Exactly, I remember the days when an order in both direction for 200 shares cost exactly $1 and I think that was just 5-6 years ago.
Opinions on Interactive Brokers?
- Thread starter stockmarketbeginner
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Exactly, I remember the days when an order in both direction for 200 shares cost exactly $1 and I think that was just 5-6 years ago.
If you trade larger blocks of low priced shares, you're better off at a fixed fee broker that charges $4.95 per trade. If you want to scale in and out of positions, IB charges 50 cent commission per 100 shares ($1 minimum charge per trade). So five trades of 200 shares is the same $5 commission as one trade of 1,000 shares and that allows scaling in and out of positions without a flat fee penalty for multiple trades. . Option commissions are 15 to 70 cts per contract with free option assignment and exercise (bonus points for that from me). Sometimes you get ECN rebates for providing liquidity. And yes, they charge data feed fees. For me, it's 3 feeds for AMEX, NYSE, NASDAQ and OPTIONS so it's a grand total of $4.50 USD per month.
Ignoring the $4.50 per month, for a recent period, my average commission per 100 shares for non assignment/exercise shares was 68 cents per 100 shares. This is skewed upward a bit because I also trade some illiquid stocks and often, I only get fills of only 100 shares and after changing the trade price, it results in multiple 100 share fills which does not occur with liquid stocks I trade. Since I often buy shares via assignment and unload ITM options via exercise to avoid the B/A haircut, the average commission per 100 shares for ALL equity shares traded during this period was just under 40 cents per 100 shares. During this period, my option commission averaged 71 cents per contract but that is skewed downward by the free assignment and exercise. These numbers have been fairly consistent for the nearly 20 years that I have been with IB.
The claim of $3 and change per trade by someone makes no sense to me - unless that person is barely trading and not meeting the low threshold of trading frequency and getting hit with the $10 per month fee for not generating $30 in commissions per month.
Now, the Trader Workstation. Ugh, yes, it is a disappointment. It's user not user friendly and the learning curve takes some time. Most periodic platform upgrades tend to destroy some of my configuration but I've fixed it so many times that I feel like a garage mechanic. Because of this, I used to avoid upgrading versions until they no longer supported it and I was forced to upgrade. Now, the periodic upgrades are automatic (sigh). I know what I know and trade what I trade so most of the improvements don't benefit me.
Years ago, customer service was pretty sketchy. Some reps had no clue and it meant calling back and trying again. These days, it's far, far better and while it may take some time, they resolve it and I have no complaints (like installation of platform or DDE software on new computer with set up transfer, etc.)
As an old dog and I don't want to learn new tricks. I'm there and not going anywhere. But if I was starting out and if something user friendly existed with a similar commission structure, I'd be there.
Ignoring the $4.50 per month, for a recent period, my average commission per 100 shares for non assignment/exercise shares was 68 cents per 100 shares. This is skewed upward a bit because I also trade some illiquid stocks and often, I only get fills of only 100 shares and after changing the trade price, it results in multiple 100 share fills which does not occur with liquid stocks I trade. Since I often buy shares via assignment and unload ITM options via exercise to avoid the B/A haircut, the average commission per 100 shares for ALL equity shares traded during this period was just under 40 cents per 100 shares. During this period, my option commission averaged 71 cents per contract but that is skewed downward by the free assignment and exercise. These numbers have been fairly consistent for the nearly 20 years that I have been with IB.
The claim of $3 and change per trade by someone makes no sense to me - unless that person is barely trading and not meeting the low threshold of trading frequency and getting hit with the $10 per month fee for not generating $30 in commissions per month.
Now, the Trader Workstation. Ugh, yes, it is a disappointment. It's user not user friendly and the learning curve takes some time. Most periodic platform upgrades tend to destroy some of my configuration but I've fixed it so many times that I feel like a garage mechanic. Because of this, I used to avoid upgrading versions until they no longer supported it and I was forced to upgrade. Now, the periodic upgrades are automatic (sigh). I know what I know and trade what I trade so most of the improvements don't benefit me.
Years ago, customer service was pretty sketchy. Some reps had no clue and it meant calling back and trying again. These days, it's far, far better and while it may take some time, they resolve it and I have no complaints (like installation of platform or DDE software on new computer with set up transfer, etc.)
As an old dog and I don't want to learn new tricks. I'm there and not going anywhere. But if I was starting out and if something user friendly existed with a similar commission structure, I'd be there.
Robert Morse
Sponsor
We "eat" the OCC fee of $0.05 for all but very high volume accounts. I wish we did not. Our commissions on our website include the OCC fee. I'd rather charge less and pass through all fees.
Updates are not automatic. You can always get the offline version which does not auto-update, problem solved.
IB commissions are insane for not having caps, you shouldn't pay $100 for a single trade, EVER, since it's all electronic anyway. Also you won't end up paying $5 for 1000 shares because that doesn't factor in transaction fees. It's the final cost that only matters for the trader.
Robert Morse
Sponsor
The first statement might be true, but you can get commissions below $1 if you select tiered pricing instead of fixed rate. My commissions on a 100 share SPY purchase earlier this week was 19 cents.
I'm not sure, but I think they still charge something for the trade. They just treat it as a standard stock transaction as if you bought or sold the stock on the open market during regular business hours so there's no additional fee because it was an assignment. Check on that though, not 100% sure.
Actually, you don't need to subscribe to any data. They will let you place the order without having a data subscription, they'll just warn you that it's a bad idea (which it is). But if you trade infrequently (about 30 trades per month will cover most of the data fees) and liquid products, usually a quote from another platform is good enough.
That's the main reason why I use IB. I usually close short ITM option positions especially for less liquid stocks by creating synthetics and then just allowing them to expire and exercise.
Try WebTrader. The only thing I'm missing with it is option delta calculations, but I wrote my own software to do that.
I get it. You don't like IB and you want to bash them but the claim that "they could easily end up being far higher than everyone that they're showing (your chart) as more expensive" is nonsense.
A fee per share like IB is better if you trade less 1,000 shares per trade. A flat fee like $4.95 at Schwab et al is better if you trade larger blocks. I've had some years where I traded 6 figures in shares (not dollars) and my commission averaged 55 cents per 100 shares, including all of the the exchange sell side fees - and I was trading at the 50 cents per 100 shares commission level, not at a lower tiered rate.
Yes, tiered pricing is lower but I think that's only available for higher volume traders - and I doubt that it applies to most here.
I misspoke. There's no 'commission' for assignment and exercise. There's no regulatory fee for buying so buy side assignment/exercise is 100% free. There is a sell side regulatory fee so if selling via A/E then you get charged only that fee. But it's much ado about nothing (it might be a total of 50 cents for 1,000 shares of a $20 stock).
I don't know what their current minimums are. Last I knew, it was a $10 fee if you don't generate $30 in commissions per month. Anyone asserting that $4.50 per month for 3 data fees is an exorbitant charge needs a reality check :->)
Not to nitpick but if you can save $10 a month in commissions by being at IB,the $10 fee is covered. If one trades so infrequently that you can't save $10 per month by being at IB, it doesn't matter what platform one uses.
This still applies.
I agree with most of what you say but this. No one here is talking about payment for order flow. You are paying 4.95 at schwab because some HFT is buying the order, leaning on it to trade and make their edge and then selling to you (filling you) when the market is ticking down. For one limit order here and there it may not make a difference but if you are active it makes a big big difference over time.
Besides, you should all be on tiered pricing if doing any size as you could get rebates (negative commissions) on exchanges that pay for providing liquidity or have your per share fees drop to lower than .0035 per share.