IB losing the edge in commissions!

Quote from DHOHHI:



High minimum ticket charges? High commissions? Sorry, but you're wrong. Actually MB has 2 commission structures to choose from. You might want to do some research before you post inaccurate info. Commission structure is almost identical to IB for stocks except for 501-1000 shares where MB pays .0075 rather than .0050. And unlike IB there are no monthly charges. Bottom line is that it's cheaper for me to trade with MB than IB.

http://www.mbtrading.com/fees.asp
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And it says right there in your link - minimum $3 charge on equities. Now suppose I buy 300 shares and wish to sell them incrementally (take partial profits), 100 shares at a time, at different price levels. With MBT that will cost me $12. With IB it will cost me half that ($6).

As for eminis, $3.25 per contract is much higher than $2.4 per contract (current IB commissions).

It says so in the link that you yourself posted. Maybe you are the one who should do the research...

And by the way if an expensive broker like MBT is lowering commissions too, it only adds to my point that IB must wake up and burry this mounting competition! IB show them who's boss!
 
The minis are cheap at IB I will give them that. As for equities it is hard for me to understand how a trader makes a living trading 200 or even 1000 share avergage lots, but I guess they are out there.

If you average trade size is over 2000 you can go to places and get $6-$7 a trade plus or minus rebates. FIrms even offer free routes.

So if you knock down 2000 shares and get .002 for adding brings your trade cost is down to $4 or $5 a trade. Higher shares better yet.

I also do not get the attraction to trading the minis. When I can trade 5,000 share lots of the QQQ and get paid for doing it if I am adding liquidity.
 
Quote from Question:

The minis are cheap at IB I will give them that. As for equities it is hard for me to understand how a trader makes a living trading 200 or even 1000 share avergage lots, but I guess they are out there.

If you average trade size is over 2000 you can go to places and get $6-$7 a trade plus or minus rebates. FIrms even offer free routes.

So if you knock down 2000 shares and get .002 for adding brings your trade cost is down to $4 or $5 a trade. Higher shares better yet.

I also do not get the attraction to trading the minis. When I can trade 5,000 share lots of the QQQ and get paid for doing it if I am adding liquidity.
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If you trade high volume there are brokers by far cheaper than IB. The good thing about IB is that you don't need to trade high volume to get good commissions.

I personally find the eminis better than equities in any and every way, but that's not the subject of this thread

Cheers
50
 
Wow, take a night away from the net and it makes for interesting reading in the AM.

Note: you've got to discredit the few of you who work for other firms and claim they're IB clients. I think their posts are obvious as they are ill informed. Others of you make some interesting points.

1. API routing: If you use SMART there are no fees. Yes there are fees to direct route but why do you fail to mention the execution credits the lack of SEC fees etc.

2. Software: inferior - I highly doubt that. All I know is that I trade Asia every day and I know our speed is second to none. While 99% of our trading is automated, we do use a TWS when we see opportunities or need to fire off a quick hedge. My orders are filled before my hand is off the hot-key. Are there prettier front ends - sure, but if you are looking for speed and reliability, I believe we match up to all. We own the connections and lines for most exchanges we route to and the programs routing to the exchanges are basically the same as the one's used for Timber Hill.

3. Fees: we're in this for the long haul and for that we need to be profitable. Competition is good however but let's see how long all the firms can slug it out as there certainly isn't a lot of room for profit if you are non-clearing (IB self clears in the US) and you add in the clearing firms,, exchange and software fees for introducing brokers. I'm sure we'll react in some shape or form but IB isn't only about low commissions. We are also about offering a global product, probably the best margin financing rates on the streets and very generous interest when compared to other brokers. (should also add that ACH will be introduced within the next few weeks).

We also offer financial security (which includes sweeping excess funds from the commodities account into the securities account), a very reliable platform, an open API which has lead to numerous quality graphical and execution programs routing into us. While many complain about CS have any of you tried calling lately? I see the stats and calls are being picked up promptly these days. (naturally if there is a system wide failure any broker will have trouble with the lines). Things are much improved and will continue to improve on that end.

Thus even though firms are undercutting or matching our rates, side by side I believe we stack up well.

Options margin: if you think we should be providing better margin for strategies such as condors and iron butterflies, etc. feel free to send me a detailed write up which I'll be glad to forward to the relevant decision makers.
 
Quote from Lobster:

Let me just say that we might be forgetting something: IB does have an excellent globex data feed (including market depth). Why pay $50 a month for a data feed that is real time 99.9% of the time, but lags 5 seconds behind in those few seconds per week when you need it most (high volume). I don't know how they did it, but IB's globex feed has not had any noticable lag for at least several months now, no matter what the conditions. I don't know about you, but I think the ability to have non-lagging quotes in your execution platform (TWS) is worth something.
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Good point. The datafeed is consistently the fastest I've seen among data vendors - probably because full T&S is not provided but (something like .3 second) snapshots which don't lag the quotes like on the other data vendors. Some people complain about this but I like it just the way it is.
 
Quote from 50 cent:

And it says right there in your link - minimum $3 charge on equities. Now suppose I buy 300 shares and wish to sell them incrementally (take partial profits), 100 shares at a time, at different price levels. With MBT that will cost me $12. With IB it will cost me half that ($6).

It says so in the link that you yourself posted. Maybe you are the one who should do the research...

And by the way if an expensive broker like MBT is lowering commissions too, it only adds to my point that IB must wake up and burry this mounting competition! IB show them who's boss!
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Obviously you're not a math major. How can selling 300 shares in 100 share lots produce a $12 commission at MB with a $3 minimum? It can't. In your feeble scenario it would cost $9 ($3 min. x 3 trades). Sorry to correct you again. Anyway, any trader who needs to unload 300 shares in increments isn't much of a trader IMO. It would cost $3 to sell (or buy) 300 shares at MB in a single trade ... exactly the same as with IB. Bottom line is that you must be having trouble trading and being profitable if you're whining about commissions at IB. I'd guess you weren't trading full time 5 or 10 years ago. And you failed to factor in the monthly IB fees, which MB doesn't have. If you want to compare costs then compare ALL of them.
 
Quote from shneed:

def,

Now if you could only offer bullets and routing to regionals and NASDAQ for NYSE stocks.

shneed
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Yeah, def. Ib REALLY needs to have bullets. Its the only critical feature missing from the platform.
 
The only thing that ever has me shopping for other brokers are the passed along exchange fees to cancel option orders.

So far, I have found a broker that charges as low as 2.95/contract with no cancel fees. I would switch to them for all my trading but prefer the IB platform. Still the cancel fees have my commish often higher than the 2.95 so I remain tempted...

I wonder If I am not the only one who would easily tolerate an increase in the option rate to 1-2+/contract in exchange for losing the cancel pass through.

Fix this and I will no longer consider other brokers.
 
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