Daytrading Broker

Hello everyone,
no one answered my previous questions :(... anyway... here is another one :)

What does it mean by ECN Rebate? I talked to TV and they were charging something for the ECN (pass through)... when I talked to IB, they had no idea what I am talkign about (bundled package)... and they also said, that there is no fee other than 0.5 cent/ share.. (unless the share is less than a USD).

?????
Thanks in advance :)
 
Quote from cstfx:

You don't need 100k to have a margin account. You need only 2k to have Reg T margin. 100k refers to portfolio margin accounts.
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So what kind of leverage can I get with portfolio margining?
 
Everything anyone could possibly need to know about IB is set forth in great detail on their website, including fees. For those who haven't been around here forever, def is an exec for IB in HK and has never been known to steer anyone wrong.

IB is a great broker, provided you do not require handholding. It is designed for traders who either know what they are doing or are willing to dig it out. If you require handholding, and there is nothing wrong with that, you're better off at someplace like Schwab or Etrade.

Concerning rates, most daytraders go per share because per trade adds up when you are scaling in or out or if you don't get a complete fill. Per trade brokers have different policies regarding incomplete fills. Make sure you understand them, because the fees can add up. Some brokers, like IB unbundled and most of the prop shops offering remote retail access like Assent, pass through ECN fees. They vary but can really cut your fees if you are a liquidity provider.

Reliability and stability of the s/w platform used to be a major factor in picking brokers, but I think most of the top names are pretty comparable now. Another big factor is whether or not you require charting. IB and others, like Assent, offer fairly basic charting that is not adequate for most daytraders. You have three alternatives. You can either get a standalone charting app, like ESig, use a charting app that uses your broker data or have a second account with a broker like Schwab or TradeStation that offers a highend charting app for basically free, provided youdo a minimum number of trades.
 
Quote from T-Bone Trader:

So what kind of leverage can I get with portfolio margining?
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PM only applies to equity trading and can increase you available margining power up to 6:1. Be aware, tho, that depending on the make-up of your account, you can actually have less than 4:1 intraday that you would normally get under Reg T.
 
I am in the process of moving my accounts to IB from Tradestation due to the lower commissions, but I am having a hard time understanding why IB doesn't support unbundled API direct routing orders (which basically guarantees you much lower commissions if you get executed).
I feel a little uncomfortable NOT KNOWING what my commissions will be ahead of time.
Most people that do very large volumes are using automated strategies that require the use of the API. I am doing 2+ million shares a month with a $100K test account right now at Tradestation (I have more $$ on the sidelines after a decide the platform I will be using).
Tradestation has been a great platform for me to develop back test and simulate my strategy, but now that I know what I am doing, paying an average 0.008 per share amounts to $16K/month in commissions (..... per $100K of capital)...... THAT’S A LOT OF MONEY.
IB's unbundled commission structure SOUNDED great …!!!
0.0035 for the first 300k shares, 0.002 for up to 3M shares and 0.0025 credit for adding liquidity (all my orders are LMT orders that would add liquidity). If you do the math the commission is close to zero and if my volume increases (as I expect it to), my commissions should turn positive......
The only problem is that IB doesn't let us do that...... because:
1. Since in order to get unbundled pricing through the API your orders have to be SMART routed, as one of IBs customer support people told me (I have the transcript of the chat), "You are basically flying blind hoping for the best" regarding commissions. As other have indicated previously, a SMART routed LMT order can at the end of the day remove liquidity and instead of getting 0.0025 per share credit you pay an extra 0.0025 per share which brings your total to 0.0035+0.0025 = 0.006 per share (for the first 300K shares).
2. The only way I know to force a LMT order to wait on the bid/ask and get the liquidity credit is via a direct routed order. But IB forces you into bundled pricing for API direct-routed orders that translates to 0.005 per share, plus I am sure that they pocket the 0.0025 credit for the added liquidity that comes from the ECN so making 0.0075 per share (no matter the volume).
There are so many questions I have I don’t know where to start. I will greatly appreciate any input:
1. Are there any direct access brokers like IB that do offer unbundled pricing for direct-routing API orders
2. Why IB doesn’t offer that. What is so difficult about it? If it is not difficult are they doing it for the extra commissions generated?
3. Since IB charges the same 0.005 per share for all order types in bundled pricing why should my LTM orders subsidise someone else’s MKT orders.
4. What other people in my situation do?
5. Can someone tell me, “Don’t worry about it, 95%+ of SMART API unbundled LMT orders that were entered properly to add liquidity are executed as such”. By the way I asked the IB customer service representative about any such statistics and she told me that they don’t exist.
6. Can we really trust IB (or any broker for that matter), that when they break our order up via SMART routing or any other technology, that they give us ALL the credit for adding liquidity? Is there a way we can really check? Do we want to be involved with such a task?
7. What am I missing…….. please help.


Sincerely,
Nipapage
 
Quote from nipapage:



2. The only way I know to force a LMT order to wait on the bid/ask and get the liquidity credit is via a direct routed order. But IB forces you into bundled pricing for API direct-routed orders that translates to 0.005 per share, plus I am sure that they pocket the 0.0025 credit for the added liquidity that comes from the ECN so making 0.0075 per share (no matter the volume).

7. What am I missing…….. please help.

Sincerely,
Nipapage
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Please take the time to reread IB's commission schedule. The charges for Non-Smart Routed API orders are greater than 0.005 per share.

For Non-Smart Routed API orders:

<=500 Shares USD 0.013

>500 Shares USD 0.008

Don't waste time trying to understand why IB does things a certain way. With IB it is the IB way or go use another broker.
 
You are right. That makes it even worse.

How does IB rank so high for low commissions. Do they only consider the manually entered unbundled pricing option......

Is there a 3rd party software that can drive IBs TWS and thus generate orders automatically without going through the API......?

I have seen a few people that are working for IB, some times responding on these forums. Please help me out here and address some of my questions.

So what's the right platform for me....?
1. Low commissions
2. Automated strategy.
3. Equities only (large caps, DOW 30)
4. No fancy order types needed.
5. Some customer support transporting my strategy from Tradestation.

where do people with high volumes and automated strategies trade?

Thanks.
 
How much do you have to found exactly to be able to trade like a pattern daytrader with Interactive Brokers? I understand not to fall below 25.000 but I cant find the precise amount to found anywhere on their site..
 
How much do you have to found exactly to be able to trade like a pattern daytrader with Interactive Brokers? I understand not to fall below 25.000 but I cant find the precise amount to found anywhere on their site..
 
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