IB seems to have a policy that trading in an IRA account has to have settled cash before a buy order can be placed. So, when I am making trades in an IRA account…sell enough shares to cover what I want to buy, the orders are being rejected until the sell side trades settle. I thought that as long as there will be enough cash on settlement date that it was ok to place buy orders. Always worked with Schwab.
Does anyone else see the same problem?
Larry
Is your account enabled to buy on margin?
Bummer. Vanguard notifies me that I am buying a stock using unsettled funds but they still allow me to do it. I just cannot sell the same stock before the funds have settled. (this violates an SEC rule plus Vanguard does not like to act as a bank). it looks like IB is not allowing you to ‘borrow’ their money, however. You need to have a reserve cash account to draw from to buy your stock. How long is the settlement timeframe? Vanguard is 3 business days.
You need a margin IRA account. They will not let you exceed the total port value but you will not have to wait 3 days to reuse the cash
Change your account to a margin account. I changed my IB IRA account to a margin account a while ago - solved the problem you are describing. Not really using margin if funds are available but unsettled.
Thanks. I’ll see about changing it to a margin account.
Larry
I have a similar issue with my IRA margin account at IB, where I submitted buy and sell orders to rebalance this morning. Almost all the buys were rejected.
When I called IB, they said that because I used VWAP (best efforts) orders, the system rejected them because it doesn’t know if the funds would be available. So I’d have to first get fills on my sells before submitting my buy orders? Would using guaranteed VWAP orders on my sells work? Or would I have to stagger in the orders, or use market on open orders on sells?
You can log in to Account Management and take care of this.
http://ibkb.interactivebrokers.com/node/280
Tom C
Seems to me you are going to have to execute the sale before submitting the buys, no matter what order type you’re using. Otherwise you could potentially have negative cash, which is not allowed in an IB IRA account (settled or unsettled) as I understand it.
Tom C
That’s too bad. Certainly it makes rebalancing a little bit trickier. I just switched from Folio, where this was not a problem at all.
And it makes autotrading difficult, if not impossible, for IRA accounts at IB, unless the orders are staggered. Perhaps a combination of market on open (for sells) followed by VWAP orders for buys would work. Or some type of limit order, where the total cash outlays are known. I’ll have to test it out.
Yes, the Folio Window functionality is much more practical for rotation type systems – since you put in a dollar amount, it peeks at the price and can adjust the share amount. Plus for practical purposes, there is usually at least a little bit of cash in the account that helps buffer. And as a practical matter, there are very few times a window order is not executed (although it is possible). And whatever algo Folio is using to buy and sell I have found to be very good.
That said, IB is the absolute best for high daily turnover type trading, when managing slots and cash are not an issue.
Tom C