Interactivebroker spread for FOREX

[def]

Quote from herringtrader:

Thanks everyone for the help!

Below I compare the estimated cost of IB and Oanda.


Cost of a $200,000 (2 big lots) EUR/USD round trip during normal market conditions:

Oanda: 1.5 spread X 20 = $30


IB: the spread changes between 1-2 so I calculate with a 1.5 pip spread.

Brokerage fee: (200,000 X 0.00002) X 2 = $8

spread cost: 1.5 X 20 = $30

total cost $38


So as you can see Oanda is cheaper during normal market conditions.

Does anyone know if the spreads are better at IB during news releases?

One major difference with IB is that you can place an order between the spread or join the bid . You do not have to lift offer. In addition, the spread does vary and does get as tight as 1/2 pip. Thus your comparison is not exactly comparing apples to apples.

 

[ddunbar]

Quote from herringtrader:


Does anyone know if the spreads are better at IB during news releases?

I use them both and no, they are about the same. Though IB's spread tightens earlier on average post news release. Anywhere from 2 to 3 secs earlier. Pre news, IB's spread remains tightened up a little longer than Oanda's on average by a few seconds also. Probably due to Oanda's "hedging" alogorithms vs IB's BBO.

What I like most about IB is the various order types you can use when trading FX spot. It gives you more flexibility and consequently opens up a few more strategies. Oanda only has 4.

BTW, your trade cost analysis wasn't bad. You should have accounted for IB's .5 which occurs by either playing in the spread or when the spread narrows to this which happens often enough. So you should have made IB's trade cost a range from $18 - $38 during "normal" market conditions.

 

[NickBarings]

What about the reliability of stop orders
with IB ?

 

[Bitstream]

Quote from NickBarings:

What about the reliability of stop orders
with IB ?

i understand your concerns

 

[katesdp]

You dont pay the spread "twice"

Quote from herringtrader:

Hello,

At a regular FOREX broker like Oanda or FXCM the only cost you have to pay is the spread. You have to pay the spread only once in a round turn.

How does this work with Interactivebrokers? Do you have to pay the spread twice in a round turn just like when trading index futures?


Thanks,

Herringtrader

 

[myminitrading]

Quote from def:

One major difference with IB is that you can place an order between the spread or join the bid . You do not have to lift offer. In addition, the spread does vary and does get as tight as 1/2 pip. Thus your comparison is not exactly comparing apples to apples.

He used 1.5 pips, I think that was on the generous side. IB spread average on EURUSD is more like 2 pips.

 

[sniper_com]

Oanda or FXCM ..... I warking with icforex very lo spreds and no comicion)))

 

[toby400]

Quote from sniper_com:

Oanda or FXCM ..... I warking with icforex very lo spreds and no comicion)))

You spamming on this thread now:eek:

 

[ballyhoo]

Quote from NickBarings:

What about the reliability of stop orders
with IB ?

forget it, in volatile times 5 to15 pips slippage. The tip from IB: take limit orders, super, then you will not get filled!

 

[ballyhoo]

Quote from def:

That isn't true. For a 100K trade, the commission would be = 0.2 pips of a spread. Which would make a 1 pip spread = 1.2 pips. I suspect that is a better deal than your "no commission" deal above.

So you are from Interactive Brokers, please be correct when you post. The commission for a roundtrade is two times 0,2 pip, plus an average of minimum 1,5 pip spread on EUR/USD is 1,9, plus you have to convert your profit loss by hand to your base currency and have to pay again a commission, incredible, just imagine you trade a few pairs!!!
So Oanda for example is much cheaper, more convenient (your profit loss is on your account in base currency) and you don´t have slippage, whereas with IB you aren´t able to trade in volatile times.