Fee with IB

Quote from luisHK:

Thanks for the info and the link.

I'm mostly doing 150 to 300K usd trades so the total cost as 0.5% would be quite high - I definetely see some serious problems sometimes with slippage but this kind of amount on high volume stocks will most of the time pass easily as a limit order.

Margin rates and the portfolio margin are definetely a plus for IB.

As of trade of european stocks with IB there is mostly a 29euros maximum commission so they apparently end up cheaper than US trades on moderate volumes. Any feed back on the reason ?
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Look at the costs at the exchange level and we need to cover them. However at those sizes you should look at unbundeld rates from IB and you'll get liquidity rebates if available from the venue/exchange which may end up giving you a net rebate on your trades. All the info is on our site under fees/unbundled. Take a look, that should be the way you should go.
 
Just wanna share another topic on my experience.

During the last 2 weeks I traded BAC for 80 trades (both enter and exit). I made a total of

Wins $5880
Lost $2160

Overall I made $3720

My Commissions on bundled with IB was $1200
(80 trades x 3000 shares per trade (comm = 0.005))

So I ended up making $3720 - $1200 = $2520

I'm thinking at the end of the year (only for these 80 trades that I made) because of the wash sale rule. I would have to pay tax on my gains which is

Gained $5880 x 35%tax = $2058

So I will be making only

$2520 - $2058 = $462 ????????????????

People tell my to consult with my Account. Which I did already.

All the commissions/tax really bothers me.

I did all the consultant with my account already.

That is i'm subject to the wash sale rule. I do make many points on my trading but this wash sale really kills me.

I'm wondering all you traders here posting your gains making $50,000 - $70,000 ytd but how about your wash sale tax???

You will all be eat up. It's really simple. I did let my accountant elect me as a MTM but i'm still not qualified as a day trader. I need to proof more another year. Well, another year is a lot for all of my money to be burned by this stupid wash sale rule!!!

For my commissions, I think I will chg from IB to another broker - a flat fee commission. Maybe MBT or OEConey which I do have a small amount of money with MBT but I don't really like their execution but have no choice. I've calculate the fees on unbundled for IB already, the exchange fees still hurts me a lot.

Anybody have any advice????????
 
Quote from def:

.... The independent audit stats from TAG show IB providing 28 cents better execution per 100 shares than the NBBO vs the industry of a -3 cents. .....
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Is a copy of this study available?
 
Quote from fishtrader:

Wins $5880
Lost $2160

Overall I made $3720

I'm thinking at the end of the year (only for these 80 trades that I made) because of the wash sale rule. I would have to pay tax on my gains which is

Gained $5880 x 35%tax = $2058

Anybody have any advice????????
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:eek: Sorry can't help you as not concerned by capital gain tax but it does look very ugly reading your post - daytrading is already difficult enough I wonder how traders deal with the wash sale rule. Hope you'll get some solutions on the forum.
 
Quote from fishtrader:

Just wanna share another topic on my experience.
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My advice is don't trade BAC for all of December (and be flat BAC for that entire length of time). Your wash sales will essentially not be wash sales anymore for your 2010 taxes. You need to read up on the details of the wash sale rule and its 30 day provision.
 
SPRSPTD

I can't stop trading the same stock for another 30 days.

I use the same strategy everyday on the same stock (BAC, RIMM)

I really wonder about other traders in here how they handle it. Because I gaurantee for sure that most of the traders do trade the same stock within +/- 30 days.

I'm pretty sure for this year 2010 that my trades are not enough to be qualified as a MTM election. But on year 2011 my trades will be enough to qualify. The thing is that, do I really have to take that wash sale rule for another year for 2011???? That really sucks.....!!!

I figured I have to make a profit ratio of at least 2:1. But 3:1 will be much more safe to really make profit after paying tax on the end of the year.

Any traders who really trade frequently, who makes a lot of money and does lose a lot of money can share what/how much you really pay tax??

Such a stupid wash sale rule. When people lose money in the market, they try to make it back to get their money back NOT TO TAKE ADVANTAGE OF THE TAX STUFF!!!
 
Quote from fishtrader:

SPRSPTD

I can't stop trading the same stock for another 30 days.

I use the same strategy everyday on the same stock (BAC, RIMM)
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Look, I understand where you are coming from, but believe me you are better off substituting two symbols to trade instead of BAC and RIMM for December. Your taxes and your life will become so much easier if you do it this way. You can defer your tax-loss taking ability *forever* if you keep daytrading the same symbols every day.

I declared mark-to-market years back and don't have to deal with this issue. But there was a time I did not have mark-to-market status and I would trade a whole different set of symbols just for the month of December to avoid the problem.
 
The commissions/fees are a totally different issue than your taxes. Don't confuse the two.

Regarding taxes, look into either electing MTM for this year or next (check out http://greencompany.com or trader's accounting for info on this).

Regarding fees you need to decide which model works best for you. If IB's pricing doesn't work for you, go elsewhere. Do what you need to do!
 
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