IB Are You EVER Going To Give Us Commission Details?

S

Shreddog

I think IB has had their unbundled commissions rolled out long enough that they should be able to give us detailed commission charges on all trades. Yet they do not. I find this "trust us" attitude absolutely mind-boggling for a firm that claims to be catering to the professional trader. My prop firm can do it, my friends' firms can do it, why can't you??????

This is particularly troublesome when my average commission rate has gone up about about 25% compared to the beginning of last month for a fully auto system,. And it's virtually impossible to figure out why.

IB, for every single equities trade you should be telling us:

a) whether we added or took liquidity and what the charge or rebate was
b) SEC fee
c) clearing fee
d) execution fee

If you have as big of an institutional client base as you claim to I have a hard time believing they put up with this lack of transparency.

The conspiracist in me tends to think you don't tell us because it might show some holes in your routing algorithms, perhaps some unethical routing decisions? Since there are no details, I tend to assume the worst.

Because you ding us for an API routing charge, I have to route SMART. That puts me at the mercy of your router and I have to trust that not only are you routing cost effectively but that you are charging me correctly. That's a big pill to swallow.

I'll save you the trouble of suggesting I call CS over a specific charge. I've been an IB customer for years and do 7 figure volumes each month but I will still be treated like I'm guilty until proven innocent. And I'd be forced to guess as to the incorrect charge BECAUSE I HAVE NO TRANSACTION DETAILS TO MAKE A VALID COMPLAINT ABOUT.

Instead I'll probably port the program to my prop firm. Their API isn't as good as yours but hey, money's money and it looks like they are cheaper now. What changed? BEATS ME!
 
That's a bit scary for me to read. I am in the process of switching to IB right now!

I had read through almost every single review of IB on here, and was looking forward to saving a ton on my commissions using IB.

I currently use Scottrade and pay the flat $7/trade. I typically only trade 500-1000 share lots, and often times like to do 200-500 share lots, so IB works great for my trading style.

Also, IB pays more on my money sitting there, and they charge less for margin than Scottrade.

I guess I am just hoping all is the same as the get my checks into my account.

It sure does take forever for IB to clear the funds! The check I mailed on Jan. 27th won't clear until Feb. 16th. Oh well, I just hope if I need them to send me a check it won't take a month to get it.

Peace.
 
Quote from traderich:

That's a bit scary for me to read. I am in the process of switching to IB right now!

I had read through almost every single review of IB on here, and was looking forward to saving a ton on my commissions using IB.

I currently use Scottrade and pay the flat $7/trade. I typically only trade 500-1000 share lots, and often times like to do 200-500 share lots, so IB works great for my trading style.

Also, IB pays more on my money sitting there, and they charge less for margin than Scottrade.

I guess I am just hoping all is the same as the get my checks into my account.

It sure does take forever for IB to clear the funds! The check I mailed on Jan. 27th won't clear until Feb. 16th. Oh well, I just hope if I need them to send me a check it won't take a month to get it.

Peace.
More...

Note that this rant is for unbundled commissions only. For bundled there's no grey area: .005/shr. They've been a fine broker overall, but I've hit the end of my rope on this lack of transparency.
 
Shreddog, I agree with you on this point 100%. Now, when you see a seemingly high commissions charge, you really do not know if it is due to IB's system's bug (as somebody else pointed out and confirmed), or if it is because that the SMART router was trying to re-route somewhere else with good intention but the order somehow ended up removing liquidity rather than adding liquidity, or if it is because you are the one who are calculating commissions wrong. I hope IB adds the details in its new statements as you pointed out in your post. In fact, IB will save a lot of CSR involvement by doing so.
 
traderich, at the beginning, it might be a good idea to just avoid unbundled commissions, and focus on what IB does better. Wire and ACH are lot faster than check writing at IB.

With unbundled commissions, you may get a few surprises. Here is an unbundled commissions example of a limit order (supposedly "add liquidity") of a high volume NYSE stock:

XYZ NYSE -100 -0.89 0.00 P
XYZ NYSE -100 -0.54 0.00 P
XYZ NYSE -100 -0.19 0.00 P

3 different commissions, $0.89, $0.54 and $19 were charged for 100 shares of the same stock limit order placed at the same time, sat at NYSE for the same number of minutes, executed at the same exchange (i.e. NYSE) at the same price on the same day.
 
I have always thought IB really didn't want to admit that they charged commissions. Their commissions and fees always seem quite hidden. However if you wait until sometime tomorrow you can after about 15 clicks of your mouse actually access your statement for today.

They seem to have gotten a little better in that it seems that one's account balance is corrected, that is fees and commisions have been subtracted, by around 30 minutes after the close. Better than nothing.:D
 
Roncer:

After four clicks you can view near-realtime confirmations under Report Management. Commisions always seem to be shown though I do not check every trade every day , just the day(s) when I think I have have moved to a different unbundled step.

Jack
 
I don't quite understand ShredDog.

I do > 300 trades/day...
And the execution exchange is shown for each trade...
As well as commission for each trade...
Though it is not broken down beyond that.

Specifically, why can't you reverse engineer and see where you costs have gone up?

Personally...
Since I went "unbundled" 9 months ago...
My share volume is UP 50% from 1.3 to 2.1 million shares/month...
But my cost/share has gone from $0.0032 to $0.00355...
Which is UP 10% on 50% higher volume.

But I trust that IB is simply passing on higher costs levied by the NYSE, etc

Why do I trust IB?
Because... FOR FREE... they give me interest on my short position...
From the goodness of their heart...
Which no one else would even consider giving me.
So are they then gonna cheat me on fees?

Also...
With commissions at these levels your profit margins should be well above 50%...
Meaning a 10-20% increase in fees would have a minor effect on net profit.
If your margins are < 50%...
You will have a tough time staying in business in the long run.
 
Quote from traderich:

That's a bit scary for me to read. I am in the process of switching to IB right now!

I had read through almost every single review of IB on here, and was looking forward to saving a ton on my commissions using IB.

I currently use Scottrade and pay the flat $7/trade. I typically only trade 500-1000 share lots, and often times like to do 200-500 share lots, so IB works great for my trading style.

Also, IB pays more on my money sitting there, and they charge less for margin than Scottrade.

I guess I am just hoping all is the same as the get my checks into my account.

It sure does take forever for IB to clear the funds! The check I mailed on Jan. 27th won't clear until Feb. 16th. Oh well, I just hope if I need them to send me a check it won't take a month to get it.

Peace.
More...

Just curious. You've been making some serious money. Have you been doing all this through scottrade which doesn't have level II as far as I know?
 
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