IB: Security Device

Q:  I have just received my IB Seurity Device in the mail.  It generates a password which is used only once.  At the IB website I read the following:

"The IB Security Device will soon be required in order to login to the Trader Workstation. API customers will be allowed to opt out of the program along with other customers under special circumstances."

I want to use the IB Security Device. Do we need a new version of Ensign? Do you have any details from IB? Are you using the device now?  Thank you for all your help.

A:  According to what I have found out, IB is sending a small (jump drive size) device to their big account customers. The device increases security and helps prevent fraud and scammers from logging into accounts and stealing money. The device interfaces with TWS and generates a one-time only password (each time that TWS runs). You must have the device in order to complete the login.

Most Ensign customers don't have to use the Security Device.  They can continue to use the Standard Username and Password approach.  If they insist on using the Security Device, then I think that they should just disable Ensign Windows from trying to Auto login with a hard coded Username and Password. They will have to manually login to TWS, then have Ensign Windows connect to TWS when it is up and running.

Feedback:

I have some good news :-) I am using the IB Security Device with Ensign Software. I have found an easy way to use the two together.

In Set-Up | Connection, I have checked the following:  (no changes to my original settings).

• Close "Accecpt Connection" window
• Beep on Connect
• Auto Run/Connect TWS
• Warn on "No Data Feed"

Here is my logon process.

1. Run Ensign Software
2. Ensign Software sends my username and password to IB
3. IB opens a new box which requests a number from the IB Security Device
4. Hit the button on the IB Security Device, and read its current value
5. Enter the value into the new box

Therefore, it is VERY easy to use the new IB Security Device with Ensign Software. If the TWS loses data connection, then  I will have to reconnect to IB.

More details below....

The IB Security Device will soon be required in order to login to the Trader Workstation.  API customers will be allowed to opt out of the program along with other customers under special circumstances.  Customers are strongly encouraged to participate in the Secure Transaction Program, but it is not required.  However, if you choose not to get an IB Security Device, please be aware of the following:

• Customers who are not signed up for an IB Security Device can only withdraw a maximum of 100,000 USD in any one day.
• Customers who are not signed up for an IB Security Device must wait 10 days to wire funds from their account after any change to the banking instructions for their account and must wait 10 days to withdraw funds by check after any change to their address information.
• Under the IB Customer Agreement, customers are responsible for all transactions initiated using their user name and password.  

Here is a press Release back in February, 2007.

Interactive Brokers Issues Security Tokens to Prevent Fraud
GREENWICH, Conn., Feb. 7 /PRNewswire/ -- To prevent any risk of fraudulent withdrawal of funds, global direct-access broker-dealer Interactive Brokers (IB) is issuing free IB identity tokens to its customers with more than $100,000 in equity.

IB, which started offering the tokens to a selected number of clients several months ago, has extended its Secure Transaction Program (STP) to more users. Customers who do not qualify for the identity token are limited to a maximum withdrawal of $100,000 per day.

"Customers with over $100,000 in equity will be offered a free IB identity token which generates single-use passwords that will be required for each and every cash withdrawal," said IB managing director Steve Sanders. "We are very mindful of security issues."

The IB Identity Token is a device small enough to fit on a keychain. It generates a new, single-use password for each IB logon for secure transactions. Because the password is valid only once, it is of no use to snoops and hackers.

Even if someone were to steal an IB customer's name and account password, it would be impossible to withdraw funds from the customer's account without the added information provided by the IB Identity Token. A further safety feature allows customers to lock the token with a Personal Identification Number (PIN) that only they know.

The STP feature is an added layer of security to IB' existing safe application and registration system where information is accessed through a Secure Socket Layer (SSL)

IB's web-accessed Trader Workstation (TWS) encrypts the customer's password to ensure that nobody can read it and log into the account. SSL provides enhanced privacy and integrity to the information customers send over the Internet.

IB, which is part of the Interactive Brokers Group, has also added a new market scanner for real-time filtering of U.S. stocks, options and indices, based on criteria selected by the user.

IB offers Universal Direct Access Trading and sophisticated trade management tools at lower cost to professional traders and investors worldwide. For online trading of stocks, options, futures, foreign exchange and bonds, IB is the faster and cheaper choice on over 50 exchanges and market centers in 14 countries.