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IB-Commissions Changes
- Thread starter Bob111
- Start date
Bob, I'm definitely concerned about the affect this could have on my P&L. I may need to re-program my software to "lock" any orders after a partial fill to prevent paying double or triple commissions. That's going to suck since I usually have the software move the remaining order closer on low-volume stocks to avoid being left with a partial position as the stock moves away.
not understanding the big deal unless you do 200 share orders and get partials. lets say you do 600 share orders and 300 get filled and 300 don't. since there's a 70 cent min for unbundled and $1 for bundled there's no difference in commissions re entering a new order. all the prop house i've been with charge on per fill but many of there min's are much less than ib
Probably not a big deal for those trading high-vol stocks. But if you're like me and trade the smaller cap, low volume stocks, you'd not find it uncommon to have a 200-share order get filled in increments of, literally, a few shares at a time. If my software modifies the order even once I'm going to get hammered with several commissions. Not the end of the world -- the .70 minimum for me is still not that much -- but over time it can add up.
Suppose you're working a 2500sh order on a fast moving stock & small partials of your orders make 50-60% of your fills. Previously all these partials would be 1 ticket at IB, and the .70 unbundled min. charge doesn't matter.
Suppose you generate enough volume that you have a blended IB tier avg commish charge of .0015 ----or have that rate elsewhere.
Is this IB's new commish structure, if at a .0015 tier?
Buy 300sh=.70, Buy 200=.70, buy 400=.70, buy 500=.75,
buy 100=.70, buy 200=.70., buy 300=.70, buy 500=.75
The 2500sh order is now filled. Cost $5.70 on this new change.
= .00228CPS commish. a 52% increase over .0015.
25,000,000 shares a month*(.00228-.0015)= $19,500 more a month.
In an increasingly fragmented and faster electronic market, small partials are the standard now.Given that SMART will route, reroute, route, reroute reflecting this fact----you're almost guaranteed these minimum charges. This seems like quite a step backwards given today's environment.
My guess is IB is sneaking in a commission hike, and trying to reduce network traffic in one fell swoop.
I believe they'll do just that, but lose some of their most important clients doing so.
Also given the stiff direct routing charges from API, you don't have much choice but to go SMART, and certainly losing some control over partials. This type of change really backs customers into a corner, and also works to the detriment of IB as well.
I certainly hope this is not the case.
Suppose you generate enough volume that you have a blended IB tier avg commish charge of .0015 ----or have that rate elsewhere.
Is this IB's new commish structure, if at a .0015 tier?
Buy 300sh=.70, Buy 200=.70, buy 400=.70, buy 500=.75,
buy 100=.70, buy 200=.70., buy 300=.70, buy 500=.75
The 2500sh order is now filled. Cost $5.70 on this new change.
= .00228CPS commish. a 52% increase over .0015.
25,000,000 shares a month*(.00228-.0015)= $19,500 more a month.
In an increasingly fragmented and faster electronic market, small partials are the standard now.Given that SMART will route, reroute, route, reroute reflecting this fact----you're almost guaranteed these minimum charges. This seems like quite a step backwards given today's environment.
My guess is IB is sneaking in a commission hike, and trying to reduce network traffic in one fell swoop.
I believe they'll do just that, but lose some of their most important clients doing so.
Also given the stiff direct routing charges from API, you don't have much choice but to go SMART, and certainly losing some control over partials. This type of change really backs customers into a corner, and also works to the detriment of IB as well.
I certainly hope this is not the case.
NBBO:
IB said:
On certain exchanges, this may have the effect of subjecting modified orders to commission minimums as if they were new orders. For example, if an order for 200 shares is submitted and 100 shares execute, then you modify the order and another 100 shares execute, a commission minimum would be applied to both 100 share orders.
In your example nothing gets modified by you so there should be no additional charge.
I assume this case would also be true - I place a limit order using Smart for 200 shares of WXYZ. Smart gets 55 shares from exchange A with 145 remaining. Smart then goes to exchange B for 100 shares, modifies the exchange A order to 45 shares and is subsequently filled. I never modified anything - IB did it all. I don't think I get hit with anything other than the normal commission.
I suspect that if I don't use Smart I get charged as I would be moving the order.
Jack
IB said:
On certain exchanges, this may have the effect of subjecting modified orders to commission minimums as if they were new orders. For example, if an order for 200 shares is submitted and 100 shares execute, then you modify the order and another 100 shares execute, a commission minimum would be applied to both 100 share orders.
In your example nothing gets modified by you so there should be no additional charge.
I assume this case would also be true - I place a limit order using Smart for 200 shares of WXYZ. Smart gets 55 shares from exchange A with 145 remaining. Smart then goes to exchange B for 100 shares, modifies the exchange A order to 45 shares and is subsequently filled. I never modified anything - IB did it all. I don't think I get hit with anything other than the normal commission.
I suspect that if I don't use Smart I get charged as I would be moving the order.
Jack
Yes, I was a bit vague on part of that description. Chasing a fast moving stock, would mean me changing the price everytime.
We then add the additional layer of SMART canceling/replacing/rerouting.
This is why I was hoping for clarification from IB exactly what is ment, rather than me assuming too much.
We then add the additional layer of SMART canceling/replacing/rerouting.
This is why I was hoping for clarification from IB exactly what is ment, rather than me assuming too much.
Quote from JackR:
NBBO:
IB said:
On certain exchanges, this may have the effect of subjecting modified orders to commission minimums as if they were new orders. For example, if an order for 200 shares is submitted and 100 shares execute, then you modify the order and another 100 shares execute, a commission minimum would be applied to both 100 share orders.
In your example nothing gets modified by you so there should be no additional charge.
I assume this case would also be true - I place a limit order using Smart for 200 shares of WXYZ. Smart gets 55 shares from exchange A with 145 remaining. Smart then goes to exchange B for 100 shares, modifies the exchange A order to 45 shares and is subsequently filled. I never modified anything - IB did it all. I don't think I get hit with anything other than the normal commission.
I suspect that if I don't use Smart I get charged as I would be moving the order.
Jack
I just did an analysis of the last 50 trades from yesterday. All small orders of 100 to 500 shares, with an average of 350 shares.
60% of the orders were filled with multiple fillls, generally 2 or 3. Assuming .7 min commission per fill and .35 for 100 shares, the cancel/replace changes would increase my commissions by 40%
60% of the orders were filled with multiple fillls, generally 2 or 3. Assuming .7 min commission per fill and .35 for 100 shares, the cancel/replace changes would increase my commissions by 40%
Quote from vikana:
I just did an analysis of the last 50 trades from yesterday. All small orders of 100 to 500 shares, with an average of 350 shares.
60% of the orders were filled with multiple fillls, generally 2 or 3. Assuming .7 min commission per fill and .35 for 100 shares, the cancel/replace changes would increase my commissions by 40%
That exactly what we talking about.
once again, can some one from IB explain,which exchanges are affected?
very simple question.
If IB is really going to do this, the least they could do is eliminate/reduce their minimum share charge.
I have to wonder why bother having commission breakpoints if the minimum share amount is going to keep overriding it?
I got a feeling I will be moving volume elsewhere as a result of this change.
IB are you trying to float a secondary next month? Why else would you try to backdoor a commission increase?
I have to wonder why bother having commission breakpoints if the minimum share amount is going to keep overriding it?
I got a feeling I will be moving volume elsewhere as a result of this change.
IB are you trying to float a secondary next month? Why else would you try to backdoor a commission increase?