IB commissions for low priced stocks

[benitez17]

Bitstream, if you want lower commissions, just go somewhere else. I moved almost my entire IB account to AMTD, and purchased 6500 shares today for $9.99, with no fees, so I'm already about $27.50 ahead of where I would have been last week. You can keep complaining on here, or do something about it if you think moving is best for you overall. The only way that IB will change their pricing structure is if they think it will bring in or retain more business, so let them know why you left if you decide to do so.

 

[def]

Quote from Bitstream:

def, what it boils down to is that if u lower costs for these stocks u'd attract much more biz, cuz frankly there's no way am gonna trade em if they stay as they are and i think most everyone, except prolly gamblers or insiders wouldnt either. i mean, considerin' the min tick, who on his right mind would take the risk of buildin' a big position when they move the same as regular stocks .. i think u got everythin' to gain and nothin' to lose.

i see your point but you're paying .002 cents per share for that trade with no SEC fees. We need to cover our costs. Other firms charging fixed pricing either subsidize the larger trades via their margins on smaller trades or perhaps get paid for their flow. Via direct access you might be able to obtain a better fill which would make up for the additional cost (1 penny saved is $20 on 2000 share). If you don't think so then you may want to find an alternative broker for those types of trades.

 

[GTS]

Quote from alanm:
If you read the details in the "Read More..." page, you'll find that this is not what most would not consider to be direct-access. One might want to investigate exactly what the "MBTR" route is, and whether your order is being sold to a MM.

(Edit) Note that I'm not bashing or even faulting MB here (unlike the rhetoric that usually enters into these discussions). They clearly describe what they are doing, and anyone that takes this business seriously realizes that people have to make a profit to stay in business.

Are you saying that this (https://www.mbtrading.com/stocks.asp):

Unbiased Routing
MB Trading's order routing decisions are made on an order-by-order basis in an unbiased fashion. We receive no payment for order flow from any Market Makers and have no vested interest in any ECNs.

Is not true for MBTR, e.g. that they are selling order flow?

The read more says

MBTR does not primarily route orders to ECNs, meaning that there is less liquidity available than with the MBTX route. MBTR utilizes specific liquidity pools to avoid traditional routing costs.
MBTR does not actively seek price improvements, although such improvements are possible.

That says to me they arent being paid for order flow but they are routing orders to avoid paying for taking away liquidity whenever possible. Do you read that differently?

 

[Bitstream]

Quote from GTS:

Are you saying that this (https://www.mbtrading.com/stocks.asp):


Is not true for MBTR, e.g. that they are selling order flow?

The read more says
That says to me they arent being paid for order flow but they are routing orders to avoid paying for taking away liquidity whenever possible. Do you read that differently?

it's a different plan with different commissions structure, altough i admit they contradict themselves.

 

[Bitstream]

Quote from def:

i see your point but you're paying .002 cents per share for that trade with no SEC fees. We need to cover our costs. Other firms charging fixed pricing either subsidize the larger trades via their margins on smaller trades or perhaps get paid for their flow. Via direct access you might be able to obtain a better fill which would make up for the additional cost (1 penny saved is $20 on 2000 share). If you don't think so then you may want to find an alternative broker for those types of trades.

since u charge around $3 for 30Kshares of any stock that trades below $1 [if am not mistaken] i thought it would be sensible to make it the same for securities priced below $4; how come i have to pay almost nothin' for a stock that trades @0.98 and a fortune for one that trades @1: sorry but it doesnt make much sense...and sure the increase in volumes would more than make up for your costs.


by the way, on those stocks there aint no way u gonna get price improvement, traded a lot of those priced at $5-6 and never got a penny better. u might try to buy the bid/sell ask but i never got filled other than a couple of times when i was immediately on the wrong side. R0R

 

[zdreg]

Quote from Bitstream:

def, what it boils down to is that if u lower costs for these stocks u'd attract much more biz, cuz frankly there's no way am gonna trade em if they stay as they are and i think most everyone, except prolly gamblers or insiders wouldnt either. i mean, considerin' the min tick, who on his right mind would take the risk of buildin' a big position when they move the same as regular stocks .. i think u got everythin' to gain and nothin' to lose.

it is only a guess on your part that lowering commissions would increase profits for IB,

 

[Bitstream]

Quote from zdreg:

it is only a guess on your part that lowering commissions would increase profits for IB,

may i add an educated guess?

volumes would substantially increase imo...those securities would become very attractive to savvy traders that would begin' to take advantage of further diversification and take much bigger positions...if commissions cover ib's costs even if by a margin, that would be enough....if profits dont increase and stay the same i think it is worth doin' it for clients sake.

 

[zdreg]

how about if profits decline?

 

[Bitstream]

Quote from zdreg:

how about if profits decline?

it is a possibility but cant be drastic since there cant be much volumes already on those stocks.
u are right tho, am guessin'..i dont know about thier profits margins, i just thought stocks that trade below $1 have very low costs and cannot see what damage can do includin' also those that trade below $4.

 

[krishiyer]

Bitstream
I saw your other post about SGX being the slowest to think & get out etc.what contracts do you trade there?
sgxNikkei mimics the original Osaka movements.taiwan index at SGX -I heard is popular & have volumes-just curious.

Refer to this thread about stocks below $10-Guys I have not traded them for a long time.Indivual stocks only day trade biggies like QCOM,AAPL,XOM etc watching the indices(% up/down more than index-more bang for the buck)
If mind is blank trade IWM,SPY.
Most of the time trade options on SPY/IWM,mini futures+ currency futures (during US hours)for -10/+20 ticks.
IB is ok if you trade lot of options.