How is Interactive Brokers Cheaper?

F

FutsTrader111

Someone explain this to me. Everyone says IB is cheaper. I can see in certain cases they are, but mostly not in others if you trade size.

The bundled commission structure is $0.005/share. If you trade less than 2000 shares that is $10/side.

Thats fine and inline with say Ameritrade's $9.99/trade with unlimited size.

But when you get over 2000 shares, commissions get bigger:

1,000 shares = $5
2,000 shares = $10
5,000 shares = $25
10,000 shares = $50
25,000 shares = $125
50,000 shares = $250

I do lots of limit orders mostly 5000-10000 shares and I do get filled on active, high volume issues.

What benefits are there to using IB in terms of commissions if you trade over 2000 share lots?
 
Quote from Trvlwanderer:

Why would you not unbundle for the rebates?

Jeeeesh, do a little reading.
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Rebates?Where is the discussion of rebates on their website?

Under the unbundled they don't even discuss that.
 
Quote from FutsTrader111:

Rebates?Where is the discussion of rebates on their website?

Under the unbundled they don't even discuss that.
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* known as ECN fees
 
Quote from operator:

You would use the unbundle rate, it works best for you.
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So lets say I have 30,000 shares of FAZ to buy and sell. Base pricing is 0.0035 (assumes I generate less than 300K volume/month)

Then when it comes time to buy I add in 0.0018/share for NYSE exchange fees :

30,000 * 0.0053 = $159

Now when I remove liquidity commissions are (after NYSE ECN fee/rebate):

30,000 * 0.0025 = $75


Thats $234 in commissions round trip.

How is that less than $20 round trip under Ameritrade?

So what is the advantage of trading a liquid instrument under IB? I just don't see it other than if Ameritrade gives me crappy fills (which it hasn't). I get no slippage because I'm limit ordering. Even if I break up the order in 3 chunks of 10,000 thats still only $60 round trip.
 
Just run the numbers and do what works best for you.

If a trader trades 1000shs of GOOG all day long then use a per share broker.

If a trader trades 50,000 of F all day long then then use a fix ticket broker.

This is not rocket science...
 
Quote from operator:

Just run the numbers and do what works best for you.

If a trader trades 1000shs of GOOG all day long then use a per share broker.

If a trader trades 50,000 of F all day long then then use a fix ticket broker.

This is not rocket science...
More...

IB is great if you trade small size as the commissions are way less than a regular online broker. But when trading size, I don't see why anyone would want to pay 400% more on commissions.
 
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