IBKR reserves the right to reject any IBKR Lite order

Maverick2608 · Jan 11, 2020

"IBKR Lite is meant for retail investors, including financial advisors trading on behalf of their retail clients. IBKR reserves the right to reject any IBKR Lite order or series of orders if IBKR determines the order(s) appear to show non-retail trading behavior. At the time an order is rejected, the client will be automatically presented the option to resubmit the rejected order on a Fixed commission basis."

"OnClose or OnOpen US listed stock orders are free for IBKR Lite clients so long as the order does not exceed 10% of an account's monthly US stock trading volume, otherwise your account will be charged USD 0.005 per share."

Interesting. Have other zero-commission brokers introduced similar restrictions?

https://www.interactivebrokers.com/en/index.php?f=45196

Exted · Jan 11, 2020

Do they sell their order flows to HFT firms like other zero-comms brokers? If so I guess that's the way they prevent itself being arbitraged...

helpme_please · Jan 11, 2020

Maverick2608 said:
"IBKR Lite is meant for retail investors, including financial advisors trading on behalf of their retail clients. IBKR reserves the right to reject any IBKR Lite order or series of orders if IBKR determines the order(s) appear to show non-retail trading behavior. At the time an order is rejected, the client will be automatically presented the option to resubmit the rejected order on a Fixed commission basis."

"OnClose or OnOpen US listed stock orders are free for IBKR Lite clients so long as the order does not exceed 10% of an account's monthly US stock trading volume, otherwise your account will be charged USD 0.005 per share."

Interesting. Have other zero-commission brokers introduced similar restrictions?

https://www.interactivebrokers.com/en/index.php?f=45196

What is meant by OnClose or OnOpen US listed stock orders?

R1234 · Jan 11, 2020

Nope Fidelity does not have any such restrictions for on Open and on Close.
And they don't differentiate between "retail" and "non-retail" customers. Everybody gets the same deal - Commission Free. Pretty sure Schwab, TDA, ETrade, Merrill and everybody else is that way too.

I'm sure IBKR realizes they are currently the outlier.

Cdntrader · Jan 11, 2020

Maverick2608 said:
"IBKR Lite is meant for retail investors, including financial advisors trading on behalf of their retail clients. IBKR reserves the right to reject any IBKR Lite order or series of orders if IBKR determines the order(s) appear to show non-retail trading behavior. At the time an order is rejected, the client will be automatically presented the option to resubmit the rejected order on a Fixed commission basis."

"OnClose or OnOpen US listed stock orders are free for IBKR Lite clients so long as the order does not exceed 10% of an account's monthly US stock trading volume, otherwise your account will be charged USD 0.005 per share."

Interesting. Have other zero-commission brokers introduced similar restrictions?

https://www.interactivebrokers.com/en/index.php?f=45196

how is "non-retail trading behavior" defined?

ET180 · Jan 11, 2020

Cdntrader said:
how is "non-retail trading behavior" defined?

Probably based on frequency and/or size of the orders. You can't use the API with IBKR Lite so that eliminates a lot of options. Also, similar to other brokers, IBKR Lite is only commission-free for stocks / ETFs. They still charge per contract for options, futures, and other products.

murray t turtle · Jan 11, 2020

ET180 said:
Probably based on frequency and/or size of the orders. You can't use the API with IBKR Lite so that eliminates a lot of options. Also, similar to other brokers, IBKR Lite is only commission-free for stocks / ETFs. They still charge per contract for options, futures, and other products.

%%
Sounds fair;
IBKR tends to be. Also included , not trading oVer 10% of a stock's monthly trading Volume..............................

d08 · Jan 11, 2020

Exted said:
Do they sell their order flows to HFT firms like other zero-comms brokers? If so I guess that's the way they prevent itself being arbitraged...

Yes, order flow is sold when it comes to "Lite" clients. I imagine the fills are far worse.

helpme_please said:
What is meant by OnClose or OnOpen US listed stock orders?

Auctions.

R1234 said:
Nope Fidelity does not have any such restrictions for on Open and on Close.
And they don't differentiate between "retail" and "non-retail" customers. Everybody gets the same deal - Commission Free. Pretty sure Schwab, TDA, ETrade, Merrill and everybody else is that way too.

I'm sure IBKR realizes they are currently the outlier.

Others are starting to have the upper hand over IB. They need to create an equivalent API to lure customers away.

ET180 · Jan 11, 2020

d08 said:
Others are starting to have the upper hand over IB. They need to create an equivalent API to lure customers away.

Agree. I think RobinHood is developing an API, but there's really not much competition in that space. I think IB should simply eliminate the Lite vs. Pro branding. Add a new "commission-free" option for placing orders. For limit orders, I'll get filled at the same price as the commission brokers.

d08 · Jan 11, 2020

ET180 said:
Agree. I think RobinHood is developing an API, but there's really not much competition in that space. I think IB should simply eliminate the Lite vs. Pro branding. Add a new "commission-free" option for placing orders. For limit orders, I'll get filled at the same price as the commission brokers.

That will be great for customers but not for IB. I would love to route some of the auction orders commission free though. Right now I pay way too much.