IB commissions for low priced stocks

Quote from Bitstream:

it's a good option if they lower commissions :D

in thier website commissions are promoted as max .1% of the stock price...but it is obvious it aint the case; wonder if ib reps think it would be a good thing to lower 'em to an acceptable standard, afterall they got everythin' to gain since i would at least ten-twentyfold my trades on low priced stocks... considerin' also that stocks priced at $1 are impossible to trade with this structure [u are down 2% off the bat due to spread and commish] it is all lost biz imo.
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some simple math:

1000 shares *$1* .002 (.2% is the max commish) = $2

1000*.01 (1 tick) = $10

You state: it is impossible to trade with this structure.

I state: Buy and sell for 1 tick -> earn $10 - cost of $4 = net of $6.

I ask: why is this impossible?
 
Quote from def:

some simple math:

1000 shares *$1* .002 (.2% is the max commish) = $2

1000*.01 (1 tick) = $10

You state: it is impossible to trade with this structure.

I state: Buy and sell for 1 tick -> earn $10 - cost of $4 = net of $6.

I ask: why is this impossible?
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never touched stocks priced @1 yet, so u might be right there but on those priced at $3, commish for example on a 1k shares is $10 r/t.
 
Quote from Bitstream:

never touched stocks priced @1 yet, so u might be right there but on those priced at $3, commish for example on a 1k shares is $10 r/t.
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Looks like break even on 1 tick. You're shooting for more than a tick, though... right?
 
Quote from ddunbar:

Looks like break even on 1 tick. You're shooting for more than a tick, though... right?
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i shoot for much more otherwise it ain't worth it, but i've been proven wrong over and over and costs are killin' me...u break even on 2ticks--u gotta go past spread and commish.
 
Good question about commish. I look at these trades differently than bitstream, however. To me, the relevant numbers are how much profit. That is what is going to cover the commish. If a low priced stock is in the news or whatever and looks like it has a dollar or so range on it, then what makes the diff whether it is a forty dollar stock or a three dollar stock? You are still looking for a fifteen cent or more pop whether it is a low price stock or a thirty dollar stock. How much of the profit is eaten by commish is the relevant number, not how much of the investment. Low priced is a plus because it allows you to buy more.

Of course, playing around with a low priced stock for a few cents does not work with these commissions, and is best left to the swift boys, who have commish rates designed to benefit from those moves.
 
Quote from sprstpd:

Have two accounts, one at IB and one where you get a better deal for lower priced stocks.
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ja, u are right and that proves my point ib has everythin' to lose by keepin' those commish so high.
 
Quote from Trader_Herry:

Which firm then?

What's the price?
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Anyplace that gives you a fixed price for a limit order, unlimited shares. For example, TD Ameritrade:

http://www.tdameritrade.com/pricing.html

The breakeven commission point (not including SEC fees) would be about $5,000 worth of stock traded. At IB:

$5,000 * 0.002 = $10

So supposing you trade a $2 stock, you can trade 2,500 shares of it at IB and be at the $10 commission mark. If you trade 10,000 shares at IB you would be at $40, TD Ameritrade would still be $10.

I just picked TD Ameritrade out of the hat - any firm that gives you fixed pricing would do the trick.
 
when you lose a penny each way because ameritrade directs the order to nite in order to get paid for the order flow
you will lose the entire savings on the commission + more.
 
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