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IB options commissions
- Thread starter TITANIMUM
- Start date
Quote from hajimow:
I only trade options for stocks. I don't trade futures. To set your account for highest rebate, click on configure, secelct smart routing and then select "highest rebate" for options strategy. Here is my today's trades so far. You see that my first order was a market order so I did not save but look at the second order which is the same option. Then look at the third order which is a combo order. Then FB which is a stock and the price does not apply for that. Look at my last trade. I am sure people would love that option commission.
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Quote from hajimow:
I only trade options for stocks. I don't trade futures. To set your account for highest rebate, click on configure, secelct smart routing and then select "highest rebate" for options strategy. Here is my today's trades so far. You see that my first order was a market order so I did not save but look at the second order which is the same option. Then look at the third order which is a combo order. Then FB which is a stock and the price does not apply for that. Look at my last trade. I am sure people would love that option commission.
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Quote from Blazed:
hajimow,
The more attractive commissions might not make up the loss you get from a potentially inferior price on your directed exchange? did you research this beforehand?
With SMART, its suppose to choose the best price for you, though commissions are always expensive.
You are right. SMART routing is a little bit faster and I studied it a lot (through my hundreds trading). I came to the conclusion that for the kind of trades that I do, my highest rebate setting is the best. I set my price and if it hits it I will get it and if it does not, I will wait. I trsut IB so I know when I get something I should give something in return. Check out my today's trades attachment in my other post. It was to cover SPY June Call 138 at 0.6 which I sold two days ago at $1.14. After I bought it back at 0.6, it dropped to 0.58. So what?. Try this method, you will like it.
By the way, inferior price makes sense when you put market orders. For limit orders, inferior price does not have any meaning.
Quote from TITANIMUM:
hajimow, do these low commissions not apply to combo orders?
if not is there a way of getting lower commissions on combos what is it?
how do you buy without hitting the ask, hit bid and change it to buy and increase the bid so its the same or higher than ask?
cheers
I guess combo orders are handled by MMs so they are treated differently. I don't care to pay regular price for combo orders.
Let's say bid/ask are 0.1/0.12. If I want to buy I put an order to buy 0.11 or lower. If I want to sell I put an order to sell 0.11 or higher. Then I let the market moves toward me.
Some exchanges give rebate if you remove liquidity (just the opposite to NASDAQ which pays you when you add liquidity. I think PHILX or BOX are in that category. Not that knowing that will help.
hajimow, enlighten us:
1.) which exchange do we direct to, to get the set up for highest rebate?
2a.) if it only applies to single legs, you take on more risk with legging in to get lower commissions, no?
2b) do you transmit the next orders immediately, eg vertical spread, you ready the orders, then click transmit once the first order is executed.
you said "By the way, inferior price makes sense when you put market orders. For limit orders, inferior price does not have any meaning."
you would expect an inferior price with market orders, but surely the price would just mean buying at the Ask and selling at Bid at the time? eg if the price at the second was (1.4 1.55) and you chose a market order to buy at that second, you would expect 1.55 not 1.65 right?
1.) which exchange do we direct to, to get the set up for highest rebate?
2a.) if it only applies to single legs, you take on more risk with legging in to get lower commissions, no?
2b) do you transmit the next orders immediately, eg vertical spread, you ready the orders, then click transmit once the first order is executed.
you said "By the way, inferior price makes sense when you put market orders. For limit orders, inferior price does not have any meaning."
you would expect an inferior price with market orders, but surely the price would just mean buying at the Ask and selling at Bid at the time? eg if the price at the second was (1.4 1.55) and you chose a market order to buy at that second, you would expect 1.55 not 1.65 right?
hajimow,
so when would you choose to enter with combo orders as opposed to single legs / legging in?
is there any method for reducing commission for combos?
you said " Let's say bid/ask are 0.1/0.12. If I want to buy I put an order to buy 0.11 or lower. If I want to sell I put an order to sell 0.11 or higher. "
so do you click on the ask, get 0.12, then reduce it to 0.11 right? and if want to sell, click on bid, get 0.1, then increase it to 0.11 right? this would be decreasing liquidity right? PHILX or BOX being the ones to choose when removing liquidity and NASDAQ if you add liquidity (selling at bid or lower and buying at ask or higher?)
cheers
so when would you choose to enter with combo orders as opposed to single legs / legging in?
is there any method for reducing commission for combos?
you said " Let's say bid/ask are 0.1/0.12. If I want to buy I put an order to buy 0.11 or lower. If I want to sell I put an order to sell 0.11 or higher. "
so do you click on the ask, get 0.12, then reduce it to 0.11 right? and if want to sell, click on bid, get 0.1, then increase it to 0.11 right? this would be decreasing liquidity right? PHILX or BOX being the ones to choose when removing liquidity and NASDAQ if you add liquidity (selling at bid or lower and buying at ask or higher?)
cheers
Quote from Blazed:
hajimow, enlighten us:
1.) which exchange do we direct to, to get the set up for highest rebate?
2a.) if it only applies to single legs, you take on more risk with legging in to get lower commissions, no?
2b) do you transmit the next orders immediately, eg vertical spread, you ready the orders, then click transmit once the first order is executed.
you said "By the way, inferior price makes sense when you put market orders. For limit orders, inferior price does not have any meaning."
you would expect an inferior price with market orders, but surely the price would just mean buying at the Ask and selling at Bid at the time? eg if the price at the second was (1.4 1.55) and you chose a market order to buy at that second, you would expect 1.55 not 1.65 right?
You don't direct your order to any exchange. You just set your TWS to highest rebate and then trade as you are transmitting your order in SMART.
I am stingy and frugal in paying commission but don't risk in combo orders. I pay regular price in combo orders. (sometimes one leg of combo gets executed in NASDAQ and I get rebate but that is not guaranteed.
Yes if the bid/ask are 1.4/155 and you put market order, your worst case would be 1.55 if you are buying and 1.40 if you are selling unless market is changing in sub seconds. No one is sitting there to screw you for 10 cents. My experience shows that if the bid/ask are 1.40/155, in market order, I get something like 1.51. or 1.49.