Any Traders Leaving IB for Commission Free Broker with Desktop Platform?

[d08]

Commission free = orders are sent to a predatory POF HFT like Citadel that trades against your order to profit at the expense of the trader, they can make a few dollars to hundreds - depending on the # of shares & bid-ask spread.

Most brokers were already POF, their customer's will save - although they could save a lot more routing orders to the IEX, dark pools, or by using more complex order types.

HFTs back off when volatility spikes, making fills during adverse conditions more problematic.

The noobs will take over trading to a whole new level & the scalpers will get fills when price rolls over - they will be the ones getting scalped. Pros will not use CF orders, it would make the true cost of trading rise many fold. Limit orders are better than market, but keep in mind there is a reason why pro trades abandoned plain limit orders long ago.

It depends on the order types though. I'm curious if auction orders are supported in Lite, they all end up in the same place. It's also interesting whether Lite SMART orders and Pro SMART orders are equal or are there differences. If they are the same, then for most it will be better to switch to Lite.

 

[yogi_trader]

Commission free = orders are sent to a predatory POF HFT like Citadel that trades against your order to profit at the expense of the trader, they can make a few dollars to hundreds - depending on the # of shares & bid-ask spread.

Most brokers were already POF, their customer's will save - although they could save a lot more routing orders to the IEX, dark pools, or by using more complex order types.

HFTs back off when volatility spikes, making fills during adverse conditions more problematic.

The noobs will take over trading to a whole new level & the scalpers will get fills when price rolls over - they will be the ones getting scalped. Pros will not use CF orders, it would make the true cost of trading rise many fold. Limit orders are better than market, but keep in mind there is a reason why pro trades abandoned plain limit orders long ago.

Hi comagnum, appreciate the post. Question- Pro traders abandoned limit orders long ago- did they moved to automaton or different type of limit order, trailing stop? Thx

 

[d08]

Hi comagnum, appreciate the post. Question- Pro traders abandoned limit orders long ago- did they moved to automaton or different type of limit order, trailing stop? Thx

Sitting visible limits are useless. For myself, I split orders up (randomized time/size), route to algos, sometimes send as hidden.

 

[d08]

While I don't agree with commissions in general I justify IB's absurdly low commission as a data fee. It's cheaper and better quality than Quandl and other offerings and I can control my API. Well worth the price I pay. When you frame it like that, it's clear that a small commission in this regard is reasonable because data is expensive to store, clean, and send.

IB doesn't have "absurdly low commissions", not even close. I agree that their API is decent and their tech is good but they are not cheap.
I've paid $37k in commissions this year alone and if I can even even cut 20% off it, it's significant for me.

 

[ET180]

It's also interesting whether Lite SMART orders and Pro SMART orders are equal or are there differences.

I don't know for sure, but my interpretation of what I have seen on IBKR Lite is that since they sell the order flow, there is no user-selectable routing algorithm. I think the Lite user basically loses control over how the order is processed. For limit orders, I wouldn't care anyway as long as it gets filled.

IB doesn't have "absurdly low commissions", not even close.

Back when every other broker was charging $7 to $9 minimum per trade for a 1 lot option or 100 shares of SPY, IB had significantly lower rates. Now they are no longer the lowest cost broker. Since that's how they market themselves, I think that will eventually change or they will at least offer a "zero-commission" routing algorithm. Btw, it's rare, but I do occasionally see my orders fill with a small negative commission. I'm using tiered rates.

 

[gaussian]

IB doesn't have "absurdly low commissions", not even close. I agree that their API is decent and their tech is good but they are not cheap.
I've paid $37k in commissions this year alone and if I can even even cut 20% off it, it's significant for me.

It sounds like you need a DMA broker and not a retail. There are better places for guys swinging 1MM+ lines.

 

[damoonrulz1]

Good comments - lots to consider. I will likely try out a retail/free broker, as they are already my backup for a month. I should have noted in the original post, I only use limit orders.

 

[tonyf]

Commission free = orders are sent to a predatory POF HFT like Citadel that trades against your order to profit at the expense of the trader, they can make a few dollars to hundreds - depending on the # of shares & bid-ask spread.

Most brokers were already POF, their customer's will save - although they could save a lot more routing orders to the IEX, dark pools, or by using more complex order types.

HFTs back off when volatility spikes, making fills during adverse conditions more problematic.

The noobs will take over trading to a whole new level & the scalpers will get fills when price rolls over - they will be the ones getting scalped. Pros will not use CF orders, it would make the true cost of trading rise many fold. Limit orders are better than market, but keep in mind there is a reason why pro trades abandoned plain limit orders long ago.

but keep in mind there is a reason why pro trades abandoned plain limit orders long ago.

How do pro place trades then?

 

[qlai]

but keep in mind there is a reason why pro trades abandoned plain limit orders long ago.

How do pro place trades then?

I can't speak for him, but the way I read it is this:
Many pro/prop traders had strategies that used limit orders to manually capture the spread, rebates, etc. They had the tech and DMA that regular retail traders didn't. Those edges were automated away by HFTs(some by same pro/prop shops). So it's not that limit orders are not used/useful, rather they are just not used in strategies that require you to cancel them out quickly in manual trading. In other words, you don't want to complete with HFTs at their own game, that's all. But if you bid limit at/around support and actually want to be filled, I see no reason why not.

 

[KCalhoun]

I love IB and have traded on TWS for well over a decade. But now I like Fidelity & TD Ameritrade, since they are now zero commish and no "lite" platform restriction. I'll be sadly leaving IB unless they provide TWS & no commissh.

fwiw Fidelity's trading platform/Active Trader Pro works fine, I did 7K+ trades on it this year & only 3 hiccups. also fwiw Fidelity Active Trader customer support is spectacular, they could all answer tough routing/order mgmt questions exactly right; I've talked with dozens of reps this year in their 3 service centers via phone; best & smartest, friendly pro help.

but I'm used to TWS. cmon ib give us TWS w/0 commissh or I'm out

p.s. i spoke at length with reps from all 3 and confirmed there shouldn't be bad fills/significant slippage due to routing etc, so no worries (but i almost always (99%) use buy-stop limit & sell-stop limit orders). I've seen recent BS youtube videos by dumbass wannabe young poser gurus (who are in bed with/affiliates of commissh-charging brokers) falsely saying that zero-commissh moves by reputable big brokers means pymt for order flow will cause bad fills/slippage. bs.

I'm 100% confident to enthusiastically recommend Fidelity & TD Ameritrade as top 2 to use.