IB losing the edge in commissions!

Quote from 50 cent:

With Avanced Futures now offering $4.8 round turn on eminis and TradeStation slashing commissions, IB is slowly losing its competitive edge...

IB wake up and show them some real competition!
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I think it is no secret that TradeStation is the direct competitor to IB. Their backtesting and automation platform are unrivaled,IMO.

Did I mention RadarScreen?

Now that their commisions are negligible as compared to IB, I too would agree that IB had better do something, and quick.

Regards
Oddi
 
Quote from ElectricSavant:



I would venture to say that the front end users of the various add-ons would be a high percentage of high-volume type traders...so to charge them more for using scalping software seems redundant from a marketing stand point.

Michael B.
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I think you misunderstand who charges for what. IB themselves have nothing to do with third party order entry/trade management programs. IB do not get involved in charging fees to users of such products!

The developers of the front-end programs are the people who charge a fee, usually flat-rate monthly ...totally unrelated to IB commissions. If you are paying flat-rate $20 a month for a kick ass front-end add-on, then you will certainly see the benefit as a scalper because usually the features within these products more than offset the small monthly charge.

When you've got people willing to pay $500+ a month for platforms like X-Trader or whatever ...there are lots of smaller volume traders prepared to pay $20.00 - $30.00 a month to get advanced features in a NinjaTrader or Buttontrader platform (IB add-ons) ...because they contain many features not available within TWS. Commissions are unrelated!

Offering a free API to developers (thus enabling the creation of such products) is a key competitive advantage for IB not mentioned much in this thread. But once developers start writing similar inexpensive front-end products for use with J-Trader (patsystems API) ...well, if commission rates are the same ...IB could lose business for that reason.

I keep my futures business at IB because I can't live without the NinjaTrader add-on. So it doesn't matter if a J-Trader broker is now at the same commission rate as IB. But if a Ninja-type product were available for J-Trader ....that'd be a different ballgame.
 
Quote from John Lydon:


Offering a free API to developers (thus enabling the creation of such products) is a key competitive advantage for IB not mentioned much in this thread. But once developers start writing similar inexpensive front-end products for use with J-Trader (patsystems API) ...well, if commission rates are the same ...IB could lose business for that reason.
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Johnny,

I am glad to learn that you keep an eye open for the API aspect. As you point out, IB has a major advantage here. Also the fact that as a developer you do not have to deal with third party software people is of crucial importance. This may not make much of a difference for huge organizations with major programming operations.

For individuals or cost conscious outfits, it is of a distinctive advantage to find all you need by the way of API on a website like IB's for free. On top you find a heap of user's commentary on different forums, IB's included.

To tell you the truth, I am looking for almost a year now to rewrite my application for one of the other *-Trader packages. Obviously there is some incentive from the commission side. I have not been able to accomplish anything yet because of the impracticality of getting in any straightforward way at the information a programmer needs about testing and validating.

Brokers offering *-Trader packages seem to know nothing about API support and send you to the *-Trader people. These seem to be at a complete loss as to what the needs are of a typical IB API user. If you don't want start paying a few tons up front, no way.

At least IB do their thing a very different way. You sometimes read about people complaining about not being able to talk to IB on the phone. This may be a legitimate gripe. Did these people ever try to get some information over the phone on API's from the supposed more responsive brokers?

So let's see what the future will bring. On API's I mostly see only pie in the sky stuff.

I am always happy to read you Johnny,

nononsense
 
Hi nonnonsense

Yeah, the API issue sure is overlooked. I reckon that 'third party add-on' software programs are going to explode in popularity over the next twelve months. IB is well positioned by putting out a free API that attracts a lot of developer interest and community support.

Once the typical smaller trader starts getting accustomed to the many features of these products, the whole concept of comparing the features of say TWS vs J-Trader will start to become irrelevant, because less and less people will care about the built-in features of any platform. If the commission difference is also small, people will care much more about which platform enables them to use their favourite third party interface. If you know your interface (due to having advanced features) is saving or making you $100's more a month than using the plain built-in features of a platform ...then this will increasingly become the decisive factor in determining which broker to use.

I notice that patsystems offer an API but it seems that it's not free (about $2K to get started from what I recall from their web site) and that you have to pay to test your application and get some kind of approval. Bad business decision on their part, but if a third party developer did break through these barriers and got a customised interface, the fun would really begin. Or if Pats wisened up and made their API freely available, then in one stroke IB would lose it's current competitive advantage in this key area.

I suspect that most J-Trader brokers won't know anything about the subject of the pats API. An interested developer would probably need to first talk with patsystems directly and once approval is given to develop an interface, then go ahead and forge a relationship with an agreeable broker to permit the application to access their particular J-Trader. At least that's my understanding of the process from reading patsystems web site.

IB is leading the way by having an open and freely available API, and therefore the greatest number of third party interfaces. But how much longer will they enjoy this advantage I wonder?
 
What's so great about these third party interfaces? I looked at a couple and couldn't see how they would help me at all. Could someone give me an example of how they help you make money?
 
Quote from AAAintheBeltway:

What's so great about these third party interfaces? I looked at a couple and couldn't see how they would help me at all. Could someone give me an example of how they help you make money?
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From what I've seen; they just make order entry and trade management a little bit easier.

-Fast
 
ElocalTrading is now offering a frontend called Protechtion,
which is a replacement for JTrader. It appears to still
use patssystems as the backend. It however includes
a free API which is just as easy to program as TWS.
 
Quote from juggernaut:

ElocalTrading is now offering a frontend called Protechtion,
which is a replacement for JTrader. It appears to still
use patssystems as the backend. It however includes
a free API which is just as easy to program as TWS.
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And their commissions are $1.82/side + fees for low volume and $1.13/side + fees for high volume. Thats $5.96 or $4.58 per e-mini round trip all in.

For high volume they need to get into the 40 to 70 cents per side + fees range to be competitive. $1.13 isn't.
 
Quote from ssternlight:

I think we will see commissions become more competitive Q1 of next year. Moving about until then seems pointless (imo).
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That makes sense, this is just the prelude.
 
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