IB or fixed commission?

T

tonyzhou

I am currently use IB and charge $0.005/share. Since most of my trades are below $5, I found that my commission for one trade sometimes cost more than $50.

How about some fixed commission company like sogotrade with unlimites shares for $3? Anyone currently use IB consider this? Thank you
 
Quote from tonyzhou:

I am currently use IB and charge $0.005/share. Since most of my trades are below $5, I found that my commission for one trade sometimes cost more than $50.

How about some fixed commission company like sogotrade with unlimites shares for $3? Anyone currently use IB consider this? Thank you
More...

Slippage is far bigger than commission, e.g. IB NQ slippage is on average 0.5+ points round trade, which is $10+ dollars. If I shop for a broker again, I would give more weight on slippage than commission.
 
hi, adadadog

I only use limit order. In that sense, does slipperage still count?
Brokers cannot execute outside my order price?
 
How about unbundled? With adding liquidity offset the commission, maybe the total fee will reduce a lot. Currently I pay over $2000 commision per month on IB bundled, and want to reduce the commission. most of the time, entry orders are adding liquidity and sometimes, close position i will use limit price hit on the bid.
 
Quote from tonyzhou:

hi, adadadog

I only use limit order. In that sense, does slipperage still count?
Brokers cannot execute outside my order price?
More...

yes. u can receive a better fill than u expected. it is more likely to happen with IB.

"maybe the total fee will reduce a lot"

do the calculation and it won't be a maybe.
please post your calculations
 
Quote from tonyzhou:

How about unbundled? With adding liquidity offset the commission, maybe the total fee will reduce a lot. Currently I pay over $2000 commision per month on IB bundled, and want to reduce the commission. most of the time, entry orders are adding liquidity and sometimes, close position i will use limit price hit on the bid.
More...

So you do 400,000 shares/month...
You will definitely pay less unbundled, maybe $0.0045/share.

But meaningful price reductions start at 300K shares/month...
At 4000K with 50/50 add/take liquidity I pay about $0.003/share...
So as you scale from 400K to 4000K/month...
You would get a roughly linear reduction from $0.0045 to $0.0030.

But you MUST route SMART with unbundled...
So you have little control over destination and specific rebates...
But it's always in IB's interest to get an execution...
Or they don't get paid...
So your interests are largely aligned with IB's.
 
Thanks, DeeDeeTwo.

Just strange that I can see the option price is now unbundled, but I cannot see stock unbundled in the statement report.
Will unbundled detail list also in statement or is there some tricks I do not know that the commission on stock is still bundled?


Quote from DeeDeeTwo:

So you do 400,000 shares/month...
You will definitely pay less unbundled, maybe $0.0045/share.

But meaningful price reductions start at 300K shares/month...
At 4000K with 50/50 add/take liquidity I pay about $0.003/share...
So as you scale from 400K to 4000K/month...
You would get a roughly linear reduction from $0.0045 to $0.0030.

But you MUST route SMART with unbundled...
So you have little control over destination and specific rebates...
But it's always in IB's interest to get an execution...
Or they don't get paid...
So your interests are largely aligned with IB's.
More...
 
Quote from tonyzhou:

Will unbundled detail list also in statement or is there some tricks I do not know that the commission on stock is still bundled?
More...

Yes...
Every execution is broken down in complete detail...
In a section called "Unbundled Commission Details"...
Except the Executing Exchange is left out...
But you get that information in your TWS logs.

Remember, the average NYSE trade today is about 300-350 shares.

What IB tends to do with SMART...
Is they will take a 300 share order...
Send 100 to the NYSE, 100 to Island...
And then peel off 100 for themselves via SMART...
So you see that kind of thing a lot.

The only thing I trade where I 100% provide liquidity is ETFs...
And my net commission on ETFs is almost exactly ZERO...
So with unbundled I can make money scalping ETFs for $0.01...
But that's not really what I do...
I mostly hedge with ETFs...
And make money on stuff with bigger spreads...
But this is something to think about.
 
Quote from tonyzhou:

How about unbundled? With adding liquidity offset the commission, maybe the total fee will reduce a lot. Currently I pay over $2000 commision per month on IB bundled, and want to reduce the commission. most of the time, entry orders are adding liquidity and sometimes, close position i will use limit price hit on the bid.
More...

If you're adding liquidity often, you can often end up making money from the rebate. The $2000 you are paying a month now will be significantly reduced. It looks like you average about 400,000 shares a month, which means you qualify for .0035 for the first 300,000 shares and .002 a share for the remaining 100,000 shares
 
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