Commissions on Options Trades

babutime · Mar 10, 2012

Quote from Appleseed:

I have traded 5 contracts PHLX for $5.80 and later 5 contracts
on BOX for $2.13 today.
with my IB account

cheers
john

Wow, such huge price discrepancy? I havent noticed that yet.

newwurldmn · Mar 11, 2012

Quote from babutime:

Wow, such huge price discrepancy? I havent noticed that yet.

I assumed he was referring to his commissions, not the premium he paid. So he's pisssed over $3 on 500 shares.

teun · Mar 11, 2012

Quote from Appleseed:

I have traded 5 contracts PHLX for $5.80 and later 5 contracts
on BOX for $2.13 today.
with my IB account

cheers
john

In both cases you must have removed liquidity. On PHLX you pay for this (not for all options btw) and on BOX you get paid for this.

teun · Mar 11, 2012

Quote from hajimow:

I put an order to cover 100 contracts of an option in my retirement account in Fidelity and then after 20 minutes I put the same order for the same option for 50 contracts and the same price in IB. After two hours, my order was partially filled in IB and then after another hours it was filled in IB but my order in Fidelity stayed opened the whole day. I thought the orders are FIFO. That is why I am hooked to IB.

So possibly the first order was not sent to an exchange (in which case nobody can see it). Or are you sure that the order was sent to an exchange?

spindr0 · Mar 11, 2012

Quote from Appleseed:

I have traded 5 contracts PHLX for $5.80 and later 5 contracts
on BOX for $2.13 today. with my IB account

Were you hitting the bid or asked or did you place a limit order on the respective orders?

spindr0 · Mar 11, 2012

Quote from StarDust9182:

In day trading they matter a lot since commissions eat up a lot of profit. In position trading they matter not a bit because saving 2 dollars a trade on say 1000 trades, is miniscule compared to the returns you had better be shooting for. They may have more impact on swing trading than position trading.

If one's focus is on getting the best bargain, I one's time should be spent on getting the best trade. You will live longer and earn more in the long run.

I think the two issues are mutually exclusive. You find the broker who provides the trading tools that you need and whose fee schedule best suits your frequency of trading. Then you concentrate on attaining your return.

2 G's is a lot to throw away.

hajimow · Mar 11, 2012

Quote from teun:

So possibly the first order was not sent to an exchange (in which case nobody can see it). Or are you sure that the order was sent to an exchange?

It was definitely sent. I saw that the bid size was increased by 100 after my order.

babutime · Mar 11, 2012

Quote from Appleseed:

I have traded 5 contracts PHLX for $5.80 and later 5 contracts
on BOX for $2.13 today.
with my IB account

cheers
john

Hey, if it was a single order executed on different exchanges, then IB's smart routing will route it so that your average still comes out to 0.70 cents a contract. In my experience, that is..

I've noticed that with some of my trades too. So for you, your 10 contracts got filled for a total of around $8. A bit more than 0.70 cents but still decent. Depends on whether you're adding or removing liquidity (like someone previously mentioned)

At least that's the impression I got from your situation..