IB commission rate for equity trading

N

newdog

I have never traded stocks before and only options for which Interactive Brokers was definitely the cheapest broker.

I was going through their commission rate for equities and it seems obnoxiously high for trading even 5,000 shares at a time. On top of that they say we need to pay exchange fees etc. From their website, for <30,000 shares of trading per month, they charge 0.0035, which is $17.50 in commission. If I use TD Ameritrade, I pay only $10.00.

Am I correct in my observation?
 
newdog said:
I have never traded stocks before and only options for which Interactive Brokers was definitely the cheapest broker.

I was going through their commission rate for equities and it seems obnoxiously high for trading even 5,000 shares at a time. On top of that they say we need to pay exchange fees etc. From their website, for <30,000 shares of trading per month, they charge 0.0035, which is $17.50 in commission. If I use TD Ameritrade, I pay only $10.00.

Am I correct in my observation?
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If you are doing nothing but large market orders and only care about commissions, then some flat-commission broker like TDA would be better than IB. (Tradeking is $5/trade, if you are looking for cheap flat comms, btw). However, if you are ever providing liquidity and/or making smaller trades [i.e., the vast majority of traders], IB is cheaper by a mile.
 
newdog said:
I have never traded stocks before and only options for which Interactive Brokers was definitely the cheapest broker.

I was going through their commission rate for equities and it seems obnoxiously high for trading even 5,000 shares at a time. On top of that they say we need to pay exchange fees etc. From their website, for <30,000 shares of trading per month, they charge 0.0035, which is $17.50 in commission. If I use TD Ameritrade, I pay only $10.00.

Am I correct in my observation?
More...
Yes, if you want to place marketable orders for large numbers of shares of stock, a fixed price commission will be better for you.
 
zdreg said:
quality in this case being price improvement/price execution, which quite a few posters seem unaware of.
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Just curious, how many times have been filled at mid (for Nasdaq stocks) when submitting a marketable order at IB? For me, it's been zero times in seven years. It's a much higher number than zero when using TDA for my IRA.
 
Since IB charges by the share, maybe look for the same market condition with a higher-priced equity?

For example, if you've got about $50,000 to invest, instead of buying 5000 shares priced at $10, look for the same market condition on an equity that costs around $100/share, and buy 500. Same investment amount, but far less commission.

The trick here, of course, is finding the market condition that you want for a higher-priced stock. Otherwise, this is spot-on:
MoreLeverage said:
Yes, if you want to place marketable orders for large numbers of shares of stock, a fixed price commission will be better for you.
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zdreg said:
you, obviously, are from the school that buys the cheapest and cares nothing about quality.
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I never do market orders, it's always limit or some kind of pegged order. So, broker fee is as important as any other transaction cost.

Long while back I was an execution quant at a desk where we would buy the volume from the TD like brokers. TDs are the the feed for HFTs. If you go through these fixed price brokers, you are the feed stock for smarter players through market impact. Does TD provide you info about market impact of order through them vs other brokers? This is very important if you have high volume trades and you are executing in chunks. You might feel false euphoria about your mid spread fills for marketable orders while not realizing that when you put the order for higher percentage of ADV, you had already moved the market unfavorably.
 
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