How is Interactive Brokers Cheaper?

Quote from Steve_IB:

You're calculating it incorrectly.

30,000 Shares, IB charge you $105.

Now if you are adding liquidity to say INET, then you get a rebate of 0.0025 per share = $75. Total $105-$75 = $30. So that takes you to $60 a round trip. This is what it'll cost for the first 5 round trips.

(SNIP BECAUSE I DONT CARE AFTER THAT YOUR JUST CONFUSING THE ISSUE)
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INET? There is not even a Exchange fee listed for INET on your commission page. Where do you come up with the 0.0025/share?

Stick to FAZ on NYSE as I originally started this thread out with please. I would like for you to list out the entire calculation explicitly so I can see.

Again my calculation. Under the Unbundled Fees for less than 300,000 shares a month:

30,000 * 0.0035 = $105 IB Commission

But what about exchange fees? According to your schedule, the NYSE transaction fee is:

$0.0018 when I sell
$(-0.0010) when I buy

Buy:
30,000 * $0.0010 = -$30 + $105 = $75

Sell:
30,000 * 0.0018 = $54 + $105 = $159


Don't you pay for the $105 base fee twice (1 for buying 1 for selling)? That is, 30K shares for buying, 30K shares for selling plus ECN fees for both trades?
 
Quote from BPtrader:

My answer is as follows:

First of all, ask a simple question: Why does a broker pay you for "adding liquidity"?

Theoretically, a broker cannot care less if you "add" or "remove" liquidity, liquidity has nothing to do with a broker, a broker will be happy if it gets the commission. Then, why, why, why, does a broker so eagerly want you to "add liquidity"?

OK, the broker will say: Not me, I didn't pay a trader to "add liquidity." Then you must ask this question: who the hell cares so much that he is willing to pay me?

If someone is willing to pay you to "add liquidity," it must be good for that person, not for you. In trading, "good" means making money, this money has to come from someone.

Have you ever done target shooting? In target shooting, there are two things: a shooter and a target. When someone pays you to "add liquidity," he is making you a target. That is my definition.

Back to a broker telling you: it's good for you to "add liquidity," you will get rebate, you will make money, you will make a lot of money by "adding liquidity."

Well, I am telling you: the broker is lying to you, you have been deceived.
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BPTrader, please explain how the broker is making you a target.
 
This is BPTrader. Do you really think he knows anything about anything here?

Quote from BPtrader: (01-13-09 12:58 PM)

I plan to start trading after reading a few trading books. But I really need some advice from REAL people.

If you are a SUCCESSFUL/PROFITABLE trader, please throw me some bits of advice, any advice will be appreciated.

I am especially interested the number of years you took to become successful/profitable, because it will give me an idea of how much time I should be prepared to spend.

Thanks!
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From Newbie to expert in all things important less than 1 year. Sure.

Yes, I repeat. BPTrader, you are presented with the "Fuckwit of the Week" award. Merry Xmas.
 
Quote from kiwi_trader:

Use a limit order.
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Kiwi

I assume "adding liquidity" is a limit order onto the book.

"removing liquidity" is a market order?


Limit orders on NYSE ECN say, rebates me ($0.0010)/share on buy/sell side trades according to IB schedule.

Market orders "Remove Liquidity" at $0.0018/share have a negative impact on trader commission.
 
Quote from FutsTrader111:

Kiwi

I assume "adding liquidity" is a limit order onto the book.

"removing liquidity" is a market order?


Limit orders on NYSE ECN say, rebates me ($0.0010)/share on buy/sell side trades according to IB schedule.

Market orders "Remove Liquidity" at $0.0018/share have a negative impact on trader commission.
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FutsTrader,
Why dont you call IB tom. and have them walk you through all your scenarios. Go straight to the source and find out. Then post your results on here for us to see.
 
Quote from rmb623:

FutsTrader,
Why dont you call IB tom. and have them walk you through all your scenarios. Go straight to the source and find out. Then post your results on here for us to see.
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An IB rep did respond on this thread but with very confusing calculations. I am waiting for response on calculation of commissions on the following:

Unbundled
30,000 shares FAZ buy, 30,000 sell
NYSE ECN execution
"Adding liquidity/limit order scenario"
"Removing liquidity/market order scenario"
 
Datek was a good broker (anyone remember them? :-)
They didn't trade against their own customers, they only provided a direct access to the markets with cheap commissions.
Then Ameritrade bought them and things got bad.
Then Ameritrade was bought by TD and things got worse.
Dunno how the situation is for the last 2 years though.
 
BPTrader- We (IB) are not paying you for the liquidity. The liquidity rebate is paid to you via the exchange/ECN.



FutsTrader.
Yes, for INET the rebate is $0.0025 per share. For NYSE the rebate is only $0.001 per share. Thus, your costs would be $45 per side, i.e. $90 per roundtrip hire than what I quoted you.

For INET, sorry, we have it listed as Island on our commission page it is $0.0025 per share. NYSE-ARCA will pay you $0.0023 per share, BATS will pay you $0.0024 per share.
 
Across the pond most traders use spread bet brokers even for US futures.

Simple figures = simple calculations

Probably cheaper too
 
ECN are applying rebates to get more liquidity providers and thus mure volume on their venue. The providing rebate is also slightly < to the removing fee so that any transaction( implying a provider and a remover per se ) is generating revenue for the ECN.

What is so complicated about it?
 
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