New IB Commissions for High Volume Stock Traders
- Thread starter Steve_IB
- Start date
FWIW, I trade mostly listed stock and add more liquidity than I take, with almost the same commish schedule. Over any given month, I average $0.0040-$0.0045, depending on what exactly I'm doing that month. That's 10-20% less than IB's bundled rate of $0.005.
For $32.50 listed stocks: if you do nothing but take liquidity from ARCA for a $35 stock, you pay an average of $0.005 (0.0045 to buy, 0.0055 to sell) - same as the bundled rate.
If, however, you add liquidity half the time, it's 0.004 to buy, 0.005 to sell, for an average of 0.0045 - 10% better than bundled.
If you always add liquidity, it's 0.0035 to buy, 0.0045 to sell, for an average of 0.0040 - 20% better.
If you take from INET at $0.0007, or IB passes through the credits for the higher volume tiers to you, or you get to the next IB commission tier, the numbers get even better. If you incur specialist charges, they get much worse, and you should be shot for encouraging them
For $32.50 Naz stocks with the -$0.002/+0.003 model, taking all the time, it's 0.0065 + 0.0075 = 0.007 avg, 40% worse than the bundled rate of 0.005.
If you add half the time, it's 0.0015 + 0.0075 = 0.0045 avg , 10% better than bundled.
If you add all the time, it's 0.0015 + 0.0025 = 0.002 avg, 60% better than bundled.
For $32.50 listed stocks: if you do nothing but take liquidity from ARCA for a $35 stock, you pay an average of $0.005 (0.0045 to buy, 0.0055 to sell) - same as the bundled rate.
If, however, you add liquidity half the time, it's 0.004 to buy, 0.005 to sell, for an average of 0.0045 - 10% better than bundled.
If you always add liquidity, it's 0.0035 to buy, 0.0045 to sell, for an average of 0.0040 - 20% better.
If you take from INET at $0.0007, or IB passes through the credits for the higher volume tiers to you, or you get to the next IB commission tier, the numbers get even better. If you incur specialist charges, they get much worse, and you should be shot for encouraging them
For $32.50 Naz stocks with the -$0.002/+0.003 model, taking all the time, it's 0.0065 + 0.0075 = 0.007 avg, 40% worse than the bundled rate of 0.005.
If you add half the time, it's 0.0015 + 0.0075 = 0.0045 avg , 10% better than bundled.
If you add all the time, it's 0.0015 + 0.0025 = 0.002 avg, 60% better than bundled.
I think the only way to know for sure is to switch and see what your commissions come out to be. It's not like you're going to broke finding out. You can always switch back if you don't like what you see.
I was very surprised at my savings. I was averaging .004 on NYSE and .003 an Nasdaq before I even hit the first price break.
Of course, this is specific to my style of trading, but I would not have predicted my savings to be as great as it is.
But this all circles back to a recurring criticism: When is IB going to include a liquidity field in the execution window so I know for sure whether I'm adding or removing? It's not that I don't trust you guys..... my prop account has this field, why not IB?