions were significantly better than the industry during 2010, and our European stock price executions were significantly better than the industry during the second half of NOTE: For additional information, see our website at 15

16 Interactive Brokers Trading Platforms to Choose From WebTrader Global electronic access with user-friendly screens Our HTML-based WebTrader is simplified trading platform. You might consider using the WebTrader if you generally trade a single product using basic order types, have to go through a firewall to access the internet, or simply prefer a straight-forward interface that provides the basics, over a complex, feature-rich platform. Remember that you can use WebTrader in the morning, log out, and use TWS in the afternoon. You are never locked into any one platform. Trader Workstation (API available) Superior technology in a feature-rich environment You may prefer using TWS if you re looking for one tool that puts everything at your fingertips. The TWS trading platform lets you trade multiple products around the world, all from the same screen. It includes many advanced trading tools, supports automated algos and sophisticated order types, and includes cutting-edge price/risk, technical, and fundamental analytics to help you plan a strategy and achieve your goals. Mobile Solutions (smart phones and ipad) On-the-go access to your IB account Whether you re always on the go or simply like to keep connected, our mobile solutions allow you to trade your IB account from most mobile devices.. The itws for iphone, BlackBerry and ipad are custom -designed for these popular models, while the generic MobileTrader supports most other Smart phones. 16

17 Every Client Account Receives a Free Paper (Demo) Trading Account Paper Trader: IB offers a paper trading account which allows traders to test the full range of IB trading facilities in a simulated environment using real market conditions. Use this test environment to: Learn TWS features without risk, including different order types Learn market dynamics in new exchanges and products. Simulate and test trading strategies Test your Application Program Interface (API) 17

18 Costs and Fees Flat Rate Cost Plus Note: Other fees may apply, check our website for a complete overview 18 -or

19 Steps to open an account Complete the Institutions Application Application review. Application review results. Fund your account. Trade! Note: This step applicable to Separate Trading Limits account, only Add sub accounts 19 Note : For Indian Proprietary Trading Groups trading on the NSE - You will be required to complete physical signatures on physical application and submission of self attested and notarized / bank attested documentation is required.

20 Stocks Options Futures ETFs Bonds CFDs Forex Ankit Shah Institutional Sales Representative India Interactive Brokers ashah@interactivebrokers.com Tel : Our Proprietary Account is a great way to meet your firms needs i.e., to trade online multi-asset classes worldwide, with one currency, from our IB Universal single account. S 20