IB Commission question

U

usman88

I daytrade crude oil on NYMEX and my daily round trips are currently around 150. I am currently using Bundled commission package and each roundtrip costs me $5.50. Thats around $825 in commissions I pay to IB each day.
I was looking around and saw that with unbundled commission package, the commission reduces by almost 50%. My question here is that what is the catch with unbundled commission? because if everything was so rosy, there would be no bundled commission package
 
With bundled commissions, you don't have to pay for taking liquidity (nor do you receive rebates for adding liquidity). Depending on the frequency and size at which you cross the spread to enter/exit positions, this could add up to more or less than the bundled rate.
 
Quote from Fractal:

With bundled commissions, you don't have to pay for taking liquidity (nor do you receive rebates for adding liquidity). Depending on the frequency and size at which you cross the spread to enter/exit positions, this could add up to more or less than the bundled rate.
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sorry didnt get you.
My guess is that what you just said relates to stock trading. I only trade futures and that too crude oil futures
 
Hi usman88,

I'm also trading CL with IB using unbundled rates, and as far as I can see there's nothing wrong with it.
Could be that unbundled is cheaper for some other underlyings.
 
Quote from Rascal2:

Hi usman88,

I'm also trading CL with IB using unbundled rates, and as far as I can see there's nothing wrong with it.
Could be that unbundled is cheaper for some other underlyings.
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what commision are you charged per round trip? and what is your daily round trip volume?
 
Quote from usman88:

what commision are you charged per round trip? and what is your daily round trip volume?
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IB is mainly my backup broker, so I don't trade very much. For the first 150 roundturns I pay $2.66 per halfturn.
 
Quote from usman88:

I daytrade crude oil on NYMEX and my daily round trips are currently around 150. I am currently using Bundled commission package and each roundtrip costs me $5.50. Thats around $825 in commissions I pay to IB each day.
I was looking around and saw that with unbundled commission package, the commission reduces by almost 50%. My question here is that what is the catch with unbundled commission? because if everything was so rosy, there would be no bundled commission package
More...

If you are daytrading there is no catch with the unbundled commission. Bundled is only better for low volume traders who hold overnight positions.

With your volume (about 3000 RT a month) you can get much better rates with other futures brokers.
 
with this much RTs you should lease a nymex seat which would cost usd 2000 a month. I dont know about exact commission savings but others here can help you out with the calculation
 
I'd change to unbundled immediately....there's no disadvantage other than an overnight charge, which if I remember correctly is $.10 per contract carried overnight. Even considering this $.10 charge if you carried something overnight, the unbundled commissions are considerably less expensive at your volume.

Later you can compare IB rates with other firms. Obviously you can find cheaper commissions. The question is whether these other firms are equal in other respects. Most are not as solid financially for example.

OldTrader
 
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